Hico Ice Cream Full Master File Swot, Pestel, Etc 66519

Marketing Project

Usman Ullah Butt ©

MBPM-F16-009

Ramsha Omer

MBPM-S17-005

Sair Ahmad

MBPM-F16-016

Riffat Parveen

MBPM-S17-001

M. Usman Sardar

MBPM-F16-007 the

Under the Supervision Prof. Ma’am Tabinda Usman

1. Executive summary Hico Ice Cream, a failed product of the Pakistan Fruit Juice Company, has been used for business analysis and marketing strategy development for this marketing research report. Hico was established in 1958, under the ownership of Pakistan Fruit Juice Company, in Lahore. The company pioneered the concept of pure dairy ice creams, and established a benchmark for other ice cream brands, that ventured into the production of frozen desserts rather than ice creams. The concept of this business report was to identify issues within Hico Ice cream that contributed towards its failure and provide efficient and effective solutions to these issues. The report analyzed the strengths, weaknesses, opportunities, and threats for the company; and identified that its pure dairy ice cream status provides the company with a leverage over its competitors. We also identified that Hico is the only producer of diet ice creams in of branded ice cream producers. The problem, as identified through research, was that the company has a poor marketing strategy, with little to no placement and promotional strategy. The solution to these marketing issues, as recommended by us, was the launch of an Ice Cream parlor dedicated towards children, inclusive of a performance studio. The marketing mix for this project launch focused on a 3 month, short-term, campaign. The activities to be carried out during this period was: extensive advertising for awareness; engaging in direct with customers through BTL; product development by developing new flavors and new sized ice creams (previously lacking in the product portfolio); and establishing customer loyalty by using the company’s long-haul operations in the Pakistani market. The marketing mix focused on product, price, place, and promotional strategy for Hico for 3-time periods: short term, medium term, and long term. Short term plans were quick and applicable and focused more on promotions and advertising along with extension of flavor and sizing, while giving little attention to market development or diversification. Market development is planned to be carried out in the medium term by penetrating ice cream markets in other cities of the country. The long-haul plan for Hico was centered on improving placement by opening similar ice cream parlors in other cities. The main emphasis of the long haul plan, however, was on diversification. We plan to encourage the company into the production of other dairy products, like: milk, butter, and yoghurt, in order to tap markets for other dairy products, meanwhile ensuring that the raw materials required will be more or less the same, enabling Hico to improve its operations and product portfolio.

Contents 1.

Executive summary ............................................................................................................................... 3

2.

Introduction .......................................................................................................................................... 6

3.

SITUATIONAL ANALYSIS ........................................................................................................................ 8

4.

PESTEL ANALYSIS ................................................................................................................................... 9 4.1

Political Factors ............................................................................................................................. 9

4.2

Economical Factors ....................................................................................................................... 9

4.3

Social and Cultural Factors ............................................................................................................ 9

4.4

Technological Factors.................................................................................................................... 9

4.5

Environmental Factors .................................................................................................................. 9

4.6

Legal and Regulatory Factors ........................................................................................................ 9

4.7

Porter’s Five Forces Model ......................................................................................................... 10

4.8

Threat of New ............................................................................................................................. 10

4.9

Entry ............................................................................................................................................ 10

4.10

Threat of Substitutes................................................................................................................... 10

4.11

Bargaining Power of Suppliers .................................................................................................... 10

4.12

Bargaining Power of Consumer .................................................................................................. 10

4.13

Rivalry.......................................................................................................................................... 10

4.14

Customer Profiling ...................................................................................................................... 11

4.15

Demographical segmentation ..................................................................................................... 11

4.16

Geographical Segmentation........................................................................................................ 11

4.17

Phycological Segmentation ......................................................................................................... 11

4.18

Behavioral Segmentation ............................................................................................................ 11

4.19

Competitor Analysis .................................................................................................................... 12

4.20

Strength....................................................................................................................................... 12

4.21

Weakness .................................................................................................................................... 12

4.22

Opportunity................................................................................................................................. 13

4.23

Threats ........................................................................................................................................ 13

4.24

Point of Similarities and Difference ............................................................................................ 14

4.25

Strength....................................................................................................................................... 14

4.26

Weakness .................................................................................................................................... 14

4.27

Opportunity................................................................................................................................. 14

4.28

Threats ........................................................................................................................................ 14

4.29 5.

Unique Selling Points .................................................................................................................. 15

Marketing Strategy ............................................................................................................................. 16 5.1

ANSOFF MATRIX.......................................................................................................................... 16

6.

Boston Consulting Group (BCG) .......................................................................................................... 17

7.

Marketing mix ..................................................................................................................................... 18

8.

Budgeting Plan .................................................................................................................................... 19

9.

Expense Sheet ..................................................................................................................................... 21

10.

Marketing Department Hierarchy................................................................................................... 22

11.

Implementation Plan ...................................................................................................................... 23

2.

Introduction

Hico was the first ice cream company in Pakistan, was established in 1958, under the ownership of Pakistan fruit juice Company private limited. Hico Ice Cream has had the honor of introducing the concept of pure dairy ice cream to the market, when frozen desserts have been marketed at a wider base. They company’s production capacity is approximately near 4.5 million liters of dairy ice cream per annum (Haroon, & Saad, 2006). The company, in comparison to other market operators, is a medium sized organization with very limited resources, which have proven to hinder Hico expansion and performance over the years. The company believes in internal growth which is why it has refused to grow to magnanimous proportions (Haroon, & Saad, 2006). With different forms of market innovations, the company was the pioneer of many new market strategies in the country. Hico was the first brand to introduce the push cart ice cream format in Pakistan, with the launch of this sales technique in Lahore in 1990 (Haroon, & Saad, 2006). In order to better cater to the market and their customers, the company went on to launch home delivery for their products but the plan succumbed due to feasibility and costs of the strategy. The company digressed from parlor and designated outlet sales to selling through bakeries and grocery marts, although now the company makes most of its sales through direct retailing from its factories. In 1997, they established proper marketing and sales department to improve its business (Haroon, & Saad, 2006). They also expanded their business with the entry in to markets of Karachi, Peshawar and Rawalpindi.

Expansion for Hico took place following 1997, when the echelon management finally decided to penetrate other domestic markets, including: Karachi, Rawalpindi, Faisalabad and Peshawar. Even though the company lacks product innovation and its product portfolio is very restricted, the company has managed to cater to a diversified target segment by launching diet ice cream, in order to cater to health conscious and diabetic patients that are otherwise left out by other ice cream producers. This helps to highlight how Hico is suitable for all demographic divisions in the Pakistani market.

3. SITUATIONAL ANALYSIS This part of the business report deals with analyzing the internal standing of Hico Ice Cream and where the company lags. A series of analytical tools, like: SWOT Analysis PESTEL Analysis POS+POD determination Porters 5 Forces Model USP Determination Have been utilized in order to see how the company is performing in its internal and external environment.

4. PESTEL ANALYSIS 4.1 Political Factors

 Volatile and unstable political situation in Pakistan.  The vulnerable situation is not ideal for business operations.  Political rallies, strikes, marches, terrorism, etc, can hinder business operations for Hico.

 Political

instability and incompetence are resulting in slow growth ("Political instability in Pakistan", 2016).

4.2 Economical Factors

 High

inflation levels: rose by 50% since May 2016 (3.17 inflation rate), and has reached a rate of 4.78 by June 2017 ("Pakistan Inflation Rate", 2017).

 Increasing

inflation means weaker purchasing power of

consumers.

 Also

means higher production costs for Hico since inputs become expensive.

4.3 Social and Cultural Factors

4.4 Technological Factors

 Pakistan has a wide age bracket of growing populace.  Higher number of children and young adults.  Glaring opportunity for boosting sales for Hico.  Weather is also favorable.  Remains hot and humid for most of the year round.  R&D seems next to absent.  Poor levels of automation.  Outdated machinery and plant.  No replacement of upgradation of the technology

in the

production plants of the company.

4.5 Environmental Factors

4.6 Legal and Regulatory Factors

 Air and environment pollution gaining serious attention in the Pakistani society.

 Ice cream production units release CFCs in great quantities. 



The ice cream industry in Pakistan has numerous set protocols to follow which include certain composition regulations like: every ice cream unit must have more than or 10% of milk fat and not less than 10.1% of milk solids (THE PUNJAB PURE FOOD RULES, 2011, 2011). The company or the parent company, both, are not ISO certified.

4.7 Porter’s Five Forces Model

Threats

Low

Medium

High

4.8 Threat of New 

4.9 Entry 4.10 Threat of Substitutes



4.11 Bargaining Power of Suppliers



4.12 Bargaining Power of Consumer



4.13 Rivalry



4.14 Customer Profiling

4.15

Demographical segmentation

Gender

Female, Male.

Age

5-9 years, 10-19 years, 20-29 years, 30-39 years, 40 above.

Class

Lower middle class, and upper middle class.

4.16

Geographical Segmentation

Country

Pakistan.

Region

Punjab

Intensive

Urban Area

Climate

Hot and dry climate.

Areas

Lahore, Rawalpindi, Karachi, Faisalabad, Peshawar

4.17

Phycological Segmentation

Attitude

Positive, neutral.

Life Style

Achievers, and strugglers.

Perception

Everyone love to have ice cream

Motivation

Higher Involvement

4.18

Behavioral Segmentation

Usage Rate

Frequent, limited.

Loyalty Status

Loyal, split.

4.19 Competitor Analysis

SWOT 4.20 Strength

HICO ICE CREAM

YUMMY ICE CREAM





  

 

4.21 Weakness

    

  

One of the oldest national companies Hico Ice cream was established in 1958, in Lahore. Produces dairy ice cream. First company to lunch flavor like: praline, Oreo cookies etc. Offer low sugar level, diet ice creams Vanilla light. Customer loyalty due to long haul presence in the market. Poor marketing, distribution, limited resources. Poor positioning strategy: Majorly operates in Lahore. Limited availability Stock issues in peak sales periods (summers): short supply Limited flavor portfolio, with very basic and generic flavors, in comparison to rivals. Substandard product packaging and presentation. Lack of innovation. less market share as compare to competitors.

   



      

No preserving chemicals that affect the health. It’s a frozen dessert. It is a time saving product. Skills and trustworthy workers are working in the company. Consumer loyalty.

Poor marketing, distribution and less recourses as compared to competitors. It has no strong brand image, Lack of distribution channels. less market share as compare to competitors. They have less technical resources. Substandard product packaging and presentation. Limited availability. Lack of innovation.

4.22 Opportunity

    



  

4.23 Threats

     

Possible market opportunities in other cities. Improving marketing, distribution, and availability. Low pricing strategy allows them to target low budget areas. Improving marketing, distribution, and availability. Pakistan is predominantly warm weather country, improving production and stock can bolster sales. Changing market dynamics: ice cream has a market in the winters too, which Hico can exploit to its benefit. Introduce new ice cream flavors and outlet, like: Walls on Main Boulevard. Lunch Stronger marketing campaign. Could expand diet ice cream range. Wider flavor and range by competitors. New market entries. Example: Gelatos, Move n Pick, etc. Large market share of competitors. Economic and political instability within the country. Big companies and MNEs with high end R&D rivaling with Hico. Poor internal performance.

     







  

The company can use new technology. They can change its target segment. Prepare the new ice cream flavors and outlet. They can change product image by changing its styles. Improving marketing, distribution, and availability. Lunch stronger marketing campaign.

Other competitors also offering products at similar quality and price. Big companies and MNEs with high end R&D rivaling with yummy. Most people are not really brand conscious, so loyalty might be an issue Competitors have more resources than yummy ice cream. Large market share of competitors. Economic and political instability within the country.

4.24 Point of Similarities and Difference

SWOT 4.25 Strength

Point of Similarities 

Point of Difference

Customer loyalty due to long  haul presence in the market.   



4.26 Weakness

    

4.27 Opportunity

  

Poor marketing, distribution, limited resources. Limited availability. Lack of innovation. Substandard product packaging and presentation, Less market share as compare to competitors. Introduce new ice cream flavors and outlet, like: Walls on Main Boulevard. Lunch Stronger marketing campaign. Improving marketing, distribution, and availability.

  

  



4.28 Threats

  

Large market share of  competitors. Economic and political  instability within the country. Big companies and MNEs with  high end R&D rivaling with Hico.

One of the oldest national companies Hico Ice cream was established in 1958, in Lahore. Produces dairy ice cream. First company to lunch flavor like: praline, Oreo cookies etc. Offer low sugar level, diet ice creams Vanilla light. Poor positioning strategy: Majorly operates in Lahore. Stock issues in peak sales periods (summers): short supply Limited flavor portfolio, with very basic and generic flavors, in comparison to rivals. Possible market opportunities in other cities. Low pricing strategy allows them to target low budget areas. Pakistan is predominantly warm weather country, improving production and stock can bolster sales. Changing market dynamics: ice cream has a market in the winters too, which Hico can exploit to its benefit. Wider flavor and range by competitors. New market entries. Example: Gelatos, Move n Pick, etc. Poor internal performance.

4.29 Unique Selling Points         

One of the oldest national companies Hico Ice cream was established in 1958, in Lahore. Produces dairy ice cream. First company to lunch flavor like: praline, Oreo cookies etc. Offer low sugar level, diet ice creams Vanilla light. Possible market opportunities in other cities. Low pricing strategy allows them to target low budget areas. Pakistan is predominantly warm weather country, improving production and stock can bolster sales. Changing market dynamics: ice cream has a market in the winters too, which Hico can exploit to its benefit.

5. Marketing Strategy 5.1 ANSOFF MATRIX PRODUCT NEW PRODUCT

EXISTING PRODUCT MARKET PENETRATION   

  

Launch of new flavors. Red velvet and After Eight. Launch of customized ice cream offered at the studio.

PRESENT

Launch of other sized ice creams. Launch of ice cream cones. Launch of ice cream cups.

PRODUCT DEVELOPMENT

M A R K E T

MARKET DEVELOPMENT 

NEW

 

Market penetration into other cities of Lahore. Market penetration through selling products through retailers and hypermarkets. Market penetration through opening studios in other cities (long term plan).

DIVERSIFICATION  

Tapping other dairy products markets. Producing yoghurt, butter, and milk.

6. Boston Consulting Group (BCG)

HIGH

HIGH

LOW

Industrial Share

Market Share

HICO PARLINE BOX

LOW

HICO COCONUT BOX

$ LIGHT VANILA BOX COOKIES & CREAM BOX

CHOCO BAR, MANGO CREAM BAR STAWBERRY CREAM BAR

7. Marketing mix Product

Long Term Strategy (5 Years) Diversify Product  Milk  Yoghurt  Butter (Dairy Product)

Short Term Strategy (2 Years) Adding More Flavors  Chocolate Chip Bar and Cone  Strawberry Bar and Cone  Extension of Diet Ice Cream 1 KG BOX

    

Launch Campaign (3 Month) Mini Cones Cones, Bars and Cups Hico Kulfa Bar Hico Mango Bar Hico Multi Bar Hico Vanilla Cone Hico Charry Nice Cone Hico Cup Scoop Hico Red Velvet Cone Hico After Eight cup Mini Cone Rs.35 Bar Rs. 30 Full Size Cone Rs. 50 Cups Rs.60



Lahore

 

ATL Through Television Add Flex BTL Bunting

        

Price (Calculate Through Inflation Rate last 5 Years)



Place



Promotion

Milk Rs. 35 250 gm Rs. 70 (500gm) Rs. 115 (1Kg) Yoghurt Rs. (100 Kg) Butter Rs. 50 (45gm)

     

  

All Over Pakistan Major Cities Karachi Peshawar Quetta



Digital Marketing

 

       

Mini Cone Rs. 37 Bar Rs. 32 Cone Rs. 53 Cups Rs. 64 Diet ice cream Rs.300 per Kg Major Cities in Punjab Islamabad Faisalabad Gujranwala Multan Mobile Application Online Order Home Delivery Loyal Customer Discount

  

8. Budgeting Plan

9. Expense Sheet

10. Marketing Department Hierarchy

CMO

USMAN ULLAH BUTT

SALE MANAGER (RIFFAT PARVEEN)

MARKETING STRATEGIES MANGER

MARKET RESEARCH MANGER

PROMOTION DIRECTOR

(RAMSHA OMER)

(M.USMAN SARDAR)

(SAIR AHMAD)

11. Implementation Plan

Task

Responsibility

Timeline

Status

Monitoring

CMO

Three Month

Done

Sales Checker Sales Manager

Three Month

Done

Planning

Strategic Manager

Three Month

Done

R&D

Market Research Three Manager Month

Done

Advertising

Promotion Director

Done

Three Month