Market Analysis for Ice Cream Company in India

Executive summary

This report is on the Tiptop company which is going to the Indian market and targeting customers like young people, kids and family. In that before going to an international country they checked internal and external factors by using strategic management tools. They have done analysis of the specific group with price, distribution system, partnership with a local company, their competitors. Tip top has their own core competencies like unique and long product line, technological power and cost-efficiency. By using their available resources, capabilities and competencies they make a plan to leverage core competencies to gain competitive advantages.

Table of Contents

1 Introduction

SWOT analysis

1.1 Strength

1.2 Weaknesses

1.3 Opportunity

1.4 Threats

2 PESTEL analysis

2.1 Political

2.2 Economical

2.3 Social

2.4 Technological

2.5 Environmental

2.6 Climate and Weather

2.7 Legal

3 Task 2

Price strategy

Distribution:

Affinity

Competitors position analysis:

Unique idea:

4 Task 3

Unique and long product line

Cost efficient

Technological power

5 TASK 4

Resources:

Capabilities:

5.1 Competencies:

5.2 Valuable capabilities

5.3 Rare capabilities

5.4 Costly to imitate

5.5 Non-substitutable

6 Plan to leverage core competencies

7 Task 5

7.1      Stability strategy:

7.2      Product strategy

7.3  Promotional strategy

8     Conclusion

9     References

Introduction

In year1936, Len and Albert opened their own ice cream shop at Manners Street, Wellington. At the time they did not know their ice cream project would be a national icon and it’s loved by the New Zealand’s people. Soon later they start to make their own ice cream without waiting for any overseas big ideas. They are the founder of the ice cream from the beginning.

They launched their first ice cream in 1950’s. This ice cream came with a stick. In year 1962, Kiwi people of the North made biggest and most progressive center for ice cream excellence and this ice cream plant is known as Tip top company. Tip Top invention is the key to success, and Tip Top has made a sequence of iconic products which standview for their test and that match with Jelly Tip, Choc Bar, Trumpet and Memphis Meltdown and this the first three layers of ice cream.

But nowadays Tiptop is one of the best ice cream in NZ. They prepared ice cream with kiwi creativeness and real ingredients to make most loveable ice cream for all Kiwis and their every future generation. They are making a different flavor like a trumpet, fruit, jelly tip, Choc bar, Memphis meltdown and Popsicle and hokey pokey (Tiptop, n.d.).­­

Internal factor and external factor of the Tiptop company using with the strategic management tools

SWOT analysis

By using SWOT analysis it’s very easy to identify the Tiptop company internal factors like strengths and weaknesses.

1.1 Strength

Unique and range of product

This company has a range of product with a different flavor. They use fresh dairy cream to make this ice cream which has less fat so that’s why it will be the best choice of those who are looks for fat intake, moreover they are used only natural color to make a product (Tiptop, n.d.).

Good promotion strategy

In that Tip top would like to bring their product where people are, so for that they have developed a suite of selling equipment to anyone, anywhere and anytime to enjoy and sell their ice cream. Even this company provide a many equipments free of charge to community groups, schools, and customers with that they promote ad advertising their product (Tiptop, n.d.). Even they also promote their product on the Facebook page.

1.2 Weaknesses

Brand image

The brand image of this company is not that much effective compared to other ice cream company, even another ice cream company is serving a different flavor of ice cream in the market with providing good service and less price compare to this company so sometimes people not buying the product. Tip top has poor brand image and doesn’t making any good efforts to make brand trustworthiness (Ice Creams, n.d.).

Weak management

This company needs a more experienced management to growth downturned economy, because in top-ranked ice cream list in New Zealand tip-top position is the nearly bottom (canstar, n.d.). Sometime weak management broken the Tiptop image and status because of that some tiptop competitors are ready to grab Tiptop position from market. It shows lack of trained employee.

1.3 Opportunity

Good growth rate market

In India because of the population there is a huge market for Tiptop as well price for the ice cream is keep low compared to the local market so it’s good to attract customer very easily. Even in India cold chain infrastructure has made it very easy to transport unpreserved item across the country so it’s good to owe much to the evolving customer (Shashidhar, 2017).

Tie-up with food chains, restaurants

Sometimes it’s good to tie up Tip top business with some company or food chains, it will help to increase the sell. Offer a retail franchise opportunity in their store or restaurant with profit potential. In India most people are vegetarian so its opportunity to aware of popular trends and increase their customer. Explain to them to Tiptop product doesn’t contain animal products of any kind (Killahbcom, n.d.)

1.4 Threats

High competition

In India competition is very intense due to small differentiation. There are many ice cream company already have like Amul, Mother dairy, Vadilal, Havemore and other local competitors which will give direct competition to Tiptop ice cream. Also because of the traditional culture there are many threats of substitute like traditional sweet, homemade Halwa and kheer. In addition other ice cream company provide same product so its chance to switch to the customer (Jogwar, 2017).

Seasonality weather effect

In India there are mostly 3 seasons like winter, summer and monsoon. People mostly eat ice cream in summer so it’s less chance to earn money in winter and monsoon. And it’s very hard to maintenance ice cream for long times because of milk product in hot weather. So tip-top company need to create seasonally themed flavor ice cream such as candy, Choco bar. In India there is uncertainty in weather so on that times it’s hard to service ice cream Company (Thomas, 2017).

2 PESTEL analysis

2.1 Political

Changing VAT

In India food industry and ice cream industry depend on the VAT which one is set by the government.  Because of that rate is changed every time so it directly effects on the customer price of Tiptop ice cream product. They set the middle rate and reduced rate, in middle rate VAT is increase 7% to 10%. But on another side reduced rate is decreased up to 5.5% to 5% to sometimes times Tip top will not earn that much of profit because of changing VAT system (B., 2013).

Political stability

Before launching Tip top product in India it’s necessary to be considered political stability in the chance to become a success. Political factor kept the government judgment and permitted issues. It compulsory to any overseas company giving common payback like service tax, income tax and sales tax (Contributor, PESTEL Analysis, 2014).

2.2 Economical

Economic policy

To keep the country economy stable it’s may chance to introduce new policy, Since the outline the new industrial policy in 1991, as per policy, decreasing the industrial licensing, liberalization and exchange rate of foreign capital some time its direct effect on the industry like Tiptop. In this situation may need to work based on short term or long term contract (Contributor, PESTEL Analysis, 2014).

Inflation rate in ice cream market

In India, there are many ice cream company like Amul, Havmore, Vadilal, mother dairy and other local competitors which directly gives competition to Tiptop ice cream. Because of many competitors they strongly effect to the final customer price and level of sales. In this time customer is more and more carefulness with their money and be likely to buy less ice cream (Sankoju, 2015).

2.3 Social

Health awareness

To increase the health awareness among all ice cream customer is a negative effect on overall demand for ice cream product. Many customers eats ice cream without think about obesity and other health related problem. So this great chance for Tip top to target low calories ice cream in the market and could be replace a fatty product (Inc., 2017).

Population growth

In India population growth is very high. So Tip top could easily find their market in that and they may mostly target kids, young people and family. Even summer is very hot in India so there is a maximum chance of sales of the product (BMJ, 2000).

2.4 Technological

Development and innovation

Nowadays technology is to advance to make a new kitchenware appliances from that people is enabled to make their own delicious ice cream at home. Now a day many Indian families has their own ice cream maker it’s may impact on the many cream company sell including Tip top ice cream even high-income people have their own freezer to store ice cream for a long time (B., 2013).

Advance technology

Business with advanced technology has impact on business success. Technology change impact socio-culture attitudes. Advance technology help to operate machine easy, easy to change product types sometimes it’s become reliable operation with low cost. In Tip-top company its help to check quality control, in that quality inspector keep eye on cone making and baking machine, check the quality of ice cream cone and reject if any misshapen or broken (Tetra pak, n.d.).

2.5 Environmental

Environment-related laws

In India population is a major problem related to ice cream industry except for removal waste which is a help to managed properly.  So Tip top company should need to get the no objection certificate from environmental NGO. In addition they must follow the environmental Act 1986, Plastic waste management Rules, Manufacture, Storage and Import of Hazardous Chemicals Rules 1989 and more ( Els Reynaers Kini;Tavinder Sidhu;Surender Pal Bhatia,, 2017).

2.6 Climate and Weather

Indian climate and weather is changing every four months and there is a seasonal climate like in winter weather is code in summer weather is hot and in monsoon weather is rainy so its direct impact to trade people cannot buy much ice cream in rainy and winter season so for tip top they would not find more sell compare to summer (Contributor, Pestel analysis, 2015).

2.7 Legal

Legal procedure

In India different city has different legal formalities. So Tip top should need to visit city health department and should need to get all information about how to run business under legal obligation so Tip top should need to visit health department to run business successful (Kundu, 2016)

Influential legislations and regulatory

If Tip top starts their business in India then Tip top should need to follow many legislative and regulatory factors in a company environment that can change the ice cream company operation. So it needs to design a strategy according to country and health and safety laws as well as keep eye on changing tax and policies (Inc., 2017).

3 Task 2

In India ice cream business is rapidly growing business and it is one of the fastest increasing areas of the food processing industry. Now a day ice cream marketplace in India is estimated to be over is INR 4000 to 5000 crores, and its growing rate is about 10-15% year on year. It is assumed that in the year 2019 this market will be around INR 6,198. India has low per capita ice cream feeding compare to the USA and China. With purifying cold chain arrangement in the country joined with collective disposable income and the changing routine life, and India has great prospective for growing (Business Wire, 2017).

So because of this reason for Tiptop company India is a huge market for ice cream and them mainly focusing on a specific customer like kids, family and young people to aims its products and services. In India population rate is high so it’s very easy to get a market for ice cream business even size of the market is worthwhile for Tiptop and big enough and sufficient. So there are maximum further growth possibilities and that target market for tip top is in India, not a short-term dimension because there is huge demand for ice cream market. Tip top would easily estimate their sales including product level, geographical area, time and level of competition. Many ice cream competitors like Amul, Havemore, Vadilal and  mother dairy is well famous in the Indian market and Tiptop is new entries in this market so its direct effect on company ability to be successful (WARC, 2016).

Price strategy: This strategy depends on kind of product. In India there are many company like Amul, Vadilal and Havemor this company product price is roughly INR 110 ~ 300 so Tip top necessity to consider their competitor’s price as a benchmark and keep their product price (Big basket, n.d.). This gives how your customer sees your product. Pricing strategy connects customer like tip top product is comfort food or just for sophisticated eaters. Some people purchase ice cream based on brand name, some based on price. The most customer is former outfit and them likely to be concerned with saving money.

But some people perception is different and they like to buy a high price product because they are correlated with quality. Pricing should not be kept only on the market demand but also on market condition. Ice cream is going to charge a premium price for its special services. This strategy gives an idea where Tip top needs to set low and high prices because the ice cream contains freshest, best quality ingredients and is made with fresh dairy cream. In New Zealand price is varies from $2.50 to $ 10 or more but in India import duty is about 30% (Cybex, n.d.). If the profit margin is 5% then estimated price for Tiptop product is INR 180 per person. Based on that situation Tip top need to keep price considering target market like kids, young people and family.

Distribution:Distribution is played an important role in especially in the distribution of customer goods. For the Tiptop ice cream retailer are important, In addition in India most of the people are used to buy a product from retails shops.  If the target market size is large, then Tip top should have many distribution channels, but in small market direct selling is very profitable. So the size and average demand for product influence the decision about distribution. So for Tiptop product selling Tip top should need retailer and wholesaler (Prakash, 2006).

Tip top distribution channel followed by the wholesaler and retailer. So from the retailer the product is sold to the target market through Tip top chosen outlet, Tiptop scooping parlors, vending push carts some of the city not all city, hotels, Canteens and restaurant restaurants (Distribution, 2015).

Here Tip top channel of distribution is playing typical marketing function. From the viewpoint of Marketing management, distribution process is continuous to locate the customer, meet their demand and offer them service and satisfaction. These are the core task of manufactures in that wholesaler and retailer work for combine channel of distribution (Prakash, 2006).

Affinity:In New Zealand Tip top ice cream company has a good partnership with Griffin’s who make biscuits. Tip top and Griffin’s both meet together and make one new product like, Bikkie – ice cream which one is Kiwi favorites. So this partnership will make a positive impact on sales. Obviously both ice cream and biscuits will test product (Team S. , 2016).

Same as in New Zealand, Tiptop should do a partnership with any India company so as a newcomer company this will definitely help to increase customer so as in New Zealand, In India Parle-G is most favorite and leading selling biscuits so for Tiptop is good to do marketing as well as its chance to cover a good market with doing a partnership with Parle-G Biscuits Company. So mostly who is the customer of Parle-g will be a customer of Tip top. So as new comer for Tiptop start-up cost is also become low and limited outer regulation (Partnership, 2017).

So Parle-g and Tiptop could share their responsibilities to run business successful. This will permit them to make the most of their capabilities rather than dividing the management and taking an equivalent share of the business task. They may divide their work according to product plan and run the business very smoothly. Even tip top is “enviro-mark” diamond certified. Enviro-mark is an environmental certificate programme who help to Tiptop and Parle-g Company to ensure that they are operating to the high environmental and health & safety standard (Tiptop, n.d.). In addition Parle-g is work under the “The Food Safety and Standards Act, 2006” so its good sign for both companies (Indiankanoon, 2012).

Competitors position analysis:In India, There are many ice cream company in that Amul, Havemore and Vadilal are most famous. They are selling their product at reasonable price. Amul is main competitors of Tiptop ice cream. Amul ice cream is a good and consistent performer since the time they are not selling a product but they are selling a brand. Even Amul made a long time age their place in customer mind. They maintain they iconic brand for a long time. Even Amul dairy is located in Anand, Gujarat, India which is their most milk supplier (Amul, n.d.). In addition Amul is known for their wide range of product but their market is increasing day by day because of that product portfolio kept on increasing. Havemore and Vadilal are foreign company for India so they are not that much influencing compare to Amul. Amul also provides wide range of dairy product like curd, ice cream, cheese that is their main advantage compare to Tiptop.

Amul achieves approximately 38 % to 40% market share because it’s a real milk real ice cream.

Amul changes their position according to their customer choice and psyche about the health. Today health is biggest issues and they are working in that scenario. They are thinking about how health comes first however the test is also of an important factor. For Amul, Sometimes it’s very hard to balance being “healthy and value for money” at the same time as export point view (Amul, n.d.).

Unique idea:There are many choices nowadays in ice cream product to suite a varied of customer tastes. Tip top can differentiate their product by giving a variety of information on ice cream packing label. So India tip-top product may be differentiated by introducing like, they are using some exciting changes to their iconic tip-top ice cream and ice blocks by replacing all color and flavors with natural substitutes. In addition they are using a pure and local ingredient from Indian farm (Tiptop, n.d.). Tip top is certified by Enviro-Mark programme which is help Tiptop and other company to ensure that they are operating to the high environmental and health & safety standards as like New Zealand tip top should have to be a part of some central pollution control beard to support for environmental risk in India. Mostly consumer are check many terms on a product like, reduced fat, Light, Low fat, non-fat. All tip top product is non-fatty product but some product has low fat with containing maximum of 3grams of total fat per serve (IDFA, n.d.). Tip top company provide a fundraising, Tiptop would like to bring their product to where their customer is so for that they developed a mobile selling equipment in India. So for that they offer their equipment on some event like sports event, some community group, schools and customers.

4 Task 3

Tip top strength is become core competencies and strong capabilities. And tip-top competencies like, Unique and long product line because Tiptop has many flavor of ice cream, candy, Top notch, Memphis meltdown, fruit, trumpet, popsicle, tip top tubes, scoop (Tiptop, n.d.). Its main advantage of tip-top because their competitors don’t have many product ranges. Even every customer has different perception like some buys their product based on quality, brand and price and that’s good for tip-top Indian market because of a large variety of product. So its Tip top bring a different product to market and the best way to reach maximum customer with their attractive unique and long product line so customer gets wide range of product from a single location (Hanks, n.d.).

Cost efficient is second core competencies of Tiptop in the International market. Tip top uses the cost advantage strategy by offering a very large product selection and low price. They keep their product price lesser in many different ways because they have good management and they have good skill, and expertise labor to minimize production cost because of that they keep low markup and increase sell. Even low price is much efficient and more profitable for tip top. Some people buy ice cream because of its low price or many of buys ice cream because of brand and quality. Base on that Tip top keeps eyes on the variable costs and fixed costs in that they include mix ingredients, flavors, labors, storage, freight and shipping cost etc. and before they set price for the product they do a price skimming (Pricing Methods, n.d.).

Technological powertip-top has ERP system with supply chain management (SCM) application which one is helping  to optimise output by reducing exchange times and improving distribution performance. Also they are deploying SCM advanced scheduler, which one is suggesting finite capacity scheduling for batch process production facilities (Infor, Infor delivers a Tip Top supply chain solution, 2008).

It gives an idea to Tiptop to confirm capacity by relating know demand again production. It shows where company resources need to increase or decrease.

5 TASK 4

Internal analysis is the best way to identify the tip-top quality like, Tiptop company use their own core competencies by using their available resources (in that they include tangible and non-tangible resources), Capabilities and competencies. In addition, by innovating company leveraging their resources, capabilities and using their core competencies tip-top create their value (Dallas Hanson; micheal hill; robert e. hoskisson).

Resources:This is the source of the tip top capabilities and wide in scope. They also include social, organizational and individual things. They represent the tip top input into a production process and these are the current assets for the tip top financial resource, tangible and intangible resources, human resources. They are using two types of resources, one is tangible sources, they are the resources which one we can touch them, in that they have own good building structure, own machinery so they don’t need to pay interest or lease money for their property its main benefit (Tiptop, n.d.). Even they good human power into production department. There is around 400 employee work to make approximately 50 million liters of ice cream each year and they have sufficient to fill over 6000 classrooms which becomes its strength (Tiptop story, n.d.). But on another side intangible sources which cannot be touched like, good software application to manage to schedule, tip top corporate culture, brand and product management.  In that tip top has good ERP system with supply chain management (SCM). SCM is helped to bring greater control to production and scheduling. In addition to using this type of technology it’s very easy for them to manage to the product line (Infor, Istart technology, 2008). Tip top has good and skill, knowledge and well experience people to make new good quality flavour of ice cream with reputed brand.

Capabilities: Tip top capabilities emerge over time through with simple interaction among companies resource (Tangible and non-tangible). It mostly comes from Tiptop employee’s skill, good experiences, and much functional expertise. Tip top company capabilities mostly focus on the business abilities to meet consumer need and demand. In addition it is unique to protect imitation by competitors and which tip-top adds unique value to its services and goods over a long time period. Tip top company workforce permit to skill people to direct those skill to gain their business goal. Training into production and another company department, effective and right people for right place recruitment and hiring are company capabilities that confirm a knowledge workforce. Tip top ensures their employee has the resource availability to improve and increase their capability (Kelchner, n.d.). If tip-top has good relation with their customer than that organizational capabilities affects sales, status and loyalty for future company’s business. Maintaining this existing and new relationship with new and existing customer ensures the company will rise and increase their sell in future. These capabilities affect many functional areas like distribution, marketing, research and development, manufacturing etc. Tip top distribution is a very good they provide their product where people are sometimes they provide their suite of mobile equipment. They sell the product to their wholesaler and retailer store (How-to-make-ice-cream, n.d.).

5.1 Competencies

Tip top may use their two main tools to identify and build their core competencies that create and retain their competitive advantages. Core competencies differentiate Tip top competitively and make it unique. There are main four criteria for sustainable advantages. Like Valuable capabilities, rare capabilities, Costly to duplicate and non-substitutable.

5.2 Valuable capabilities

A tip-top resource and capabilities add value by knowing the tip top to exploit and duplication in strength and weakness. In addition tip-top add their value as capabilities and resources to gain and lead competitive advantages. Tip top has a good variety of product and long product line with the good promotional strategy that is company competitive advantages but it is not possible enough sustainable competitive advantage. It may be possible their competitors innovate new product and this may decrease their value added (Learning, 2012). For example In October 2001 to 2002 Apple’s launched the new iPod and it has the capacity to store 5000 songs. But now in the market there are many MP3 players available and its duplicator were now and it’s not as valuable (Wilton, 2014).

5.3 Rare capabilities

Tip top has a variety range of product that’s their strength even they are using natural colors instead of artificial color and all product is non-fatty on another side their competitors are using artificial colors product (Amul, n.d.). So those people who are the health conscience they will definitely go through tip-top ice cream. Even tip-top has much wide ranges of product with a different flavor. Tip top has their own ice cream sandwich product (Tiptop, n.d.). For example Apple Company has their own IOS (Co.Design, 15).

5.4 Costly to imitate

Tip top’s all product are natural color product even all product are a non-fatty product so it’s very hard to imitate tip-top product for competitors. For natural color they need to develop a new plan and many research for that so it’s a kind of costly process. Competitors need to check about side effect of product.  In addition all tip top product are informative instead of deceptive and have same nutritional value. These all product should be renamed so every customer understands the change between duplication and dairy product (Nmpf, n.d.).

5.5 Non-substitutable

In India there is no product like ice cream sandwich, which tip-top have so for tip top is very easy to cove target market with good price and a wide range of product with good quality. Their competitor (Amul) have the different product but they don’t have such type of product (Amul, n.d.).

6 Plan to leverage core competencies

Tip top company is one of the leading ice cream company in New Zealand even they are launching their product in India. It has a wide range of product, they manage their product based on service and product metrics that will help to build a loyal customer for a long time. In addition they have much products like ice cream sandwich which is hard for their competitors to imitate. They maintain company strength for a long time even if company management redesigns their business in international market. Moreover, they have the good technological power they are using ERP system with supply chain management to manage rough capacity planning. This will also help to manage to schedule and which type of product they need to run with how much quantity with how many people need to finish their job. Base on that all circumstances they decide their product is cost efficient or not ( Kunio Hasebe ;Scott S. Elliott, 2017).

7 Task 5

There is three level of Tiptop business corporate level, business level and functional level. At first level, corporate level strategy live in high-level decision making and include action dealing with Tiptop objectives, achievement and allocation of resources and direction of strategies of various strategic business units for best performance. At second level, the business level strategy is suitable for that business which has different business and each business is behaving  as strategic business unit. At third level, functional level tip top is deal with a relatively limited plan providing objectives for a specific function, this level allocates resources among different company operations (Bhasin, 2017).

7.1 Stability strategy

It is a strategy in which tip-top keep their existing strategy at their company corporate level and keep continue focus on its current product and competitive market. It is adopted when Tip top attempts to maintain its current position in India and focus only on the incremental development by only it’s just two or three business operation in the perception of their target market. Generally tip top divided this strategy in many small part like no change strategy, Profit strategy and caution strategy. In no change strategy, Tiptop makes no considerable changes to its operation. They examine the company SWOT in India. Tip top makes a conscious decision to maintain its existing strategy. In profit strategy, this strategy recommends any action required to maintain profitability. This may include increase price, selling important assets, an increase in sales. This strategy can keep an eye on when the problems are temporary or short-lived and goes away with time. The problem may be like economic recession, worst market and inflation. In Caution strategy, Tiptop required this strategy to wait and remain stay to measure the market before taking any particular strategy (Jmg, n.d.).

7.2 Product strategy

This strategy belongs to the business level, in that tip top make an ice cream according to customer behavior means customer buy ice cream impulsively when they feel like having an ice cream and they pay money for it.  The main marketing plan of tip top is focused on their unique and different product from competitors and they are not doing with their product mix. So tip-top ice cream is easily available to their target ice cream market in India. Tip top product could be well positioned in the Indian market and high-quality market. It would contain only fresh and best quality ingredients with natural color instead of artificial color. It would come with a variety of product. Each of the ice cream will be made non-fatty and sugar-free considering the health-related people. This all product is made from the fresh milk and cream with considering hygienic techniques important to making such ice cream (Mars, 2009).

7.3 Promotional strategy

This strategy is created after the corporate strategy defined. This strategy belongs to a functional level. The promotional strategy includes tip top products advertising, sales promotional, personal selling. In addition, tip top allocated a huge budget for their advertising because tip top is an initial level of the Indian market. So in order to generate a good image on  target market they need to do a good marketing and promoting  a product on radio, newspapers, TV and if possible then they should have to show some sample on free of cost to attract the customer. Tip top competitors already cover huge market so it has to spend more money on advertising. They should have to mention all ingredient information on product packaging and labelling  (Mohitagarwal1989, 2014).

Conclusion

From this report it definite that Strategic management tools like SWOT and PESTEL are much efficient to know internal and external factor of Tiptop company. In addition, core competencies of the company are helping to gain a competitive advantage to stay in international market even if they have strong competitors.

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