Carvel Ice Cream: Developing the Beijing market

Résumé du document

By 1994, Carvel created a joint venture in China, ‘Beijing Carvel Food Company Limited'.
In 1997, sales went over 6 million Rmb (US$ 725,000). Considering that overall economy growth rate was 8% per year between 1998 and 2000, and that inflation was negative (-1,4%), I make the assumption that in 1999 sales was about 7 million Rmb. 45% came from ice cream cakes, so in 1999 the ice cream cake sales was about 3,150,000 Rmb. This will permit adding figures to the proposed marketing program. In this case, the problem is to overpass two facts: ice cream cakes are new to most Chinese and the product comes from quite an unpopular food group. Market decisions will answer 5 questions including the 4Ps.

Extraits

[...] Therefore, I suggest focusing mainly on the 4 main Beijing stores and on Chao Bai for launching our two new products. The 8 representatives should visit current sales accounts (supermarkets, bakeries and restaurants & bars) to introduce the 2 products, but also search for new accounts. Mr. Wang should focus on coherence between sales accounts and eliminate the third which perform poorly. What kind of communication? (Promotion) The budget is 165,000 Rmb. I considered 3 alternatives to propose a communication plan : The Beijing Shoppers Guide : It targets middle & upper class, about 250,000 readers (per year). [...]

[...] They are easier to reach and imply little adaptation of US marketing programs. They buy 10% of ice cream cakes, i.e Rmb. What are the Products to focus on, and at which Price? The key idea is to expand 2 US products to the Beijing market: Little Love (600g) and Piece of Cake (96g). Little Love is cheap (low purchase risk) and would induce a wide appeal (mostly from Little Emperors and mothers who want to please their family). As it is sold $7,99 in the USA, which correspond to 66 Rmb. [...]

[...] I suggest distributing 5,000 leaflets for each operation, to benefit from the unit cost ( 0.30 Rmb instead of 0.45 Rmb per sheet). I recommend to realise 5 operations (one every 10 weeks) for the year. Therefore, the total cost is 7,500 Rmb. Asian Hospitality Association It consists in an association with about 10,000 members (mid and upper class) which sell to them an annual entertainment coupon book. It could be a 12% coupon. It costs 4,000 Rmb for a half-page placement (perhaps 2,500 Rmb because of Mr. [...]

[...] Carvel Ice Cream: developing the Beijing market Sources Vandenbosch, Mark and Gleave, Tom (1998). Carvel Ice Cream developing the Beijing Market, Case # 99A017, Richard Ivey School of Business/UWO “Fierce Competition in China's Ice Cream Market”, People's Daily (May 2000) http://english.people.com.cn/english/200005/05/eng20000505_40214.html “Brand War Heats up Ice Cream Market”, China Daily (July 26, 2004) http://www.china.org.cn/english/2004/Jul/102193.htm Table of content Who is the target? 3 Middle & upper class 3 Little Emperors 3 Expatriate community 3 What are the Products to focus on, and at which Price? [...]

[...] As 800g Carvel cakes are sold around 100 Rmb, I use a cross product to define the selling price, i.e Rmb. I disagree with the solution of adjusting prices, because Carvel is already cheaper than competitors and also because it has just realised a cut of 10 to 20%. Moreover, the level of should not be increased in order to keep a clear limit between Carvel and popular ice cream brands. According a “survey conducted by the Beijing Consumer Association on ice cream markets, consumers consider taste and quality first when buying ice cream” (c.f. [...]