Baskin Robbins

ByShrikant Ajmera Chandan Kumar Gauri Ghatge

History
Baskin-Robbins a global chain of ice cream parlours founded by Burt Baskin and Irv Robbins in 1953, from the merging of their respective ice cream parlours, in Glendale, California. It claims to be the world's largest ice cream franchise, with more than 5,800 locations, 2,800 of which are located in the United States. Baskin-Robbins sells ice cream in over 30 countries
Sources: www.baskinrobbins.com www.baskinrobbins.co.uk/about_us/history.html

In India
A joint venture between MDPMC Pvt. Ltd. - US subsidiary of Allied Domecq PLC Started In December 1993(Mumbai) Initial target Upper income group in posh localities of big metros With 1500-2000 square feet outlets like US

Market expansion
Tier A, B & C cities with 127 franchisees in 60 cities Tried to keep the taste intact Procured raw materials from US E.g. Jamoca coffee Ice-cream pricing at higher end

Issues in case

Challenges in global ice cream sales Importance of alternative distribution channels Effect of sales promotion strategies

Questions for Discussion

1. Despite having operated in India for a decade, Baskin-Robbins was able to make a profit only in the 11th year. What were the mistakes the company made in its understanding of the ice-cream market and the psyche of the Indian consumer? 2. Baskin-Robbins achieved a turnaround in its business by following an aggressive distribution strategy to achieve higher sales. Briefly highlight the various measures taken by the company. What could Baskin-Robbins do in the future to help sustain its profit levels?

Metamorphosis (Management change )

In 2000-2001, Pankaj chaturvedi took over as CEO - India and South Asia He restructured distribution and sales process

Main changes
To make the business viable for profitable for franchisees companies and

Right sizing-closed unprofitable outlets in C grade cities and streamlined the distribution network Size of store reduced to 200-350 sq. ft. to decrease the fixed cost Tie-up with hotels, airlines and top end restaurants Specific targeting - Upper middle class youth

New strategies (Product and Distribution)

Concentrated on A grades cities only for expansion Innovation-SOTF Outlets redesigned for change in ambience (kiosk) Started selling pre-packed ice creams in malls, theatres and other happening places Launched new distribution points Shop in Shop

New promotion Strategies

Allocated Rs 10 million Started joint promotion with multiplexes and malls Consumer promotion-Two schemes 1)Brochure scheme-Offered a 50 % discount and priced at Rs 299 2)Value additive scheme-Free scoops of ice cream The paanchvi pass campaign. The spiderman 3 campaign MTV Roadies 6.0 Drona, Love Story 2050

Continued ..
Tie-up with Pizza-Hut Distributed as freebies with big pizzas(B2b) Capitalized on festivals and offered coupons as corporate gifts

Distribution
Outsourced distribution network Consolidated Supply Chain

Training
Spoke and hub method for training centre selection Outsourced general module on Hygiene, First aid

First taste of Success

Net profit in year 2003 (after 11 years)

A big question
How long they can sustain in the market..?

Baskin Robbins
Quality Premium

Amul
Medium

Vadilal
Mediumlow

Quality Walls
Mediumlow Mostly Indian Flavors

Haagen Dazs
Super premium Mostly international.

Flavours 1000+ flavors, Focus only 120+ available Mostly international on Indian flavors + some Indian flavors (The Mostly flavors, (still Taste of Indian expanding in terms of India) Flavors offering Indian flavors.) Other features Parlors mostly in Outlets metros and urbanized Present all areas. over the country Outlets Present all over the country

Outlets Present all over the country

Only at select places even in the metros. E.g.: select city walk.

Sources:

Book : Business statistics , case study Ice cream market in India : changing tastes

Suggestions
We feel that some more Indian/regional flavours should be introduced in order to attract more customers. Introduction of nutritional, low fat ice cream flavors specifically for people with diabetes and in general to take care of the growing health concerns among the customers.

Pricing suggestions:
BR should price its non-exotic products lower than current to explore the non-upper class income group as well and to compete with the lower priced brands like Amul, Vadilal which account for a huge market share

Positioning : Value Price Matrix

Price
Sources: Book : Business statistics , case study Ice cream market in India : changing tastes

Competitors
In rural areas, Kulfis and ice creams made by small cottage industry are popular Amul: 38% market share. Huge emotional connection with Indian consumers. 70,000 stores across the country! Quality Walls:14% market share. Widespread network of pushcarts present on every street corner. Vadilal:12% market share. Strong player in western India (Maharashtra, Goa and Gujarat). Mother Dairy: 8% market share. Stronghold of North India. Its strength is the 4,000 pushcarts out on the streets.
Sources: Book : Business statistics , case study Ice cream market in India : changing tastes

Continued
BR faces stiff competition from Amul as it has a market share of 38% It also faces a major competition from the local producers and parlors which constitute 18% of the market share.

Sources:

Book : Business statistics , case study Ice cream market in India : changing tastes

THANKYOU!