cold stone project

7/21/2019 Cold Stone Project

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ContentsProduct Statement ........................................................................................................................................ 4

Analysis of the External Environment ........................................................................................................... 5

Industry Trends ......................................................................................................................................... 5

Competitive Trends ................................................................................................................................... 7

Brand Competitors ................................................................................................................................ 7

Product Competitors ............................................................................................................................. 7

Generic Competitors ........................................................................................................................... 10

Total Budget Competitors ................................................................................................................... 10

Political Trends, Legal Trends and Regulatory Trends ............................................................................ 11

Franchising .......................................................................................................................................... 11

Food and Drug Administration ............................................................................................................ 11

Technological Trends .............................................................................................................................. 13

Economic Trends ..................................................................................................................................... 14

Cultural Trends ........................................................................................................................................ 17

Analysis of the Customer Environment ...................................................................................................... 19

Who ......................................................................................................................................................... 19

How many ............................................................................................................................................... 20

What ........................................................................................................................................................ 21

Why and How .......................................................................................................................................... 23

When ....................................................................................................................................................... 24

Why Non Customers ............................................................................................................................... 25

Where ..................................................................................................................................................... 26

Analysis of the Internal Environment ......................................................................................................... 27

Marketing strategies ............................................................................................................................... 27

Target Market ..................................................................................................................................... 27

Image ...................................................................................................................................................... 27

Marketing Programs ............................................................................................................................... 28

Advertising .......................................................................................................................................... 28

Product and Service Offering .............................................................................................................. 29

Distribution and Channel Programs .................................................................................................... 30

Pricing .................................................................................................................................................. 30


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Sales strategy and Sales force effectiveness ....................................................................................... 30

Marketing research /intelligence gathering efforts ............................................................................ 30

Public relations/publicity .................................................................................................................... 31

Financial Performance ............................................................................................................................ 32

Additional Company Characteristics ....................................................................................................... 33

Technical Capabilities .......................................................................................................................... 33

Available Resources ............................................................................................................................ 33

Production Capacity ............................................................................................................................ 33

Career Opportunities .......................................................................................................................... 34

SWOT Analysis............................................................................................................................................. 35

Strengths ................................................................................................................................................. 35

Weaknesses............................................................................................................................................ 37

Opportunities .......................................................................................................................................... 38

Threats .................................................................................................................................................... 39

Marketing Goals and Objectives ................................................................................................................. 40

Goals ....................................................................................................................................................... 40

Objectives ............................................................................................................................................... 40

Marketing Strategies ................................................................................................................................... 41

Target market ......................................................................................................................................... 41

Value Proposition .................................................................................................................................... 42

Positioning Statement ............................................................................................................................. 42

Issues Analysis ......................................................................................................................................... 43

Action Plans ................................................................................................................................................. 45

Valpak Savings Coupons .......................................................................................................................... 45

Free Smoothie Sample at Gasparilla Distance Classic Race Expo ........................................................... 46

Customer Loyalty Card ............................................................................................................................ 47

University of South Florida Freshman Orientation Promotion ............................................................... 48

Tuesday Free Kids Giveaway ................................................................................................................... 49

Dog Yappy Hour ...................................................................................................................................... 50

Student Study Break promotion ............................................................................................................. 51

Clear Channel Outdoor Digital Billboard ................................................................................................. 52


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Senior Citizen Afternoon Happy Hour .................................................................................................... 53

Monthly Customer Drawing .................................................................................................................... 54

Marketing Budget ....................................................................................................................................... 55

What We Learned ....................................................................................................................................... 56


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Product StatementAward-winning Cold Stone Creamery has been serving up superior ice cream, cakes, cup cakes and

smoothies and shakes for over 20 years. In 1988, founders Donald and Susan Sutherland pursued their

ice cream dream whenthey opened the first Cold Stone Creamery in Tempe, Arizona. Since they were

ice cream lovers themselves, their mission was to give customers the to make people happy and give

them the ultimate ice cream experience.1 There are more than 1,450 Cold Stone creamery franchises

located throughout the United States and in countries all over the world. Currently, there are 15

locations throughout Hillsborough County. The company is based in Scottsdale, AZ and is owned and

operated by Kahala Franchising, L.L.C.

Industry experts have referred to Cold Stone ice cream as super premium because it is made fresh

every day in each store. All ice cream orders are called creations, because the ice cream artists use a

frozen granite stone to mix anything and everything into any ice cream flavor. There are over 11 million

possible creations and after years of practice, some of the favorites have been named Cold Stone

Signature Creations.2 For ice cream lovers who want to indulge in flavors and not the calories, Cold

Stone has several options they call, Healthy Indulgences. These health conscious customers can

choose from non-fat no sugar added ice cream, Sorbet flavors and non-dairy smoothies.

The ice cream creations are offered in three sizes: 5 oz, 8 oz, and 12 oz. The sizes are creatively named

Like It,Love It, and Gotta Have It respectively. There is also a 3 oz kids size available for young

Cold Stone lovers. Customers that really Gotta Have it canorder larger quantities to go in either

mine, ours and Everybodys sizes (small, medium and large). Cold Stone treat prices are $3.29 for

a Like it, $3.39 for a Love it, $3.79 for a Gotta have it, and $1.69 for a kids size. To go prices

range from $6.99 to $9.99 and toppings start at 30 cents each.

1Our Story Coldstone Creamery. September 6, 2010 https://www.coldstonecreamery.com/about/cold_stone_story.html2Our Story Coldstone Creamery. September 6, 2010https://www.coldstonecreamery.com/about/cold_stone_story.html
https://www.coldstonecreamery.com/about/cold_stone_story.htmlhttps://www.coldstonecreamery.com/about/cold_stone_story.htmlhttps://www.coldstonecreamery.com/about/cold_stone_story.htmlhttps://www.coldstonecreamery.com/about/cold_stone_story.htmlhttps://www.coldstonecreamery.com/about/cold_stone_story.htmlhttps://www.coldstonecreamery.com/about/cold_stone_story.html


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Analysis of the External Environment

Industry Trends

The United States Frozen dessert market has two main channels: retail and foodservice. The retail

market encompasses sales of frozen goods through grocery, convenience, specialty and discount stores

while the foodservice market includes sales from scoop shops, restaurants, vending machines and other

establishments. In 2009, it was estimated that the U.S. ice cream and related frozen dessert market

reached 24.6 billion dollars, a 1.5% increase from 2006. In the same time period, nearly 60% of all U.S.

frozen dessert sales were made through foodservice.3

The foodservice market has been faced with tough times because of the ongoing recession. Consumers

are eating at home more, and are buying ice cream from retailers to eat at home instead of going out.

The ice cream sales have not grown since 2006 and experienced a 3.6 percent decrease from 2007

2008. It is forecasted that foodservice ice cream sales will continue to decline, up to 4 percent, through

2013.4 Although this seems like bad news, these shops have a unique advantage. Going out for a bowl

of ice cream allows consumers to indulge in a small luxury, but be mindful of their wallet during difficult

economic times. Super premium ice cream shops, are a bit more expensive, but aim to give consumers

the most bang for their buck. When they visit these upscale shops, they are looking for more than a

bowl of ice cream; they are looking to have an experience. This trend is called The Starbucks effect,

and causes consumers to pay more to get a personalized experience.5

Being health conscious continues to be a trend with consumers and has lead to the comeback of frozen

yogurt shops. From 2005 to 2009, foodservice frozen yogurt sales grew 10.9 percent while during the

same time period foodservice ice cream sales experienced only a 4% growth because of declines in 2007

and 2008.6 Consumers want still want to treat themselves to something sweet, but without the extra

calories. The new frozen yogurt shop is self-serve, where customers dispense and mix their own flavors,

pick out toppings and pay by weight. Self-serve shops allow consumers to still have a personalized

experience without having to pay a premium price. In the Tampa Bay area, Yogurtology and Yogurt Spot

are two self-serve yogurt places have recently been popping up.

3Ice Cream and Frozen Desserts in the U.S.: Markets and Opportunities in Retail and Foodservice, 6th Edition MarketResearch.com

September 8, 20104Market Size and Forecast Ice Cream shops US 2009 Mintel report September 8, 2010

5New Product Trends Ice Cream and Frozen Desserts. Marketresearch.com 2010

6Foodservice Frozen Yogurt Is a Soft-Serve Market Ice Cream and Frozen Desserts. P.71. Marketresearch.com 2010


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Health conscious consumers are demanding great tasting natural food with simple ingredients. In

response to this trend, Haagen-Dazs came out with their Five series of ice cream. Each flavor of

Haagen-Dazs Five has only five natural ingredients: milk, cream, sugar, eggs and one additional flavoringredient. All of the ingredients are easily recognized by consumers and make them feel good about

what they are putting into their bodies.7

The demand for organic products is no longer something found only in urban areas and in college towns.

In 1997 organic products was a 3.6 billion dollar industry and in 2007 it was recorded to have grown to

18.9 billion dollars, making organic products mainstream. Many mainstream ice cream manufactures,

such as Ben & Jerrys, have reacted to this demand and now offer an organic version of their products.8

Co-branding is a relatively new trend where two different franchises, usually from the same parent

company, provide offerings from one location. Over 10 years ago, Dunkin Donuts and Baskin Robbins

were two of the first franchises to successful open a co-branded shop. Recently, many other franchises

have followed suit, including Maggie Moos and Great American Cookies; Pizza Hut and Taco Bell; and

Marble Slab Creamery and a NexCen preztelmaker subsidiary. Co-branding is a way that both brands

can take advantage of their complimentary traffic patterns, raise awareness, grow, and keep costs

down.9

7Haggen-Dasz Five Stands Out Ice Cream and Frozen Desserts. P. 293 Marketresearch.com 2010September 8, 2010

8USDA says Organic is Mainstream Ice Cream and Frozen Desserts. P. 66 Marketresearch.com 2010September 8, 2010

9The Major Ice Cream Chains Ice Creamand Frozen Desserts. P. 157. Marketresearch.com 2010 September 8, 2010


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Competitive Trends

Brand Competitors

Marble Slab Creameryclaims that in 1986 it was the first shop to use a frozen granite slab to blend

mix-in toppings into the ice cream, per the direction of a customer. The company began in theSoutheastern region of the United States and has since expanded to nearly 400 locations in 35 states,

Canada, the United Arab Emirates, Kuwait, and Mexico.10 There are five locations within the Tampa Bay

Metropolitan Area.11Marble Slab Creamery had $89 million in sales in

2008, making up 6.9 percent of the leading ice cream shop market.12

In September 2009, Marble Slab announced a line of shakes for

"grown-up" tastes. The new shakes, under the Club Marble label,

include Irish Cream, espresso, and island coffee flavors. In an effort to

become more environmentally friendly, the company launched a

program in the spring of 2010 to phase out plastic containers and

replace them with paper products. Its packaging displays the phrase,

Find Happiness Within, a sentiment that embodies the culture of the brand.13 The company has

defined its brand through a gourmet proposition maintained by a chef-driven vision. This concept is

being promoted as part of the companys rebranding initiative. In an effort to reposition its global brand

image to better reflect its gourmet ice cream artistry experience, Marble Slab Creamery collaborated

with contestants from the television show Top Chefto create, Celebrity Sundaes.14

Product Competitors

Dairy Queencombines ice cream and fast food under one roof. This is an effort to produce leverage

over its competition, by creating a restaurant-like atmosphere to attract families. Dairy Queen,

headquartered in Minneapolis Minnesota, has 5,600 stores in the U.S., Canada, and many other various

countries.15 There are 21 locations in the Tampa Bay Metropolitan Area.16In 2008, Dairy Queen had

$2,550 million in sales, making up 50.5 percent of the top U.S. ice cream shop chain market. 17In 2009,

Dairy Queen announced The Sweet Deals value menuwhich includes nine items that can be purchased

10Ice Cream and Frozen Desserts in the U.S.: Markets and Opportunities6

thEdition, pg.167

11www.yellowpages.com(September 14, 2010)

12Ice Cream ShopUSDecember 2009, Mintel Oxygen, Leading Companies


thEdition, pg.168

14Ice Cream ShopUSDecember 2009, Mintel Oxygen, Brand Qualities

15Ice Cream and Frozen Desserts in the U.S.: Markets and Opportunities6th Edition, pg.163

16www.yellowpages.com (September 14, 2010)

http://www.yellowpages.com/http://www.yellowpages.com/http://www.yellowpages.com/http://www.yellowpages.com/


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in combinations of two for $3, three for $4 or four for $5. Items include

a cheeseburger, all-beef hot dog, chicken wrap, French fries, onion

rings, salad, beverage and sundae or cone.18Dairy Queen is aggressively

seeking innovative ways to engage consumers and build brand equity

through social media, mobile messaging and virtual branding. Dairy

Queen spent 78.1 million in advertising expenses in 2008, an 86.3

percent share of the top ice cream shop advertisers. 19 Dairy Queen is best known for its signature

Blizzard treats, and they account for about a quarter of its total sales. The company puts a huge

emphasis on its promotional support because of how much sales come from this trademark product.

The company created a Blizzard of the Month campaign, which is advertised on television to create

product awareness and excitement.

Baskin-Robbinsis the largest frozen dessert chain in the United States and the world, with more than

2,800 locations in the U.S. and 6000 throughout the world and 2,800 locations in the United States.

There are 25 locations in the Tampa Bay Metropolitan Area.20 Baskin-

Robbins had $572 million in sales in 2008, making up 11.3 percent of

the top U.S. ice cream shop chain market.21 Baskin-Robbins is a leading

player in the ice cream industry and embodies the brand qualities of a

traditional ice cream shop. The company has classic menu offerings and

offers consumers a variety of flavors. Baskin-Robbins plans to reinvent

the brand by offering Soft Serve ice cream and create a new value price

point. In addition, Baskin-Robbins is beginning a new concept format

called BR Expressfeaturing a product line based from the future soft serve menu.22In 2009 Baskin-

Robbins suffered and was faced with challenges from the recession. In response, it released a new

Buy-One Get-Onepromotion called BOGO for frozen beverages. Baskin-Robbins tries to engage its

customers and has a Birthday Club, which offers a free ice cream cone to every member on his or her

birthday and special savings coupons all year long via e-mail.23


19Ice Cream ShopUSDecember 2009, Mintel Oxygen, Advertising and Promotion

20www.yellowpages.com (September 14, 2010)



23Ice Cream and Frozen Desserts in the U.S.: Markets and Opportunities6th Edition, pgs. 159


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Ben & Jerrys brands identity is shaped byinnovative combinations of traditional ingredients paired

with some very unorthodox names. 24They have roughly 750 locations with approximately 500 of those

in the United States.25Ben & Jerrys had $240

million in sales in 2008, making up 18.5

percent of the leading ice cream shop

market.26 There are four locations in the

Tampa Bay Metropolitan Area.27Ben & Jerrys

spread environmentally-friendly messages and is committed to activism. The company uses limited time

offers of particular flavors to raise money and awareness for a variety of different causes. For example,

a limited edition flavor was launched to recognize Sir Elton Johns first trip to Vermont and to raise

money for the Elton John AIDS Foundation.28The proceeds from this particular flavor were donated to

Elton Johns AIDS Foundation and simultaneously boosted the brands identity. Ben & Jerrys also value

its customers and have employed a Free Cone Dayas a customer appreciation effort for over 30 years.

Haagen-Dazswas the first super premium ice cream brand and was started by Reuban Mattus in 1960.

The company was originally packaged ice cream that was available in shops throughout New York City.

In 1976, the first Haagen-Dazs shop was opened by Rose Matthus, the ownersdaughter, and it was an

instant success.29 It is believed that Haagen-Dazs laid the

groundwork for other super premium scoop shops, including

the brands greatest rival, Ben & Jerrys. The company

currently has over 900 shops in 50 different countries,

including upscale locations in Europe and Japan.30There are

three locations within the Tampa Bay Metropolitan Area.31

Haagen-Dazs had $100 million in sales in 2008, making up 7.7

percent of the leading ice cream shop market.32Haagen-Dazs

prides itself on using simple and pure ingredients and promotes its brand as, made like no other. The

Haagen-Dazs brand trademark is the use of unique upscale ingredients such as Baileys Irish Cream,


25Ice Cream and Frozen Desserts in the U.S.: Markets and Opportunities6th Edition, pgs. 160


27www.benjerry.com (September 14, 2010)

28Ice Cream ShopUSDecember 2009, Mintel Oxygen, Innovations and Innovators

29History Haagen-Dazs September 20, 2010 http://www.haagendazs.com/company/history.aspx


thEdition, pgs. 127-128

31www.yellowpages.com(September 14, 2010)

http://academic.mintel.com.ezproxy.lib.usf.edu/sinatra/oxygen_academic/search_results/show&/display/id=393515/display/id=501044/display/id=123076&anchor=123076http://www.yellowpages.com/http://www.yellowpages.com/http://www.yellowpages.com/http://www.yellowpages.com/http://academic.mintel.com.ezproxy.lib.usf.edu/sinatra/oxygen_academic/search_results/show&/display/id=393515/display/id=501044/display/id=123076&anchor=123076


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caramelized pear & toasted pecan, and crme brule. One of the brands latest innovations, Five,

features only five ingredients in the all natural ice cream. While the main goal of releasing Five, was to

offer a pure and natural product line, it also claims to have less fat than its other ice creams. 33

Generic Competitors

Name Brand Ice Cream (Grocery Store)

Generic Brand Ice Cream (Grocery Store)

Smoothies

Italian Ice

Frozen Novelties

Frozen Yogurt

Gelato

Coffee

Juice

Total Budget Competitors

Donuts

Cookies

Cupcakes

Chewing Gum

Potato Chips

Pizza



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Political Trends, Legal Trends and Regulatory TrendsFranchising

Franchising is a method of expanding a business and distributing goods and services in accordance with

terms and regulations set by the franchisor, also known as the business developer. The business

expands because the franchisor licenses its name and business operations to an individual or entity (the

franchisee).34 Franchising is a good way for someone new to business to start out because some else

has already worked out the business strategy. Over time, franchising has become increasingly more

popular and there was a franchise boom between the years 2002-2008. Each state has different laws,

but under Florida Law, a franchise is an agreement between two or more persons that involves a

commercial relationship giving the franchisee a right to do business using the franchisor's services .35

Nearly 1,400 Cold Stone stores have opened around the world over the last decade and in 2006,

Entrepreneur magazine ranked Cold Stone as the 11th

fastest growing franchise. The initial applicationprocess to become a Cold Stone franchisee can take up to three months. The initial franchise fee is

$42,000 and a total investment between $294,250 and $438,850 is required. When the application is

approved, Cold Stone must approve the store location and lease agreements. To ensure success, the

new owner must attend Cold Stone University, a two weeks training course located at the

headquarters in Scottsdale, Arizona.36

Food and Drug Administration

In the United States, there are 58 Million people considered to be overweight, 40 million people

considered to be obese, and another three million who are considered morbidly obese. These

percentages were calculated using the Body Mass Index (BMI) standards. Those with a BMI between

18.5 and 24.9 are usually considered healthy. Adults with a BMI between 25.0 and 29.9 are considered

overweight and adults with a BMI between 30.0 and 39.9 are considered obese. According to these

standards, a BMI over 40.0 is considered morbidly obese.37 These numbers are only increasing and it

has become a concern for the FDA.38 The FDA required all food items to have a complete nutrition label

to aid consumers in making healthy choices. Nutrition labels are not just for grocery items, in order to

34Snyder, Garth 23 November 2009 FAQs on Franchising FranchisingLaw.com September 20, 2010

35Florida Requirements Guide to Florida Law: Florida Franchising and Dealerships . September 20, 2010

http://www.weblocator.com/attorney/fl/law/franchdeal.html36"Cold Stone Creamery - Steps to Becoming a Franchisee." Cold Stone Creamery - The Ultimate Ice Cream Experience. Web. 16 Sept. 2010..37

Jensen MD. Obesity. In: Goldman L, Ausiello D, eds. Cecil Medicine. 23rd ed. Philadelphia, Pa: Saunders Elsevier; 2007:chap 239.38"Obesity Statistics for Adults, Children." Weight Loss Diet Program, FREE Diet Advice! Weight Loss Diets, Low Carb Plan. Web. 16 Sept. 2010..


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comply with FDA regulations, ice cream parlors are required to have a nutrition label.39All stores must

also abide by local sanitation standards and routine visits from Health Inspectors. In accordance with

Section 509.013, Florida Statutes states what exactly a food establishment is and then requires that

inspectors make routine visits about two times a year.40

39 "Cold Stone Nutritional Information." Cold Stone Creamery - The Ultimate Ice Cream Experience. Web. 16 Sept. 2010.40

"Food Service Definition." DBPR: Home Page - Florida Department of Business and Professional Regulation. Web. 19 Sept. 2010.

.


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Technological Trends

Many companies strive to become one step over the rest in the ice cream industry. Marble Slab

Creamery was the first company that used a frozen granite stone to blend super premium ice cream

with mix-ins. Frozen granite was chosen because it has a non-porous surface and can consistently

remain at five degrees Fahrenheit.41

Social e-gifting is a relatively new Facebook application that makes it easy for companies to engage

customers through social media. Consumers can go to the First Data Social e-gift page on Facebook and

quickly send a tangible gift to a friends Facebook account or e-mail address.42The company has plans

to expand but currently only offers gifts from Cold Stone Creamery.

41https://www.coldstonecreamery.com/about/cold_stone_glossary.html

42http://www.retailcustomerexperience.com/article/127182/Cold-Stone-Creamery-debuts-social-e-gifting-

program


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Economic Trends

The United States has the largest economy in the world, but is currently in what some consider an

economic crisis. It was predicted that the economy would be making a strong turn around this year but

last quarter (April June 2010), the economy only grew 1.6 percent; less than the 2.4 percent that

economists had previously predicted. Economists believe that in order to prevent further

unemployment, the economy needs to sustain a 2.0 2.5 percent growth rate. Although things are

looking grim for the end of 2010, experts predict the economy will begin to pick up in 2011. 43 The

Tampa Bay area is experiencing very little economic recovery, is currently ranked as one of the weakest

metropolitan areas in the nation.44 The recession has heavily impacted the ice cream industry. Cold

Stone has closed approximately 160 stores in two years, and more than 20% of its current stores are up

for sale. Many franchisees are overwhelmed with debt, and some store owners are even claiming

personal bankruptcy.45

Income LevelsAs stated in the target market, there are 2,747,272 living in the Tampa Bay region. The average annual

household income is $64,267 and the median is $47,484. Tampa Bay falls under the national average

and mean which are $71,128 and $52,175 respectfully. The cost of living is less in Tampa Bay then many

areas and consequently people make less money which could account for the difference. The household

annual income levels are being affected by the high unemployment rate in Tampa Bay. 46

UnemploymentThe entire nation is dealing with high unemployment rates and many people have little hope of finding a

job. Unfortunately, a big percentage of this group has also lost their home due to foreclosure. In 2009

the national unemployment rate was 9.8 percent and the Florida rate was much higher, 12.9 percent.

Although the entire nation is suffering, Tampa Bay is worse off with a reported 13 percent

unemployment rate during this same time period. 47

43

Grey, Barry. 28 August 2010US slashes estimate of second-quarter economic growth World Socialist Website. September 16, 2010.http://www.wsws.org/articles/2010/aug2010/econ-a28.shtml44

Harrington, Jeff. 15 September 2010 Tampa Bay ranks Among the Worst in Economic Recovery TampaBay.com September 16, 2010.http://www.tampabay.com/news/business/tampa-bay-area-ranks-among-nations-worst-in-economic-recovery/112167145

http://www.lewrockwell.com/decoster/decoster132.html46

Demographics September 16, 2010 Tampa Bay Population Regional Data Profile 2010. http://www.tampabay.us/relocation-information/regional-data-profile.aspx47

Demographics September 16, 2010 Tampa Bay Population Regional Data Profile 2010. http://www.tampabay.us/relocation-information/regional-data-profile.aspx
http://www.lewrockwell.com/decoster/decoster132.htmlhttp://www.lewrockwell.com/decoster/decoster132.htmlhttp://www.lewrockwell.com/decoster/decoster132.htmlhttp://www.lewrockwell.com/decoster/decoster132.html


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Tax

The on-going availability of sugar is essential to making super premium ice cream and there has been

concern of an anticipated sugar shortage. There is some concern that a sugar shortage may occur in the

next two years because of quotas on imports imposed by the USDA.48 In addition to the possibility of a

sugar shortage, there is also the possibility that legislators could impose a Fat Tax on foods and/or

beverages high in sugar content.49

Inflation rate

The inflation rate is one of the most important economic forces because it consistently weighs in on the

value of a nation's currency. The inflation rate in the United Stated has remained fairly consistent and

averaged out to 3.5 percent from 2005-2009. In 2010, the interest is averaged out to be 1.85 percent,

and is forecasted to slowly drop for the rest of the year. On aseasonally adjusted basis, the CPI-U

increased 0.3 percent in August, the same increase that was reported in July.50

Trade RestrictionsThe Office of Foreign Assets Control (OFAC) of the United States, controls economic and trade

authorized based on the foreign trade laws. On January 1, 2008, the North America Free Trade

Agreement (NAFTA) was fully implemented. This allowed the United States, Canada, and Mexico to

48FoodNavigator-USA.com, September 29, 2009

49FoodNavigator-USA.com, July 29, 2009

50http://inflationdata.com/inflation/inflation_rate/CurrentInflation.asp


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benefit the agriculture and economic well being of each country. In order to trade within the

agreement, each food/drug product must follow requirements by the Animal and Plant Health

Inspection Service (APHIS) for all meat, plant, poultry, and egg products. Trade restrictions have now

been lifted from Mexico and the United States, and now allow sugar, corn, dry edible beans, nonfat milk

and high fructose corn syrup to be traded freely.51 The United States has spent nearly 20 million dollars

in an attempt to revitalize the Mexican production challenges and assist in better trading.52

Interest RatesThe current prime interest rate is 3.25 and is expected to increase to 3.50 in 2011 and to 4.0 in 2012. In

Tampa, Florida the sales tax associated with products is 7 percent.53 The increasing interest rates are

going to increase the recovery time of the economy and decrease consumption. Increased interest rates

affect the cost of borrowing and lead to higher taxes to cover increasing national debt. Consumer and

business confidence will remain low, causing an increase in savings and a decrease in disposable

income.54

Consumer Price IndexThe Consumer Price Index (CPI) program produces monthly data on changes in the prices paid by urban

consumers for a representative basket of goods and services. The index for all items, less food and

energy, was unchanged in August after rising 0.1 percent in July.55

Consumer Confidence

Marketers want consumers to be confident, because confident consumers spend more money. The

recession officially started at the end of 2007 and with that, a drop in consumer confidence. By the end

of 2009, the percentage of confident consumers was on the rise and by the end of the year; the group

increased by 25 percent. For the first time in two years confident consumers outweighed anxious

consumers by 3.5 million, and 47.6 million were reported to be confident consumers. 56

51"North American Free Trade Agreement (NAFTA) ." USDA Foreign Agricultural Service (FAS). 2 Jan. 2008. Web. 20 Sept. 2010.

.52"Export Products Returned to the United States." FSIS Advertisement Rotator. 5 Sept. 2007. Web. 20 Sept. 2010.

.53

"Prime Rate Forecast: Projected Prime Rate Values 2010-2040." Mortgage-X ~ Everything There Is To Know About Mortgage Loans. Web. 20Sept. 2010. .54

"Effects of Increasing Interest Rates Economics Help." Economics Help - Helping to Simplify Economics. Web. 20 Sept..55

http://www.bls.gov/56

The Post Recession Consumer 2010 marketresearch.com September 14, 2010


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Cultural TrendsDemographic TrendsAs stated earlier, there are 2,747,272 people living in the Tampa bay area and there is about an even

number of males to females. Three dominant races reside in Tampa and it breaks down to be 47.7

percent White, 25.2 percent African American, and 22.2 percent Hispanic Mexican, Puerto Rico, Cuban,

and others).57 African American household consume more ice cream then the typical American

household.58 The Hispanic culture has influenced some ice cream flavors, such as dulce de leche. The

Hispanic population is expected to grow, and if correctly marketed, will spend money.59

Generation X, ranging from 1961 to 1981, currently makes up about 20% of the population. They are

often single and still in college, due to taking time off for personal reasons. Generation X is concerned

with their health. They are considered a more materialistic generation that likes nice things. Their

salaries range from $15,000 to $45,000 a year, and they are more concerned with how they spend their

time rather than how much money they are making. Although money is not their main priority, many

are worried about retirement, and are concerned with spending money60

Generation Y, also called millennials, were born between 1979 and 1990. They are known as the most

ethnically diverse and technological savvy generation yet. The majority of generation Y is either still in

college or already holds at least a Bachelors degree. This generation believes money stands for success,

and put a lot of emphasis on their image and material items. This mindset has caused a good

percentage of them spend more than they make, resulting in low bank account balances and higherdebt. They tend to lead busy lifestyles, eat out often and put on weight.61

Lifestyle TrendsMany Americans are making a stride towards healthier lifestyles, and healthier desserts are becoming

more popular as well. These health trends are making frozen yogurt and healthy toppings, such as fruit,

a more favorable option when choosing a frozen dessert. Health and fitness have been becoming more

and more popular United States, however about 68% of adults and 32% of children are overweight.

57"Tampa City, FL." U.S. Census Bureau. U.S. Census Bureau, 2008. Web. 20 Sep 2010.

.58

"Per Capita U.S. Frozen Dairy Product Consumption (Annual)." Understanding Dairy Markets. Agricultural and Applied Economics, 2006.Web. 20 Sep 2010. .59

The US Market for Ice Cream and Related Frozen Desserts. Packages Facts. MarketResearch.com 200760

"Generational Market Research Bundle: Baby Boomers, Gen X and Gen Y." Packaged Facts . Market Research.com 200861

"Generational Market Research Bundle: Baby Boomers, Gen X and Gen Y." Packaged Facts . Market Research.com 2008


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Food portions in America are generally supersized, which cause many Americans to suffer from portion

distortion, and eat about 30% more than they would when served a smaller portion. Therefore, many

people in the US are trying portion control diets. Because of the popularity of portion control marketers

are introducing smaller portion snacks, such as 100 calorie packs, to promote weight loss. About 38.7%

adults watch their diet to maintain or lose weight, and about 20% count calories.62

The economy is currently ailing; in some situations parents may only be able to take their children out

for ice cream, preferably lower priced ice cream. Consumers of ice cream frequently look for variety

and new flavors when going out for frozen dessert. About 89% of US households keep ice cream or

sorbet in the house. A majority of adults prefer ice cream to other desserts, such as cookies or cake. In

a survey, 67% said that it was worth it to indulge in full fat ice cream. Ice cream can be considered good

for you because of its good source of protein, calcium, and vitamins, but it is generally not, so it has

been being created in low fat or sugar free. Frozen yogurt is making a comeback as well, but in more

flavors to satisfy health conscious consumers.63

Cultural ValuesAccording to a study done by Panasonic to understand behavior and attitudes of families, 48% of

parents claim that they do not spend enough time with their children, and 63% would pay more on

technology if it meant spending more time with family. 98% of parents find it essential to spend time

with their family. Only 52% claim that they spend a sufficient amount time with family. Some parents

believe watching television and playing video games is spending quality time with their children. Others

believe technology is tearing their families apart and even leading to neglect. 84% of generation Xs take

pleasure in spending time with family, others would either spend time elsewhere or alone.64

62Weight Management Trends in the US. Packaged Facts. MarketResearch.com 201063The US Market for Ice Cream and Related Frozen Desserts. Packages Facts. MarketResearch.com 200764

"Survey: Families Need Technology to Spend Quality Time with One Another."Lifestyle . N.p., 02 Aug 2007. Web. 18 Sep 2010..


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Analysis of the Customer Environment

WhoCold Stone Creamery is a market leader and ranked third in a 2008 list for growth of United States ice

cream chains.65 Cold Stone lists its perfect demographics as, a population of 15,000 within one mile,

consumers aged 18 to 36, and families with a household earning to $35,000 dollars or more.66 The

concept of Cold Stone is more than just ice cream; its mission is to make people happy. Cold Stone

lives up to this by offering an entertaining experience to consumers while they indulge in a customized

treat.67 A high level of customer service is what these consumers value and expect; it is why they are

loyal to the Cold Stone brand.

Psychographically, the customer base for Cold Stone can be easily compared to Starbucks coffee shops.

Consumers go to Starbucks for more than a cup of coffee; they go to have a personalized experience.

Creating a customer experience is sometimes referred to as the Starbucks effect. This effect has

been adopted and implemented by Cold Stone. Through this, Cold Stone is meeting the demands of its

customers and turning ice cream into much more than a commodity.

In most cases, the purchaser of a Cold Stone creation is also the user. Cold Stone creations would be

difficult for someone other than the user to pick out, because they are based up personal taste

preferences. There are times when one person buys multiple creations, but they usually know ahead of

time what each user wants. The purchasing decision is made by the consumer but can be highly

influenced with external forces. Cold Stones are located in high traffic areas where it is easy for

consumers to come in for a spontaneous treat. It is very common to see Cold Stones next to movie

theaters, schools, or in strip malls.

65Table 4-3 Leading U.S. Frozen Dessert Chains by Units, 2008 Ice Cream and frozen yogurt market U.S. marketresearch.com

66Submit a site location: introductionCold Stone Creamery http://www.coldstonecreamery.com/about/submit_location_intro.html

67The innovation track Ice Cream and frozen yogurt market U.S. Marketresearch.com


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How many

Cold Stone Creameries are franchising and its customer environment varies upon location. The average

check is $9.00, which is usually for two people. Most people visit a Cold Stone in pairs, but according to

a store owner in FL, it is not uncommon for consumers to come alone. On average, a Cold Stone store

serves 140 people per day on Monday through Thursday. Weekends tend to be busier, and a store will

serve 250 to 400 people Friday through Sunday. During football season, the weekend sales tend to

drop. The location of the Cold Stone also makes a big difference on consumer demand. A store next to

a movie theater would be busiest on Fridays, while a store on a college campus would be busiest

Monday through Thursday.68

Seasons tend to make a noticeable difference and most stores experience higher sales from March

through August. Depending on location, Florida for example, seasonal sales variations could be

irrelevant. To keep customer interest during colder months, Cold Stone creates special seasonal and

holiday themed flavors. In 1999, Cold Stone took a risk and opened a store in Alaska. It was quickly

discovered that consumers will eat ice cream even when it is cold outside. The Alaska store believes the

sales stay consistent because of the excellent product quality and having the right kind of employees to

create excellent customer experiences.69

68Cold Stone Store owner in Winter Park, FL

69Opening and ice cream store in cold seasons U.S. Market for ice cream and other goods. Mintel Report


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WhatCold Stone makes its ice cream in stores daily using high end premium products. Every ice cream

served is referred to as a Creation because each one is considered a work of art.70 The ice cream is

blended on a frozen granite stone, with different combinations of ingredients, to make unique creations.

There are over 11.5 million possible combinations that consumers can create and eat.71 The ice cream

can be served in a bowl, waffle cone or waffle bowl. The Creations are available in three sizes: like it

(5oz.), love it (8 oz.), and gotta have it (12 oz.).

Cold Stone Creamery also offers a to go option forat-home ice cream consumption. Consumers can

personalize a creation to bring home and choose from: mine(1-2 servings), ours(3-4 servings), and

everybodys(4-6). Several different 32 oz. quart containers are available with preselected creations

for those that want to grab something quick to bring home. Health conscious consumers can indulge in

a Sinless Sans Fat, a non-fat no sugar added ice cream. Cold Stone Creamery also offers a variety of non-

dairy Sorbets and non-dairy Smoothies to meet consumers health needs.

In 2009, Cold Stone entered the gourmet cupcake market and began creating ice cream cupcakes to sell

in-store. The three Cold Stone signature cupcakes are, Cake Batter Deluxe, Sweet Cream and Double

Chocolate Devotion. The cupcakes are sold in packages of six for $9.99.72 In addition to the cupcakes,

Cold Stone Creamery has some other alternatives to scooped ice cream: Ice-Cream Cakes, Ice Cream

Cookie Sandwiches, Smoothies, Shakes, and Iced and blended Coffees.

Cold Stone Creamery uses several complimentary products with its ice cream. Waffle Cones can be

thought of as complimentary because it would not be consumed without ic e cream. Several mix-ins

that are used to make a Custom Creation can also be considered as complimentary products. These

include: apple pie filling, cherry pie filling, peach pie filling, graham cracker pie crust, caramel, cinnamon,

fudge, sprinkles, sugar cone pieces and honey.73 Although the listed mix ins are tasty, they wouldnt

necessarily be consumed alone.

70Ice Cream and Frozen Desserts in the U.S.: Markets and Opportunities6th Edition, pg. 162

71http://www.coldstonecreamery.com/icecream/about_our_ice_cream.html(October 1, 2010)

72Ice Cream ShopUSDecember 2009, Mintel Oxygen, Innovations and Innovators

73http://www.coldstonecreamery.com/icecream/custom_creations.html(October 6, 2010)
http://www.coldstonecreamery.com/icecream/about_our_ice_cream.htmlhttp://www.coldstonecreamery.com/icecream/about_our_ice_cream.htmlhttp://www.coldstonecreamery.com/icecream/about_our_ice_cream.htmlhttp://www.coldstonecreamery.com/icecream/custom_creations.htmlhttp://www.coldstonecreamery.com/icecream/custom_creations.htmlhttp://www.coldstonecreamery.com/icecream/custom_creations.htmlhttp://www.coldstonecreamery.com/icecream/custom_creations.htmlhttp://www.coldstonecreamery.com/icecream/about_our_ice_cream.html


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Today, consumers are focused on going green in almost every aspect of their lives. Frozen dessert

marketers are trying to appeal to these consumers by implementing environmentally friendly practices.

Kahala Corp., the parent company of Cold Stone Creamery, reported in March 2008 that it was drafting a

three year plan to incorporate more sustainable and green practices. Among its efforts would be

initiatives such as, incorporating more water and energy-efficient equipment at the companys

headquarters and eventually at chain units; challenging suppliers of food and paper products to provide

more sustainable and fair trade goods; and remodeling or developing stores to incorporate more eco-

friendly features. The company reported that it is too early to determine how much the implementation

process would cost franchisees.74

74Ice Cream Reporter, March 2008 (October 5, 2010)


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Why and How

Cold Stone Creamery offers personalized ice cream creations, shakes, smoothies, cupcakes and cakes for

each customer and strives to make people happy. Cold Stone is in the business of making people

happy and even made it their mission statement. Staying true to the mission statement is how Cold

Stone satisfies its customers emotional and comfort needs. Consumers might also visit Cold Stone

simply because they are hungry and a Cold Stone treat meets that basic need.

Cold Stones biggest competitor is Marble Slab Creamery; it has five locations in the Tampa Bay area and

offer very similar products. Although Marble Slab can compete on the basis of similar products, they do

not have the same entertainment factor as Cold Stone. For example, Cold Stone sings a song every

time someone puts money in the tip jar, where Marble Slab does not. Cold Stone went a step further in

connecting the customer with their ice cream by categorizing size and already set creations. The names

of the sizes, like it, love itand gotta have it, allow the customer to connect emotionally and pick

out a treat size with ease.

To meet the demands created by the health craze, there are frozen yogurt chains that have been

expanding into the Tampa Bay area. Many have a do it yourself approach, where customers can

dispense their favorite flavors and toppings and then pay by weight.75 Competitors such as Yogurtology,

You Say When and Soobak Yogurt Bar have entered the Tampa Bay market and created a healthy and

fun option for consumers that want to indulge with fewer calories. Cold Stone didnt always meet the

needs of consumers who wanted a healthy option, but they have added healthier substitutes to its

menu. Some of the Healthy menu items are, low calorie smoothies, no sugar added ice cream and an

assortment of healthier mix-ins. 76 Cold Stone has met the demands of consumers who want convenient

and quick payment options. At all stores accept cash, credit and debit cards and Cold Stone gift cards.

75 27 Sept. 2010. .

76 27 Sept. 2010. .


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When

Cold Stone Creamery understands that the economic downturn has created drops in sales. People had

to give up luxuries and indulgences that included fancy dinners and vacations. Even in tough economic

conditions, people still need a getaway and time to spend with their family.77 Cold Stone encouraged

people to try new products while interacting with their family at Cold Stone stores. Indulging in a Cold

Stone experience was one way families could take a mini vacation without serious costs.

The Cold Stone on Fowler Ave in Tampa typically has three rushes during a typical business day. The

first rush is when the store opens and consists mostly of professionals on their lunch break, who come in

for ice cream after their lunch. During the afternoon Cold Stone gets a second rush of parents who bring

their children for ice cream after school. The third rush is before closing, and consists mostly of college

students. At this particular location weekends are the busiest days, as well as Mondays because of

student discounts. At this location, there is very little difference in seasonal sales because Florida

weather is pretty consistent throughout the year. Although the difference is small, it is worth noting

that even in Florida; sales during winter months are slightly lower than other times of the year.

Cold Stone creamery has consistently held promotions and special sales for consumers. Being part of

the community is very important to Cold Stone, and it gives back in multiple ways each year. It gets

involved with school fundraisers, charitable organizations and supports the Make-A-Wish foundation.

Cold Stone Creamery dedicates the entire month of September to raising money for the Make-A-Wish

foundation, which helps grant wishes for severely ill children.78 This year Cold Stone was a part of

Kates wish which was to create an exclusive ice cream mix for Cold Stone. On September 30, 2010,

they held the 9thAnnual Worlds Largest Ice Cream Social, where it gave away free samples of Kates

Creation.79 Cold Stone also gets involved with customers on Facebook. On a regular basis, Cold Stone

updates its status, responds to customers, answers questions, and posts information about particular

stores.80

77 29 Sep 2010

7829 Sep 2010.

79Cold Stone Creamery. 29 Sep 2010.

80Facebook. September 29, 2010.


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Why Non Customers

Unique creations and treats at Cold Stone are delicious, but come with a price. The price of a Cold Stone

creation is usually higher than other ice cream shops and is significantly higher than ice cream at a

grocery store. Cold Stone successfully captures customers with a higher level of disposable income but

does not meet the needs of those on a tighter budget. Those on a strict budget have less disposable

income and cannot justify spending over $4.00 on a single ice cream treat.

Cold Stone is not only expensive, but also high calories. In most cases, it is not favored by those who are

trying to keep a healthy diet. At the request of its customers, Cold Stone introduced a line of Healthy

Creations. Even with these options, most consumers who live healthier lifestyles probably steer away

from Cold Stone. This could be because they are trying to resist a temptation to choose a high calorie

treat, or they simply not aware of the healthier options available.


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Where

Cold Stone creations are only sold at franchised locations. In the Tampa Bay area, consumers can visit

anyone of the fifteen prime locations.81 Locations are most likely found in strip malls, near movie

theaters and in other heavily trafficked locations. Regardless of the

surrounding, store locations are always densely populated. Cold Stone

has expanded internationally and has introduced stores in ten

countries: Japan, South Korea, Taiwan, China, Indonesia, Mexico,

U.A.E., Bahrain, Qatar, and Denmark.82 Cold Stone has a plan to

become the biggest ice cream store in the world and have been

working diligently to expand globally and remain a market leader.

Cold Stone has the capabilities cater events, both large and small. Since Cold Stone Creameries are

franchisees, each owner has his/her own policy with regards to catering. Cold Stone is able to bring its

potable store to almost any location. For most events consumers are able to place orders directly over

the phone.83

Most consumers love convenience and now they can have personalized creations delivered to their

homes in Tampa. Tampaeatz.com lets consumers order from over 30

different restaurants including Cold Stone Creamery. Orders can be

easily placed online or by calling 813-253-EATZ.

81http://www.coldstonecreamery.com/google/stores/store_locator.aspx

82http://www.coldstonecreamery.com/franchises/international.html

83http://www.coldstonecreamery.com/about/company_faq.html#Store__locations
http://www.coldstonecreamery.com/google/stores/store_locator.aspxhttp://www.coldstonecreamery.com/google/stores/store_locator.aspxhttp://www.coldstonecreamery.com/google/stores/store_locator.aspxhttp://www.coldstonecreamery.com/franchises/international.htmlhttp://www.coldstonecreamery.com/franchises/international.htmlhttp://www.coldstonecreamery.com/franchises/international.htmlhttp://www.coldstonecreamery.com/about/company_faq.html#Store__locationshttp://www.coldstonecreamery.com/about/company_faq.html#Store__locationshttp://www.coldstonecreamery.com/about/company_faq.html#Store__locationshttp://www.coldstonecreamery.com/about/company_faq.html#Store__locationshttp://www.coldstonecreamery.com/franchises/international.htmlhttp://www.coldstonecreamery.com/google/stores/store_locator.aspx


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Analysis of the Internal EnvironmentMarketing strategiesTarget Market

Cold Stones target market consists of consumers that like to indulge in super premium ice cream.

These consumers are looking for more than just ice cream; they are looking to have an experience. Cold

Stone has higher prices than other ice cream shops, but its target market is willing to pay, to get exactly

what they want. Cold Stone offers personalized service to each customer, allowing them to create their

own treat, and leaves them wanting to come back for more. According to the Cold Stone website, each

franchised location should be in a high traffic area with at least 10,000 people in a one mile radius.

Additionally, it recommends that Cold Stones are put in strip malls, near movie theaters, or near other

restaurants. Most ice cream is bought on impulse, which is why these heavily trafficked areas work

best. According to a store owner in FL, his target market consists of adults who come in alone or inpairs. He also said adults tend to bring kids on the weekend, but that they almost always order

something for themselves too. In general, its target market is very similar to Starbucks, consumers who

are willing to pay a little extra to indulge in a small treat.

Image

Cold Stone was started by Donald and Susan Sutherland after they realized that the world did not have a

perfect ice cream. In 1988 they went on a quest to change the world, redefine ice cream, and opened

their first store in Tempe, Arizona. 84 Cold Stone positions itself to be the worlds best ice cream and

considers it to be in a class of its own. Cold Stone makes its ice cream daily, in each store, from the

freshest ingredients. Using only the finest ingredients means its products are considered to be super

premium. The Cold Stone image is something much bigger than just ice cream; it is a place that leaves

people happy and wanting to come back for more. It is where people can come and indulge, have fun,

and relax.

84The Cold Stone Storywww.coldstone.comOctober 13, 2010
http://www.coldstone.com/http://www.coldstone.com/http://www.coldstone.com/http://www.coldstone.com/


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Marketing ProgramsAdvertising

Cold Stone Creamery uses several different marketing programs to

increase consumer awareness and build relationships with ice cream

lovers worldwide. Through advertising, Cold Stone hopes to reach more

consumers and provide them with the ultimate ice cream experience.

Over the holidays in 2009, Cold Stone launched a mobile coupon

program where cable networks ran commercials asking viewers to text

CREAM to the number provided. Viewers that sent the text message

received a mobile coupon good for one free love-it size creation, when an additional treat is

purchased. The goal of the program was to get consumers inside the stores and ultimately drive sales.

The promotion targeted families, which allowed people of all ages to take advantage of the coupon, as

long as they had a mobile phone.85 The mobile coupon also appealed to, green-minded individuals

who favor paperless options for coupons. It created more foot traffic in the stores and got consumers

excited because they were being given something free. This was the first time Cold stone used mobile

marketing and the promotion was considered a success.

In 2007 Cold Stone Creamery released the LOVE IT LOVE IT campaign which tests consumers devotion

to their ice cream. The goal of the campaign was to capture the publics love for ice cream and position

Cold Stone as the number one place in the world to eat ice cream. The campaign dramatizes the

consumers journey to a Cold Stone Creamery, and then creates obstacles that our put in their path,

thus testing their desire for ice cream. The advertisements were meant to be dramatic, humorous and

mysterious, they were supposed to draw consumers in and leave them wanting to know more. Each

advertisement was its own story that displayed a struggle about how far one will go to get something

they really want.86 This was Cold Stones first integrated advertising campaign and they used television,

online, radio, and a LOVE IT LOVE IT micro site . In the end, the campaign had mixed results on

whether it was successful or not. People can stay engaged with the LOVE IT LOVE IT campaign by

going to loveit-loveit.com, where they will find an archive of advertisements, characters and bloopers.

85http://www.mobilemarketer.com/cms/news/commerce/2617.html(October 12, 2010)

86http://findarticles.com/p/articles/mi_m0EIN/is_2007_May_22/ai_n19155014/(October 12, 2010)
http://www.mobilemarketer.com/cms/news/commerce/2617.htmlhttp://www.mobilemarketer.com/cms/news/commerce/2617.htmlhttp://www.mobilemarketer.com/cms/news/commerce/2617.htmlhttp://findarticles.com/p/articles/mi_m0EIN/is_2007_May_22/ai_n19155014/http://findarticles.com/p/articles/mi_m0EIN/is_2007_May_22/ai_n19155014/http://findarticles.com/p/articles/mi_m0EIN/is_2007_May_22/ai_n19155014/http://findarticles.com/p/articles/mi_m0EIN/is_2007_May_22/ai_n19155014/http://www.mobilemarketer.com/cms/news/commerce/2617.html


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On July 7, 2010, Cold Stone teamed up with First

Data Corporation to offer a new gifting application

through Facebook. "Thanks to social networking

sites, texting and the growing abundance of web-

enabled mobile devices, the way people interact as

well as give and receive gifts is changing," said Dom

Morea, First Data division manager of Mobile

Commerce Solutions.87 Loyal Cold Stone fans can

now quickly and easily send a tangible gift (ice

cream Creations, shakes) to a friend or loved one's

Facebook account or e-mail address. Consumers can access the eGift social application through Cold

Stone's Facebook page or website and select one or multiple friends to send gifts to, by either by adding

them from Facebook or entering their e-mail address. The sender can then select which product they

would like to send their friend and can add a personal message. The sender of the eGift is able to then

proceed through the secure checkout process. After the sender checks out the recipient receives a

Facebook message, e-mail or both alerting them that they received a gift. Included in the message are

the account number and redemption instructions. The recipient can redeem the eGift item at any

participating Cold Stone location.88 Cold Stone loves to make people happy and this gives people an

opportunity to share a Cold Stone moment even if they cannot be together.

Product and Service Offering

Cold Stone Creamery has something for everyone with over 11.5 million possible

creations.89 The signature flavors are: Cake Batter, Chocolate, Coffee, Mint,

Strawberry, Cheese Cake, French Vanilla, Sweet Cream, and Sinless Sans Fat. In

addition to the signature flavors, stores offer local and season flavors such

as Cinnamon Bun, Pumpkin, Amaretto and candy cane. Cold Stone offers customers a wide

variety of mix-ins for their creations that include candy, fruit, nuts, cakes and cookies. For

consumers that prefer something other than scooped ice cream, Cold Stone has ice-cream

cakes, ice cream cookie sandwiches, smoothies, shakes, and iced and blended coffees.

87http://www.retailcustomerexperience.com/article/127182/Cold-Stone-Creamery-debuts-social-e-gifting-program (October 12, 2010)

88http://www.retailcustomerexperience.com/article/127182/Cold-Stone-Creamery-debuts-social-e-gifting-program

89http://www.coldstonecreamery.com/icecream/about_our_ice_cream.html (October 13, 2010)
http://apps.facebook.com/egiftsocial/?url=basichttp://apps.facebook.com/egiftsocial/?url=basichttp://apps.facebook.com/egiftsocial/?url=basic


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Distribution and Channel Programs

Cold Stone Creamery has 1,400 franchised stores with 194 in Canada and other foreign countries. Cold

Stone is expanding globally, and is constantly looking to work with people that share its passion for ice

cream. Cold Stone franchise owners use in-store, online, and direct marketing channels.

Pricing

Prices at Cold Stone vary by size, item and by store. Cold Stone sells its ice creams in 3 different sizes:

Like it (5 oz), Love it (8 oz), and Gotta have it (12 oz). There is no set price per size because it depends

on the ice cream and mix-ins. The average price range for the three sizes is: Like it, $3.00 to $5.00;

Love it, $3.20 to $4.20; and Gotta have it, $4.00 to $5.50. Each ice cream order includes one

topping, such as fruit or candy, and then each additional topping or cone is 75 cents. Prices for

smoothies and shakes vary by size, and are respectively $2.69 to $4.29. Cold Stone serves coffee either

iced or blended in small, medium and large and are priced $2.69, $3.69, and $4.09 respectively. Cakes

can be made in small, medium and large and are generally priced $10.00, $19.95, and $25.95

respectively. Cold Stone provides premade pints to go for $6.49 or customers can make their own, with

up to three toppings, for $7.99.

Sales strategy and Sales force effectiveness

Cold stone has been unique and innovative in its different sales strategies. The most recent launch of its

eGift program has been very successful thus far. The eGifting idea was introduced to increase instore

revenue and drive franchisee profitability.90 Inside Network Inc., an industry research firm, states that

the U.S. market for virtual goods is currently estimated at $1.6 billion. Social networking sites account

for approximately half the total market for virtual goods, twice as much as one year ago. Unlike

traditional virtual gifting, Cold Stones eGift application is used to send tangible gifts that can be

redeemed in participating locations. The application was developed by ecommerce and payment

processing industryleader, First Data Corporation91

Marketing research /intelligence gathering efforts

Cold Stones aims to provide ice cream lovers the ultimate customer experience. To gain insight on its

efforts, there is a brief online survey available to the public. The survey has a very colorful scheme,

background music and a comical song to stay consistent with the Cold Stone brand and ensure a

90http://www.coldstonecreamery.com/assets/pdf/news/2010/pr_cold-stone-creamery_egift_070710.pdf

91http://www.coldstonecreamery.com/assets/pdf/news/2010/pr_cold-stone-creamery_egift_070710.pdf


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satisfying survey taking experience.92 Mystery shopping is also used to enforce excellent customer

service and satisfaction. Cold Stone wants to make sure that every customer receives exceptional

service and has an unforgettable experience. 93

Public relations/publicityCold stone creamery established created its own personal website which provides information that

dates back to 2003. Establishing this website early on, took them from being a localized ice cream shop

to a globally recognized ice cream powerhouse, which rivals organizations such as marble slab. Cold

stone participates in major food shows, all over the world, to create product awareness and provide

sampling. For the E! Entertainment network's 20th Birthday party, Cold Stone provided an exclusive

custom ice cream blend, "E! Entertain-mint.94 Cold stone also partners with the Make-A-Wish

Foundation to help grant wishes to terminally ill children. Most recently, Kate an 11-year-old with a

life-threatening condition, wished that cold stone would participate in the

Worlds Largest Ice Cream Social.95 Cold stone created an exclusive flavor for

Kate and on September 30th, from 5:00 to 8:00 PM, customers could receive Kates

creation free. This was definitely the worlds largest social and Kates wish came true!

92http://www.csc1.com/

93http://www.satisfactionservicesinc.com/corporateoverview.htm

94http://www.coldstonecreamery.com/about/press_room.html

95http://www.coldstonecreamery.com/assets/pdf/news/2010/news_make-a-wish_090110.pdf
http://www.coldstonecreamery.com/about/press_room.htmlhttp://www.coldstonecreamery.com/about/press_room.htmlhttp://www.coldstonecreamery.com/about/press_room.htmlhttp://www.coldstonecreamery.com/assets/pdf/news/2010/news_make-a-wish_090110.pdfhttp://www.coldstonecreamery.com/assets/pdf/news/2010/news_make-a-wish_090110.pdfhttp://www.coldstonecreamery.com/assets/pdf/news/2010/news_make-a-wish_090110.pdfhttp://www.coldstonecreamery.com/assets/pdf/news/2010/news_make-a-wish_090110.pdfhttp://www.coldstonecreamery.com/about/press_room.html


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Financial Performance

Cold Stone creamery is the fifth largest ice cream shop in the United States and was ranked number 35

in the Entrepreneurs 2010 Franchise 500.96 In 2008, its sales were about $430 million but have recently

experienced an increase in sales due to new and successful items such as, cup cakes and coffee. Cold

Stone is expecting the growth in sales to continue from recent co-branding efforts with Tim Hortons

INC.97 Cold Stone has been franchising stores since 1994 and currently has 1,400 franchised units,

including 194 in Canada and other foreign countries. Since 2008, this number of new stores opening has

dropped domestically, but has risen in foreign countries, including the 13 new stores opened that have

opened in Canada this year.98 Even with the domestic setbacks, Cold Stone is still considered to be one

of the fastest growing franchises.99 In order to open a franchise, a total investment from $292,525 to

$440,275 would be necessary. The potential owner would also have to be able to pay the $42,000

franchising fee, and meet the $125,000 cash liquidity requirement. Cold Stone is a private company and

does not provide sales or potential profits to interested franchisers.

96

"Entrepreneur." 2010 Franchise 500 Rankings. Entrepreneur Media, 2010. Web. 13 Oct 2010.97

Mintel Oxygen. Ice Cream Shop Analysis: Cold Stone Creamery. Mintel Group, 2010. Web. 13 Oct 2010.98

"Entrepreneur ." Cold Stone Creamery. Entrepreneur Media, 2010. Web. 13 Oct 2010.99

Mintel Oxygen. Ice Cream Shop Analysis: Cold Stone Creamery. Mintel Group, 2010. Web. 13 Oct 2010.


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Additional Company CharacteristicsTechnical Capabilities

Cold Stone has used many innovative technological resources to attract its customers. Customers can

interact with Cold Stone online by creating a My Cold Stone account, which allows the customer to have

a personalized space on the Cold Stone website. My Cold Stone account holders are eligible to receive

special offers and join the birthday club. Cold Stone uses the club and social networking as a cost

effective alternative to traditional advertising. Cold Stone does use any special gadgets to blend its

creations, but they do use state of the art ovens, refrigerators and freezers to provide the freshest treat

possible.

Available Resources

Cold Stone provides new franchise owners all the resources they need for success. The entire processes

of starting a new store, completing the necessary training and opening the doors for business takes

about a year. Not rushing this process ensures that the new owners will represent the Cold Stone brand

and exceed expectations. Each new owner is required to enroll at Cold Stone University, at the

headquarters in Scottsdale, AZ, for approximately eight weeks. Cold Stone University offers courses

where the new owners learn everything they need to know, including how to present the Cold Stone

experience to their future customers.100

Production Capacity

Cold Stone provides each customer with a unique experience and eachcreation is hand made in front of the customers eyes. Cold Stone does not

pride itself on producing a quick product, but instead on the consistence

and quality of its treats. Cold Stone customers do not expect quick service

and visit the store to have an experience and indulge in their favorite ice

cream creation. Cold Stone does have options for those with busy

schedules such as pre-made creations, cakes and pies. Every store is

different, but most have several tables located inside and outside the

store.

100Franchise overview www.coldstone.com October 13, 2010


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Career Opportunities

There are over fourteen hundred stores operating around the world that provide a variety of career

opportunities. A new Cold Stone can be opened almost anywhere, allowing some customers to own a

piece of their favorite treat if they qualify. The process of becoming an official owner of a Cold Stone

can take as little as three months. Each owner is followed while they secure a location, negotiate the

lease and finalize the location specifics. Each owner is sent to Cold Stone University, where they are

taught to live and exceed Cold Stones expectations.101 The entire process, including training, can take

up to a year to complete.

All Cold Stone locations have career opportunities on both large and small scales. Each store provides

full time, part time and management opportunities. Small scale jobs, like crew members, are great for

teenagers and are popular first jobs. A potential crew member is auditioned instead of having to go

through the typical interview process. Crew members prepare ice cream creations while providing the

ultimate customer experience. Crew members are enthusiastic, dedicated, team players and have

excellent customer service skills. On a larger scale Cold Stone provides opportunities at its corporate

headquarters in Scottsdale, Arizona. Corporate opportunities include web design, formulating

promotions and creative concepts, and testing, finance, accounting, managing, training, customer

service and supply.102

101"Cold Stone Creamery Franchise - Facts on Ownership." Cold Stone Creamery - The Ultimate Ice Cream Experience. Web. 12 Oct. 2010.

.102"Cold Stone Creamery - Steps to Becoming a Franchisee." Cold Stone Creamery - The Ultimate Ice Cream Experience. Web. 12 Oct. 2010..


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SWOT AnalysisStrengths

Statement of

Internal Strengths

Company Performance Importance Strengt

h Index

Number1=Minor 2 3 4 5=Major 1=Low 2 3 4 5=High

1. Growth X X 20

2. Store locations X X 20

3. Cold Stone

Creamery

Customer

experience

X X 25

4. Premium

ingredientsX X 25

5. Advertising

campaignX X 12

6. Product offerings X X 20

7. Marketing

researchX X 15

8. Public relations X X 16

9. Financial success X X 20

10.Consistency &

qualityX X 16

11.Website quality X X 12

12.Facebook page X X 12

13.Co-branding X X 15

1. Cold Stone Creamery is a market leader and ranked third in a 2008 list for growth of United States ice

cream chains. There are 15 locations in the Tampa Bay Metropolitan area.

2. Locations are most commonly found in strip malls, near movie theaters and in other heavily

populated and trafficked areas.

3. Consumers in target market are looking for more than just ice cream; Cold Stone Creamery provides

and outstanding customer experience that can be compared to Starbucks.

4. Cold Stone only uses the finest super-premium ingredients to make its ice cream fresh daily.

5. Cold Stone Creamery teamed up with First Data Corporation to offer a new gifting application that is

available through Facebook.


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6. With over 11.5 million possible ice cream creations and additional menu items, Cold Stone has

something for everyone.

7. Cold Stone offers a brief online survey available that is open to the public. Mystery shopping is a

strategy that Cold Stone uses to enforce excellent customer service and ensure superior customer

satisfaction.

8. All Cold stone press releases can be found on its website and is archived back to 2001. The company

makes community service and working with charities a priority.

9. Cold Stone is the fifth largest ice cream shop in the United States and sales have recently increased

from new menu items and its co-branding efforts.

10.Cold Stone Creamery provides a consistent customer experience and quality treats to consumers.

11.An interactive website where a consumer can create a My Cold Stone account which is a personalized

space on the Cold Stone website. The website lists anything anyone would want to know about Cold

Stone, except for financial performance because it is a private company.

12.Cold Stone utilizes Facebook and engages its customers by posting promotions, contests and fun

facts on its page.

13.Recently, Cold Stone decided to begin co-branding which will provide more options for its customers

and capture a bigger target market.


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Weaknesses

Statement of

Internal

Weaknesses

Company Performance Importance Strength

Index


1. Price X X X 25

2. Waiting Time X X 20

3. Franchisee

TrainingX X 6

4. Limited

Expansion in

the Saturated

Market

X X 9

5. VolumeLimited to

Employees

X X 12

6. Large portion

sizesX X 12

1. Consumer confidence is at an all time low and customers are turned away from Cold Stones high

priced creations.

2. Each Cold Stone creation is made especially to the customers satisfaction, which can lead to long

wait times for customers.

3. The intense franchisee training can take over a year to complete which can turn away potential

investors.

4. Cold Stone offers a product in an extremely saturated luxury good market leading to limited future

expansion possibilities.

5. Cold Stone offers a product in an extremely saturated luxury good market leading to limited future

expansion possibilities

6. Customers are watching their portion sizes, and Cold Stone offers generous servings.


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Opportunities

Statement of

External

Opportunities

Activeness Success probability Opportunity

Index


1. The Hispanic

marketX X 25

2. University of

South FloridaX X 25

3. Health

conscious

consumers

X X 15

4. Smaller ice

cream shops

are going out of

business

X X 6

5. Consumers that

eat organicX X 12

6. Tampaeatz.com X X 16

1. As stated in our internal analysis, the Hispanic market in Tampa Bay area is rapidly growing and

would be an excellent opportunity for market growth

2. University of South Florida- Placing a store on the University of South Florida campus could be very

profitable and/or have USF partner with the off campus Cold Stone nearby.

3. Cold Stone should consider creating new flavors with nutrition content that would appeal to health

conscious consumers. This is a trend that is not fading in America.

4. Smaller ice cream shops that have to close because of the economy, will give Cold Stone an

opportunity to open new stores in the area to gain additional market share.

5. The percentage of consumers that eat organically is increasing. Creating organic flavors would meet

the needs of these potential customers.

6. TampaEatz.com allows consumers to conveniently place an Cold Stone ice cream order online and

get it delivered to their home within one hour.


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Threats

Statement of

External Threats

Likelihood of Occurrence Seriousness Index


1. Bad Economy X X 25

2. Competition X X 15

3. Health

Conscious

Movement

X X 9

4. Credit Crunch X X 25

5. Lacking

ResourcesX X 12

1. The United States is in a recession and the economy has only grown 1.6% this year. Unemployment

rates are at an all time high, especially in Florida. People have less disposable income to spend

which could cause them not to go out for ice cream.

2. There are many competitors in the frozen dessert industry that offer similar products such as,

Marble Slab Creamery and Ben and Jerrys.

3. Healthy lifestyles are becoming increasingly popular in the United States. About 38.7% of adults

watch their diet and would probably prefer to eat healthier deserts.

4. It is becoming more difficult to obtain a personal or small business loan because banks are scared to

lend money due to increases in defaults.

5.

It is possible that a Fat Tax will be applied to foods high in sugar content, which could affect the

production and cost of the ice cream.


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Marketing Goals and ObjectivesGoals

Implement new marketing strategies to increase customer awareness throughout Tampa Bay.

Develop Marketing techniques to better target the Hispanic community in Tampa Bay.

Open Cold Stones in areas throughout Tampa Bay that could be profitable for a Cold Stone

Creamery.

Add additional menu items and/or flavors that cater towards a health conscious consumers.

Continue to grow as a franchise in the global market and throughout the United States.

Maintain the current ranking as one of the fastest growing franchises.

Increase website interaction atwww.ColdStoneCreamery.com

Increase the protection of copyrighted and trademarked property of Cold Stone Creamery to

sustain the super-pre

cold stone project

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