Potential of Ice Cream Industry in Rural Market of India:

Indias ice cream market is pegged at Rs 4,300 crore per annum of which the organized sector accounts
for Rs 1,700 crore. It has emerged as the fastest growing dairy favourite in the Asia Pacific region.
However, Indias per capita consumption of ice cream is just 750 ml compared to an estimated 30 litres
in the US and 1.2 litres in China. So, in India there is enough scope for more growth than the 15 per cent
observed over the past few years.
Rural India presents a grand opportunity of being a huge market for the ice cream industry. But six to
eight hour-long power cuts during the summer months makes it difficult for ice cream manufacturers to
sell their products in the rural market. A power cut across northern India this summer left litres of ice
cream in melting heat for two days. And even when the electricity network is working properly, it
doesnt reach much of Indias population. The cold chain logistics infrastructure is still in the developing
stage, and power cuts lead to operational challenges. One of the main reasons is infrastructure: ice
cream and power cuts just dont mix. But industry experts are of the opinion that this condition is
changing rapidly. With a target group as vast as 70 per cent of 1.1 billion, the opportunity lies in
engineering of ethnic flavors, which are specifically favored by the rural segment. Also, extending
assistance to ice cream retailers or franchisees in these areas can create a symbiotic situation. Another
option to succeed in these areas is devising ideal package sizes.
A huge portion of the ice cream sales comes from Tier 1 cities. This clearly shows it is difficult to reach
small towns and villages due to lack of infrastructure. The non-organized sector though accounts for 60
per cent of the Indian ice cream market; it is shrinking considerably in the urban areas. However, in rural
areas, kulfis/ice creams made by small/cottage industry are popular. In small towns and villages, there
are thousands of small players who produce ice creams/kulfis and cater to the local demand.

FEATURES OF INDIAN RURAL MARKETS

Large and Scattered market:

The rural market of India is large and scattered in the sense that it consists of over 63 crore
consumers from 5,70,000 villages spread throughout the country.

Major income from agriculture:

Nearly 60 % of the rural income is from agriculture. Hence rural prosperity is tied with
agricultural prosperity.

Traditional Outlook:
The rural consumer values old customs and tradition. They do not prefer changes.
Diverse socio-economic backwardness:
Rural consumers have diverse socio-economic backwardness. This is different in different parts
of the country.
Infrastructure Facilities:

The Infrastructure Facilities like roads, warehouses, communication system, and financial
facilities are inadequate in rural areas. Hence physical distribution becomes costly due to
inadequate Infrastructure facilities. The rural bazaar is booming beyond everyone's expectation.
An estimated induction of Rs 140 billion in the rural sector through the government's rural
development schemes in the Seventh Plan and about Rs 300 billion in the Eighth Plan is also
believed to have significantly contributed to the rapid growth in demand.

REASONS FOR BOOST IN PURCHASING POWER OF RURAL PEOPLE:

Rural India, which was unnoticed for the past several years, is now at the center of attention of
companies. For four consecutive years, there was positive growth in rural GDP, which amplified the
spending power of rural flocks. The rural economy also got a boost with government initiative like the
farm loan waivers, wage payouts under the National Employment Guarantees Act and the ambitious
bharat Nirman Programes for improving rural infrastructure. More than 40 percent increase in support
prices of crops over the last few years has also enhanced the prosperity of rural India. The following
factors gave a boost purchasing power of rural folks:

Growing Investments
Implementation of National Rural Employee Guarantee Act
Increasing in Agro & Commodity price Trends
Increase in Literacy and Education
Insulation from the Economic Slowdown

The Ice cream industry in India can be represented as follows

The Industry

Mass Market

Organised

Unorganised

(200+players; 70%)

(200+players; 30%)

Super Premium

HLL
AMUL
VADILAL
DAIRY
DEN

Tiny Market

Baskin
Robbins
Nirulas
Dairy Den

Challenges in Rural Market FOR Baskin Robbins:

Today, rural India is seen as the most lucrative
segment because companies across different sectors are wooing them to support their momentum of
business growth. Rural markets offer opportunities, which are enormous and relatively untapped. They
present tremendous prospects for companies to sell their products and services. Corporation across
varied industry verticals are bucking up to address the rural potential demand. The attitudes, aspirations
and demands of rural consumers are very different from other their urban counterparts. Companies are
connecting to this base afresh and are together to cater to this market effectively and efficiently.
Companys resort to a number of strategies like repositioning of brands, repackaging products and repricing them, all with an eye on rural wallets. The overall marketing mix framework for rural markets
necessarily focuses around delivery the
sight product, using value for money pricing, using effectivemeans of promotion, selecting the most
appropriate method of distribution and building long term relationship with the customer in order to
sell their products. However, the rural consumer is not unlike his urban counterpart in many ways. The
more daring MNCs are meeting the consequent challenges of
AVAILABILITY, AFFORDABILITY, ACCEPTABILITY, and AWARENESS. (called 4 As)
For expansion in Rural Market following are the major challenges for BR are:

The current pricing strategy of the BR is for mainly the premium segment. So either they should
introduce some new flavor for the rural market or reduce the pricing of their product for rural
market. This would help them to gain share in this competitive market.
Most of the people are aware of the brand Baskin Robbins but few of them prefer this brand.
So, the main objective is to create preference towards this brand.
Few people are familiar with this brand through Internet, while most of them are familiar by the
means of friends & relatives. So advertising campaign is very much required at local level in
Ranchi.
People prefer Ice-cream of Amul and Kwality walls more as compared to Baskin Robbins. So,
there is a need to create liking of this brand among people.

The cooling systems consume high amount of electricity and results in 25% of the maintenance
charges. Though there are many measures taken right from the construction of the cold storage
to insulate the walls of the building properly and ensure high quality for thermal insulation using
materials such as thermo-cool sheets, etc.; due to non-uniform demand, the cooling systems
have to run when the chambers are under capacity. As there is a high variation in the demand,
during the off-season, the cold storage chambers are not completely occupied, i.e., the whole
storage space is not utilized but the cooling systems are operational to maintain the
temperature for the minimum stock that is there.
The cold supply chain system is highly labor intensive and labor dependent and almost 20% of
the annual expenses are labor expenses. Besides, the whole process of taking in and out of the
chilly bags is done manually. Since the labor is employed on the contract basis, if there is no
labor any given time, the whole process is halted and is waiting for the availability of the labor.
These kinds of situations lose the good will of the cold storage and the farmers tend to go only
to those cold storages where there is availability of labor as they do not want to take chance on
deteriorating the quality of chilies. And the labor generally finds employment with those cold
storages where the wages are high.
Prebuilt product needed to be stored at the right temperature so that quality is maintained,
which is not possible in most of the rural areas
Power fluctuations and lack of infrastructure are problems
Lack of temperature controlled warehouses on Pan India basis
Variability of demand for ice-creams according to the seasons

Solutions for Rural Market:

STP:
SEGMENTATION OF BASKIN ROBBINS IN RURAL AREAS
Demographic

All age group of people

Higher middle and high income group- Baskin Robbins ice-cream is expensive; its price ranges
from Rs.39 toRs.79.

Geographic

Malls , high foot traffic area , residential area , college campus

TARGET GROUP OF BASKIN ROBBINS IN RANCHI

Target group- Targeted group of Baskin Robbins are youth, teenagers, children and old age people.
Baskin Robbins has many flavors of ice-cream which attract people all age groups.
POSITIONING OF BASKIN ROBBINS
Brand loyalty also plays a role in marketing positioning, since Baskin Robbins is a brand so its marketing
position is stronger compare to others.

Taste different flavors everyday-Baskin 31 Robbins

The youth and teenager now seek variety in their fast paced lives. They want to try something new every
day. Different flavors for old age people like sugar free ice cream, eggless ice cream, and ice cream
without soy are available along with various candy flavors for children. Positioning Baskin Robbins in the
minds of consumers as 31 flavors for 31 days would be easy and effective for the brand.

USP for Rural Areas:

You can also get special promotional offers throughout the year i.e.31 % discount on every 31st
of the month at the purchase ice cream of Rs310
Worlds largest ice-cream franchisee at comparable prices with the competitors
Quality control and Customer service
Product variety is more in Baskin Robbins compared to its competitors

Recommendations for cold storage Problem

Mini cold storages can be introduced. Mini cold storages are similar to cold storages that are
smaller in size in terms of the volume and hence can require smaller cooling systems to cool
them. A normal cold storage can store around 1, 00,000 bags with two equal chambers. A mini
cold storage that can store around 10,000 to 20,000 bags can be constructed in every cold
storage so that whenever there is less demand, the bags can be stored in the mini cold storage.
Hence, we can save on the electricity.
An elevator & conveyor belt can be used to reduce dependency. The cold storages depend
heavily on the availability if labour for the movement of the goods that is expensive too. Hence,
a conveyor belt that takes the bags into the cold storage and an elevator that carries the bags
between each of the storeys in the cold storage. This is a one-time investment but the pay-back
period can be very less (within 2- years) as almost Rs. 20 lakhs is expensed for labour wages. The
use of automated movement of the goods first ensures that the goods can be taken in and
delivered back irrespective of the availability if the labour, which increases the goodwill of the
cold storage.