mark 3339 final project_final

Marketing Strategy PlanTeam 7

for Blue Bell Creameries

Marketing Strategy MARK3339

As Prepared by: Robert FloresLuke Shaver

Oluwapelumi BodundeQuynh Ho

Barbara Olivera

Copyright © 2016 Team 7All Rights Reserved

Dr. John KaronikaUniversity of Houston

Spring 2016

Copyright 2016 Team 07 Spring 2016. All Rights Reserved.

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Executive Summary

A. Purpose and Scope

The Blue Bell Creameries Marketing Strategy Plan blends research and

solutions into comprehensive report, guiding us through in-depth analysis

needed to create expansion forecasting 3 years ahead. This plan provides

desired outcomes, preferred marketing mixes and steps to execute a

tactical action plan. Furthermore, into how to make the marketing gears

mesh, evaluate progress, and oversee success. Financial information,

budgets, and research sources wrap up the plan.

B. Current Situation

Blue Bell is a frozen dairy product and ice cream manufacturer. They

control every aspect of their business. Our target market sits around $5B

dollars. Blue Bell captures 11% of market share. The ice cream

manufacturing market is in its mature stages. Environment is stable and

competition is well established.

C. Key Aspects of the Marketing Strategy Plan

We adopt an improve position strategy by a growing marketing budget.

Projected market share is to grow 2% a year from 11% to 17% and profit

shall grow 35% by 2017. Expected Sales climb from $568M to $855M with

Gross Margin expanding $173M to $261M. Net Marketing Contribution is

$165M forecasted to grow to $244M. Net Profit is $25M increasing to

$38M by 2017.


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Table of Contents

Executive Summary 2

Table of Contents 3

Introduction 5

I. Environmental Analysis 7

A. External Analysis 7

B. Internal Resources Analysis 15

II. SWOT Analysis 21

A. Summary of Key Strengths and Weaknesses 21

B. Summary of Key Opportunities and Threats 24

C. Key Performance Issues 27

III. Portfolio Analysis & Strategic Market Plan 28

A. Portfolio analysis 28

B. Strategic Market Plan 31

C. Business performance 33

IV. Marketing Objectives 35

A. Product Line 35

B. Target Market 36

C. Positioning Strategy Statements & Value Proposition 36

D. Goals and Objectives (Sales Volume, Market Share, Net Marketing, Profit,

etc.) 37


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V. Marketing Mix Strategy 40

A. Marketing Strategy Alternatives 40

B. Marketing Strategy and Positioning 40

VI. Tactical Action Plans 43

VII. Implementation, Evaluation and Control 44

A. Performance Measures 44

B. Monitoring and Evaluation Procedures 44

VIII. Financial Projections 46

A. Financial Projections 46

B. Marketing Expenses Budget 47

IX. References 49


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Introduction

We chose this company because Blue Bell offers delicious ice cream that at the

same time is facing the challenge of overcoming the listeria outbreak in the past year.

This pause in productivity and seemingly public relations nightmare pushed us to take

interest in Blue Bell. This paper will discuss our team’s research into the company and

offer our provided solutions to the company in regards to how to become harder, better,

faster, and stronger in the marketplace for ice cream sales.

Blue Bell grinded to develop from its humble beginnings in Texas to get to where

it is today. As the company maintains control over manufacture and supply chain of its

products, they are not expanding as they once were.

Blue Bell in recent history is facing challenges because for a year they were out

of production. After the listeria outbreak, many employees have been laid off, and the

company struggled to get back on-line. Still to this day, their production ramp-up is not

complete and many product variations are not purchasable. As time goes on, they push

to regain strength and earn back the trust of their former consumers.

Team Seven consists of five members: Oluwapelumi Bodunde, Robert Carlos

Flores, Barbara Olivera, Quynh Ho and Luke Shaver. Oluwapelumi, or Mary for short,

contributed to our Introduction and marketing mix. Robert focused on developing a solid

Strength-Weakness-Opportunity-Threat analysis and the portfolio analysis & strategic

market plan. Barbara and Quynh created our Environmental Analysis. Also Barbara

created the tactical action plans and the implementation, evaluation and control. Quynh

created the Marketing objectives. Luke developed the Key Performance Issues and the


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Financial projections. We all worked together to create this marketing strategy plan for

our company Blue Bell.


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I. Environmental Analysis

A. External Analysis (Opportunities and Threats)

1. Marketing Strategy:

Blue Bell ranks as one of the top three, best-selling ice creams nationwide

despite the company's products being available in about 26% of US supermarkets.

Even though the company keeps a roster of creative flavor combinations, its

Homemade Vanilla is its top selling flavor (Vault, 2016). While some competitors have

slimmed down the size of their ice cream containers to maintain profit margins, Blue Bell

asserts that its ice cream will retain its true half-gallon size. And to keep its customers

coming back for favorite flavors while trying new ones each year, the creamery boasts

an active product development group that churns out new flavors, such as its Rocky

Mountain Road. (Hoover,2016)

The goal of this plan is to set clear objectives that can be achieved within a year.

Increasing market share, sales, social media presence and brand awareness are

necessary steps to follow.

1) Industry Analysis

a. Market Potential and Market Demand

The company is among the top sellers of ice cream nationwide, with 2003 sales

of $400 million, while its products are distributed only in 15 states. Based in Brenham,

about 70 miles northwest of Houston, Blue Bell claims it is the nation's No. 3 best-selling

ice cream brand behind Oakland, Calif.-based Dreyer's with $1.2 billion in sales in 2003

and Green Bay, Wisc.-based Breyers with $660 million (Bizjournals,2005).


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b. Served Market

In 1989, Blue Bell began selling its ice cream in Oklahoma, and throughout the

1990s expansion pushed throughout the South Central and Southern United States,

eventually expanding out to New Orleans and Jackson, Mississippi. In all, Blue

Bell products are available in 23 US states, including Alabama, Arizona, Arkansas,

Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri,

Nevada, New Mexico, the Carolinas, Oklahoma, Tennessee, Texas, Virginia, and

Wyoming (Hoover,2016). It maintains nearly 60 distribution facilities throughout the US.

Blue Bell ranks as one of the top three, best-selling ice creams nationwide despite the

company's products being available in about 26% of US supermarkets (Vault, 2016).

c. Market Share

Blue Bell is already working on expanding product sales to close states it thrives

in. In 2012 the ice cream maker expanded into Research Triangle region of North

Carolina, after entering Charlotte eight years prior. In 2011 Blue Bell entered Colorado

and the South Florida market. The ice cream maker also built office and cold storage

facilities in Tampa, Florida, and a distribution warehouse near Nashville, Tennessee, to

support deliveries directly to foodservice operators and grocers in those areas. This

gives the company the opportunity to increase sales, brand awareness, and brand

loyalty in other states. This all leads to Blue Bell becoming first in ice cream market

share (Bluebell, 2016).

The statistic depicts the market share of the leading ice cream vendors in the

United States in 2015, based on sales. In that year, Blue Bell Creameries hold a market

share of 11.3 percent in the United States, based on sales of 570 million U.S. dollars.


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https://en.wikipedia.org/wiki/Jackson,_Mississippi

https://en.wikipedia.org/wiki/New_Orleans

https://en.wikipedia.org/wiki/United_States

https://en.wikipedia.org/wiki/Southern_United_States

https://en.wikipedia.org/wiki/South_Central_United_States

https://en.wikipedia.org/wiki/Oklahoma

The company owns the popular ice cream brand Blue Bell. Chocolate, vanilla and

cookie dough/cookies and cream were among the leading ice cream flavors in the

United States in 2013. The company's 70 flavors are big in Texas, holding a 61 percent

market share in Houston, and a 63 percent share in Dallas/Fort Worth, according to

company marketing materials. It has manufacturing plants in Oklahoma and Alabama

(Hoover,2016).

d. Market Environmental

Blue Bell produces can only be found in a small portion of the country, which is

why we still think of ourselves as a little creamery. However, due to high quality

products and loyal consumers, Blue Bell is the number three ice cream brand in the

United State. In all, Blue Bell products are available in 23 US states, including Alabama,

Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana,

Mississippi, Missouri, Nevada, New Mexico, the Carolinas, Oklahoma, Tennessee,

Texas, Virginia, and Wyoming (Bluebell, n.d.)


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Industry/Market Analysis of Opportunities and Threats

OpportunitiesProbability Impact Timing

Expanding product sales to close states. 0.5 H N

Products are available in 23 US states 1.0 H N

Ranks as one of the top three, best-selling ice creams

nationwide0.5 M N

Threats Probability Impact Timing

Many competitors in market (Share the same target

audience as Blue Bell)1.0 H N

No social media presence. 0 C M

Competitors with similar products. 0.5 M N

Share the same target audience as Blue Bell 1.0 H N

1. Probability is likelihood that the event or condition will occur.

Scale: 0 to 1.0 1.0 = 100%

2. Impact is the eventual impact on the business. Scale: C, H, M. & L

C = crisis, H = high, M = moderate, L = low

3. Timing is when the issue or condition will likely occur.

Scale: N, M. & L.N = near-term (during the plan year), M = medium-term (no sooner than 2 years), L = long-term (no sooner than 5 years).


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2. Customer Analysis

a. Customers

I. Served Market

Everyone (included Children & Adults)

Families

II. Customers

Our largest customers will be Adults with children of various ages have high

indexes and are more likely to eat Blue Bell Ice Cream across the board. Homemakers,

or possibly stay-at-home moms, are 29% more likely to eat Blue Bell Ice Cream, and

adults who are married are 11% more likely to eat Blue Bell. Adults with 5 or more

people in the household are 15% more likely to eat Blue Bell (Alyssa Bordelon, 2016).


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Customer Analysis of Opportunities and Threats

Opportunities Probability Impact Timing

The third largest ice cream maker (250 products and 45

flavors available across the South)1.0 H N

Blue Bell retains its true half-gallon size 1.0 H N


Many competitors in the market (Customers get more

choose)1.0 H N

Consumers are increasingly health conscious. 1.0 H N


Scale: 0 to 1.0 1.0 = 100%






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3. Competitive Analysis

a) Competitor Identification

Breyers: Top brand ice cream in the US.

Haagen-Dazs: available in 80 countries worldwide.

Dreyer’s/Edys’: distribution reaches 70% of US household.

b) Competitors' Advantage (Cost-Differentiation-Marketing)

The top-rated ice creams are really high in fat. But there very good ones that

have about half the fat and are also lower in price. Those are Breyers, Great Value,

Baskin-Robbins, Nice, Tillamook, Blue Bell, Turkey Hill, Dreyer’s/Edy’s, Friendly’s, and

Blue Bunny (Ashley Reynolds, 2014).

c) Key Competitors Market Position & Trends

Our major competitor, Breyers, surpasses Blue Bell’s market share by 4.9%. Our

goal is to dominate our target market in the South to ultimately increase our market

share by 5% and become the number one ice cream brand in the United States. By

implementing multiple new advertising platforms, we plan to further reach our target

audience and increase sales among homemakers and adults with families by up to

20%. (Hoover,2016)


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Competitive Analysis of Opportunities and Threats


Appeal to the health oriented market with their less fattening

“frozen dairy desserts”0.5 M M

Product differentiation to appeal to larger segment 1.0 H N


Reduced their half gallon size twice 0.5 H N

Many competitors in the market 0.5 H N


Scale: 0 to 1.0 1.0 = 100%






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B. Internal Resource Analysis

1. Marketing and Distribution

a. Competitive Structure and Market Share

With the frozen dairy market dominated by four companies

that constantly stand out in both sales numbers, popularity,

and now seeking how to expand to newer levels.

Our points of entry will include expansion of retail (mostly

through grocery and convenience stores our product has not

reached yet), and expansion of specialty retail (mostly at

special quantities for university retail stores and shopping

malls).

b. Advertising and Promotion Skills

Our company would focus its resources into creating new

way to promote our product when moving into new

territories. The primary way in, which we plan to expand

advertisement of our company into new territory, will be

mostly word-of-mouth and ads inside grocery stores.

c. Effective Channels of Distribution and Geographic Coverage

In order to expand into other states, mostly to the north of

the United States, our company would have to open two

more manufacturing facilities, preferably in South Dakota


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and Minnesota in order to satisfy the demand of the product

in this region of the country.

2. Research and Development/Engineering/Manufacturing

a. Well-equipped Laboratories and Test Facilities

Our company, even after the Listeria outbreak in 2015, has

demonstrated it is up to date with its testing facilities and

safety/sanitary conditions. After the outbreak in 2015, Blue

Bell demonstrated it is capable of controlling this type of

problems when they become present, both by completely

controlling the situation sanitarily and socially.

b. Efficient and Effective Procedures: Design, Scheduling and

Quality control

As mentioned before, after our company was struck with the

outbreak of Listeria in one of its manufacturing facilities, we

were able to demonstrate our quality control and design

structure is up to date to control any type of problem that can

become present in the manufacturing process.

3. Corporate Resources and Personnel

a. Corporate Image and Prestige

Being one of the major frozen dairy product producers in the

United States, our company maintains its place in the


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corporate world being in the top five biggest frozen dairy

products.

With annual sales of our company being estimated at around

$582.70M, Blue Bell Creameries is at the top five biggest

companies that dedicates to the production of this product,

and possibly the number one company that relies 100% of

its revenue just in the frozen dairy market. (Hoover’s, 2016)

b. Loyalty of Customers

There are a few times in the history of companies in which

loyalty of customers is actually tested, and in 2015 Blue Bell

Creameries had its first recall in 108 years of history.

After the first recall even in 2015, our company came back to

its prestigious position in the market due to the loyalty of our

customers and their trust in the quality of the ice cream.

Customers loyalty alone demonstrates the fact that

expansion is completely possible and achievable, and it can

even produce more loyal customers after advertisement for

expansion is put in effect.

4. Finance

a. Access to Capital

With an estimated net worth of $1.66 billion, and estimated

annual sales of $582.70M; being active in less than half of

the states in the United States, our company would


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obviously benefit from the expansion from 23 to possibly the

whole country. (Hoover’s, 2016)

Being able to expand would lead our company to the top of

not only the biggest frozen dairy product producers in the

United States, but one of the leading and biggest

companies in the northern hemisphere, and would also

expand the net worth and annual sales of the company.

b. Total Financial Resources and Strength

Expansion of Blue Bell would obviously use up a

considerable amount of revenue, but with the correct

expansion plan and taking the right decisions will make the

transition to new states in the country smooth, and will give

the company new horizons to cross.

5. Primary Competitive Advantage

With the expansion in the Blue Bell Creameries, there are a

considerable amount of advantages over changing

distribution from 23 states into the whole United States.

Our company would be able to expand its net worth greatly

without the need of using more advertising and production

resources.

Our company is already adding and removing more flavors

every day, which boosts popularity in the existing

distributing states.


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Competitive Analysis Summary


Brand Awareness in Active Markets 0.9 M N

Social Media Presence 1.0 H N

Customer Loyalty 0.9 M N


Listeria Outbreak Damage to Market Position 1.0 C M

Competitive Market 0.25 H N

Health Conscious Consumers 0.75 H N

1. Probability is likelihood that the event or

condition will occur.

Scale: 0 to 1.0

1.0 = 100%

2. Impact is the eventual impact on the

business.

Scale: C, H, M. & L


3. Timing is when the issue or condition

will likely occur.

Scale: N, M. & L.

N = near-term (during the plan year),

M = medium-term (no sooner than 2

years), L = long-term (no sooner than

5 years).


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Internal Resources Analysis Summary

Strengths Ranking Trend

Quality in the Production of their Product D I

Supporting Resources A D

Family Owned Business Relatable to Customers D N

Established Brand Recognition A D

Weakness Ranking Trend

Tarnished Reputation – Listeria A D

Very Minimal Advertising to Promote Product D N

Product Availability Limited to Twenty-Three States D N

1. Ranking is a measure of the magnitude of a

strength or

weakness.

Scale: D, A, & I. D = dominant, A = average, I

= insignificant.

2. Trend is an indication of the direction of

change of the

strength or weakness.

Scale: I, N, & D. I = increasing, N = no

change,

D = decreasing.


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II. SWOT Analysis

Summary of Key Opportunities and Threats


Supporting Local Businesses 1.0 H L

Expanding product sales to close states. 1.0 H N

Products are available in 23 US states 1.0 H N

Ranks as one of the top three, best-selling ice creams

nationwide1.0 H N

The third largest ice cream maker (250 products and 45

flavors available across the South)1.0 H N

Blue Bell retains its true half-gallon size. 1.0 H N

Product differentiation to appeal to larger segment 1.0 H N

Appeal to the health oriented market with their less

fattening “frozen dairy desserts” 1.0 M M


Listeria Disease 1.0 H N

Many competitors in market (Share the same target

audience as Blue Bell)1.0 H N

No social media presence. 0 C M

Many competitors in the market (Customers have more 1.0 H N


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options)

Consumers are increasingly health conscious. 1.0 H N

Reduced their half gallon size twice 1.0 H N

1. Probability is likelihood that the event or condition will occur. Scale: 0 to 1.0

1.0 = 100%

2. Impact is the eventual impact on the business. Scale: C, H, M. & LC = crisis, H = high, M = moderate, L = low

3. Timing is when the issue or condition will likely occur. Scale: N, M. & L. N = near-term (during the plan year), M = medium-term (no sooner than 2 years), L = long-term (no sooner than 5 years).

Blue Bell does a great job of exploiting the concept of supporting your local

businesses. People always feel more comfortable buying and supporting the local

businesses within their own community. Blue Bell does so much for fundraisers, and

donates millions of dollars a year to their hometown in Brenham. Anything from

hospitals to sporting complexes, Blue Bell has helped build their reputation by donating

millions of dollars. (Industry/Market Analysis Table) When opportunities to give back to

the community like this present themselves, it is just another way to really ensure that

your customers will be loyal lifelong customers. They were faced with the opportunity to

respectfully recall all the products; now they're faced with the opportunity of finding and

securing the source of the problem, and training their employees with the new

procedures to avoid this matter. If they waited until the FDA made them recall the

products it would have cost twice as much money in the long run, but because they did


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this on their own the could have possibly saved the company as a whole.

(Environmental Analysis)

After all the latest news about Blue Bell creameries, it is safe to say that the

biggest threat currently is their products containing the listeria disease. This does not

assign this factor as a weakness, because this is in fact a threat. Because of the listeria

disease Blue Bell’s sales have completely stopped, and they are spending countless

dollars fixing the problem. (Customer Analysis Table) Other threats that all companies

face, are the threats from other companies ironically. When I say threats from another

company I mean friendly competition of course. Blue Bell will always have competitors

in the ice cream market threatening them with their ice cream. The battle for customers

and their customer loyalty is huge, but then that's when it comes down to the quality of

the product. People expect great quality ice cream from such a name brand product like

Blue Bell. (Competitive Analysis Table)


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Summary of Key Strengths and Weaknesses

Strengths Ranking Trend

Quality in the production of their product D I

Supporting Resources A D

Family owned business relatable to its consumers D N

Established brand recognition through decades of business A D

Creating new flavors while still maintaining signature flavors D I

Keeping things fresh by updating options for consumers D N

Large 64oz. Containers D N

Weakness Ranking Trend

Tarnished Reputation as a result of 2015 recall A D

Very minimal use of advertising to promote product D N

Product availability limited to 23 states only D N

High amount of trucks and routes used for distribution D N

Health issues associated with the brand such as Listeria D I

1. Ranking is a measure of the magnitude of a strength or weakness. Scale: D, A, & I. D = dominant, A = average, I = insignificant.

2. Trend is an indication of the direction of change of the strength or weakness. Scale: I, N, & D. I = increasing, N = no change, D = decreasing.

Blue Bell has a lot of strengthens, and even through these hard times they are

experiencing, their strengths are presenting themselves even more. Blue Bell’s internal

capabilities are their greatest strength, because they are capable of creating new

flavors, and always keeping things fresh, while still selling the classics like vanilla,


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chocolate, etc. When it comes to the marketing aspect this is huge, because it is

important to be able to keep things new, and to always have new products produced.

Blue Bell also does a great job of making the decision of marketing certain flavors

seasonally, or during certain periods of time. Another strength of the Blue Bell

Creameries Company is the quality of their ice cream. Blue Bell has been able to keep

amazing quality about their products over the years. The reason why Blue Bell is one of

the top vendors of ice cream in America is, because their ice cream has such great

quality. Another one of Blue Bells strengths is their supporting resource. I'm not talking

about the milk used to make the ice cream, or the other ingredients that are put into the

ice cream. I am talking about the community that surrounds Blue Bell. The community

and employees that are involved and exposed to Blue Bell are a resource to the

company all by themselves. Since the listeria crisis, many citizens and workers have

shown nonstop support for the company. This represents strength, because while Blue

Bell is down and in the rut trying to fix the problem within the production plants, they

know they are not losing valuable customers day in and day out. (Internal Resources

Analysis Table) A company can have amazing strengths and utilize them to their best

ability, but having just a few minor weaknesses can cause a company to crumble if not

handled properly. The main weakness that Bluebell has that might not even be looked

at, as a weakness, is their size. Blue Bell has 668 distribution routes. The convoy and

equipment contains a combination of 1,534 trucks and different equipment. It is not

easy to manage a company that is located in over 20 plus different states. You run into

the risk of quality control and health issues. The listeria issue is a great example,

because I am sure it got looked over for years. There are so many plants where Blue


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Bell products are made, and so many farms were Blue Bell’s ingredients are made that

it is virtually impossible to have known that listeria had infected their products. Blue Bell

does an amazing job at running their company and maintaining quality, but size can be

a weakness. When you have a company as big as Blue Bell’s, any little mix up with the

production of your product could cost you millions of dollars. The marketing issue with

the listeria disease has already cost the company millions of dollars. Blue Bell

creameries faces rate of expansion.

The numbers do not lie, Blue Bell is one of the most popular vendors of ice

cream in the United States based on sales, but you can only find them in 23 states. For

a company that has been around for over 100 years and is so well liked you would think

they would be everywhere across America by now. They could dominate the ice cream

industry and become a monopoly in a sense. Due to their lack of expansion at a faster

rate it is categorized as a weakness. (Internal Resources Analysis Table)


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Key Performances Issues

1. Large “Cold” Supply Chain to Manage (see page 23)

Blue Bell has to manage its entire supply chain and provide excellent quality control. If

they do not, they risk melted ice cream deliveries and possibility for another disease to

spread.

2. Damage to Reputation and Sales from Listeria Outbreak (see page 23)

The listeria outbreak took Blue Bell out of the ice cream market. While they were

offline, many sales were missed and customers started distrusting their products. They

need to overcome this obstacle to return to former market position and growth.

3. Limited Marketplace – Available in Only 23 States (see page 23)

The company operates primarily in the southern United States. Potential sales growth

waits in other markets in the US. If they are to grow in size and scope, expansion to

other states seems opportunistic looking forward.


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III. Portfolio Analysis & Strategic Market Plan

A) PORTFOLIO ANALYSIS

Template to determine Marketing Attractiveness Multifactor Index:

Market Attractiveness Index

Very Unattractive Unattractive

Somewhat Unattractive

Somewhat Attractive Attractive Very Attractive

0 20 40 60 80 100

Market Attractiveness Factors

Market Attractiveness

RatingRelative

Importance

Market Attractiveness

Score

Market Forces

Market Size 60 15% 9

Rate Growth 70 15% 10.5

Buyer Power 30 30% 9

Customer Loyalty 100 40% 40

Market Forces Total 68.5 x Relative Importance of Market Forces 25% 17.13

Competitive Intensity

Number of Competitors 90 25% 22.5

Price Rivalry 80 30% 24

Ease of Entry 60 10% 6

Substitutes 100 35% 35

Competitive Intensity Total 87.5 x Relative Importance of Competitive Intensity 35% 30.63

Market Access

Customer Familiarity 60 45% 27

Channel Access 80 30% 24

Sales Requirements 70 25% 17.5

Market Access Total 68.5 x Relative Importance of Market Access 40% 27.4

Market Attractiveness Index 17.13 + 30.63 + 27.4 = 75.16


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1. Market Attractiveness

Bluebell Creameries carries an overall market attractiveness score of 75.16 (out

of 100). Based on sales, Blue Bell is one of the most popular vendors of ice cream in

the United States, despite being available in only 23 states; they are currently

dominating the market force in the ice cream industry. (Hoover,2016) Blue Bell will

always have competitors in the ice cream market threatening them with broader

accessibility to their ice cream products nationwide. Although the battle for customers

and customer loyalty is huge in the ice cream industry, but then that's when it comes

down to the quality of the product and Blue Bell excels in delivering quality ice cream.

Blue Bell is located in 23 states, but they are currently second place in overall sales,

nationwide. (Hoover, 2016) This is due to the outstanding quality of their ice cream.

Blue Bell will improve their current advertising approach to introduce all the products

they have to offer and acquire more consumers.

Template to determine Competitive Advantage Multifactor Index:

Competitive Advantage Index

Major Disadvantage

Definite Disadvantage

Slight Disadvantage

Slight Advantage

Definite Advantage

Major Advantage

0 20 40 60 80 100

Sources of Competitive Advantage

Competitive Advantage

RatingRelative

ImportanceCompetitive

Advantage Score

Differentiation Advantage

Product Quality 100 30% 30

Service Quality 90 15% 13.5

Brand Image 80 25% 20

Relative Price 100 30% 30

Differentiation Advantage Total 93.5


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x Relative Importance of Differentiation Advantage 30% 28.05

Cost Advantage

Unit Cost 80 35% 28

Transaction Costs 70 20% 14

Marketing Expenses 30 15% 4.5

Overhead Expenses 60 30% 18

Cost Advantage Total 64.5 x Relative Importance of Cost Advantage 35% 22.58

Marketing Advantage

Market Share 80 35% 28

Brand Awareness 100 25% 25

Distribution 70 20% 14

Sales Coverage 60 20% 12

Marketing Advantage Total 79 x Relative Importance of Marketing Advantage 35% 27.65

Competitive Advantage Index 28.05 + 22.58 + 27.65 = 78.28

2. Competitive Advantage

Blue Bell carries an overall competitive advantage index score of 78.28 (out of

100). The difference advantage Blue Bell has is the way they have been is by being

able to keep amazing quality about their products over the years. Blue Bell retains

control over all aspects of its business, primarily to ensure quality control and the use of

the freshest ingredients available. The company uses milk from approximately 60,000

cows each day, and the cream used during each day's production run is always less

than 24 hours old. The reason why Blue Bell is one of the top vendors of ice cream in

America is, because their ice cream has such great quality. The company has a

favorable cost advantage due to them owning their own trucks, which is a huge supply

chain advantage by not outsourcing. Also Blue bell does not market much so there is a

huge budget for doing so. Blue Bell has about 668 distribution routes with convoy and


30

equipment contains a combination of 1,534 trucks and different equipment. (Blue Bell,

2016) You can see that Blue Bell is capable of boosting their sales when needed. All

they would have to do is release a new flavor in to the market. When it comes to the

Marketing Advantage this is huge, because it is important to be able to keep things new,

and to always have new products produced. Blue Bell also does a great job of making

the decision of marketing certain flavors seasonally, or during certain periods of time.

The development of more distribution centers will allow the company to distribute more

of its ice cream products and increase consumers.

Template of Strategic Market Plan Matrix:

3. Strategic Market Plan Matrix

Market Attractiveness Index: 75.16

Competitive Advantage Index: 78.28


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B. Strategic Market Plan

After verifying data obtained from the Market Attractiveness and Competitive

Advantage Indexes, it was determined that Blue Bell can be identified in the “Improve

Position” category and will implement an offensive strategy”.

Blue Bell ranks as one of the top three, best-selling ice creams nationwide and

has major advantages when it comes to competition despite the company's products

being available in about 26% of US supermarkets. Even though the company keeps a

roster of creative flavor combinations, its Homemade Vanilla is its top selling flavor. In

order for Blue Bell to be able to produce sales growth and future profit performance,

their main goal will be to construct more distribution centers that will be strategically

situated near several retailers' distribution centers. The development will allow them to

support deliveries directly to foodservice operators and grocers in many areas.


Competitive Advantage

0 20 40 60 80 100

New Market EntryImprove Position

Invest to GrowImprove PositionProtect Position

Invest to GrowProtect Position

Improve PositionOptimize Position

Harvest

Improve PositionOptimize Position

Invest to GrowProtect Position

Optimize Position

Harvest or Divest Monetize, Harvest, or Divest

Monetize, Harvest, or Divest

100

80

60

40

20

0

Marketing Attractiveness

32

By developing more distribution centers, Blue Bell Creameries will be able to take

the lead in the ice cream market, beating out competitors such as Dreyer's Grand Ice

Cream Holdings, Inc. and Wells Enterprises, Inc. Blue Bell is a creamery company and

by placing more distribution centers not only will it be beneficial for them but allow them

to grow their market size.


DEFENSIVE

STRATEGIC FOCUSManage profits & invest to

protect position

STRATEGIC FOCUSInvest for growth & position

Emerging Early Growth Rapid Growth Late Growth Maturing Market Mature Market Declining Market

DEFENSIVE

DEFENSIVEOFFENSIVEDEFENSIVE

OFFENSIVE

OFFENSIVE

OFFENSIVE

MARKET DEM

PRODUCT LIFE-CYCLE STAGES

33

C. BUSINESS PERFORMANCE (STRATEGIC) OBJECTIVES

Blue Bell will take a better marketing approach by implementing advertising into their

business plan. The company currently relies on the same ad campaign, produced by

the same person for more than 33 years, by word of mouth, and through their own

website. Advertising will allow interested ice cream consumers to be directed towards

Blue Bell through brand recognition. Blue Bell’s main focus will be to get more

consumers interested, and help get their ice cream products publicized through social

media, website improvements, billboards, and commercials.

Table of Share Position

Strategic Market Plan

Base Year Year 1 Year 2 Year 3

Market Growth Rate (%)

.25 .30 .31 .33

Market Demand (Billion)

5,030 5,030 5,030 5,030

Market Share (%) 11.30 13 15 17

*Base Year reflects total sales during the year 2015 (Blue Bell)

Blue Bell will obtain a 17% market share in year 3 and market demand will stay the same since it’s a mature market.


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IV. Marketing Objectives

A. Product (Line) Profile

Blue Bell produces over 250 different frozen products. Of these, 66 are flavors of

ice cream. Blue Bell offers around 20 ice cream flavors year-round and about 35

rotating flavors, while an additional two to three dozen are offered seasonally. While

Blue Bell is considered to be a regional brand (with distribution in certain regions of only

23 US states), it is one of the nation's most popular ice cream brands. In addition to ice

cream, it makes yogurt, frozen treats (ice cream sandwiches, fruit pops), sherbet, and

low-fat and sugar-free ice creams (Vault, 2016).

Blue Bell introduced its flagship flavor, Homemade Vanilla, in 1969 and was the

first company to mass-produce the flavor Cookies’n Cream. As of 1997, Blue Bell

Homemade Vanilla was the best-selling single flavor of ice cream in the United State,

and in 2001, Forbes named Blue Bell the best ice cream in the country. In 2011, Blue

Bell introduced a new flavor exclusive to Colorado, Rocky Mountain Road, made with


35

more premium ingredients (including chocolate-covered nuts and a marshmallow swirl)

compared to its year-round Rocky Road).

In addition, Blue Bell current line-up includes our popular, fan favorite flavors

such as Black Walnut, Butter Crunch, Buttered Pecan, Cherry Vanilla, Chocolate Chip,

Cookie Dough, Coffee, Cookies’n Cream, Dutch Chocolate, Homemade Vanilla, Milk

Chocolate, Mint, Chocolate Chip, Natural Vanilla Beam, Peppermint, Pistachio Almond,

Rocky Road, and The Great Divided. (Blue Bell, 2016)

B. Target Market

With the average prices $2.45 (at Walmart), adults with children of various ages

have high indexes and are more likely to eat Blue Bell Ice Cream. Homemakers, or

possibly stay-at-home moms, are 29% more likely to eat Blue Bell Ice Cream, and

adults who are married are 11% more likely to eat Blue Bell. Adults with 5 or more

people in the household are 15% more likely to eat Blue Bell. We can assume that

people of these demographics are part of large families and are our target audience.

Our target is 2% more likely to frequently eat sweets and 4% more likely to say that

there is nothing wrong with indulging in fattening foods. They are 5% more likely to be

swayed by coupons and 4% more likely to pay attention to commercials. They are 5%

more likely to remember advertised products when shopping. Adults with children are

31% more likely to use advertisements to help them choose products to buy for their

children. (Hoover, 2016)

C. Positioning Strategy Statement & Value Proposition


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i. Positioning Strategy

Blue Bell is affordable and low-fat and sugar-free ice creams, which is available

in 23 states. While some competitors have slimmed down the size of their ice cream

containers to maintain profit margins, Blue Bell asserts that its ice cream will retain a

half-gallon size. Therefore, Blue bell tries to keep customers coming back for favorite

flavors while trying new ones each year.

ii. Value Proposition

Target Segment: Blue Bell’s target segments extend to the consumer from all

age, included adults, children and families, consumers, and supermarket.

Benefits: Consumers will see that Blue Bell ice cream is often lower in both fat

and calories because it doesn't contain all the candy and sauces, and you are better

able to control how much is placed in your bowl.

Price Range: A half-gallon of Blue Bell, whose retail price ranges from $4.99 tp

$5.99, weighs 52 ounces, compared to 40 ounces for Breyers, and it has a butterfat

content of 13 percent, compared to 18 percent for Haagen-Dazs.

D. Goals and Objectives (Sales Volume, Market Share, Net Marketing

Contribution, Profit, etc.)

i. Sales Volume


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By implementing multiple new advertising platforms, we plan to further reach our

target audience and increase sales among homemakers and adults with families by up

to 33%, and encourage them to make the choose Blue Bell instead of other ice-cream

brand.

ii. Market Share

The company is among the top sellers of ice cream nationwide, with 2003 sales

of $400 million, while its products are distributed only in 15 states. Blue Bell will

increase its market share from a little over 11% in 2015 to 17% in year 3. And our goal

is to dominate our target market in the South to ultimately increase our market share by

17% and become the number one ice cream brand in the United States.

iii. Net Marketing Contribution

i. Marketing ROS (%)

= Net marketing contribution/sales x 100%

Year Net Marketing Contribution (NMC) / Sales x 100% MARKETING ROS

Year 1 $187,015,400.04 / $653,900,000.13 x 100% 28.6%

Year 2 $215,787,000.00 / $754,500,000.00 x 100% 28.6%

Year 3 $244,558,600.00 / $855,100,000.00 x 100% 28.6%

ii. Marketing ROI (%)

= Net marketing contribution/Marketing and sales expenses x 100%

Year Net marketing contribution/Marketing and sales expenses x 100%

MARKETING ROI

Year 1 $187,015,400.04 / $13,078,000.00 x 100% 14.3%


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Year 2 $215,787,000.00 / $15,090,000.00 x 100% 14.3%

Year 3 $244,558,600.00 / $17,102,000.00 x 100% 14.3%

IV. Advertising/Promotion

Blue Bell currently has a Facebook page but has yet to present itself on any

other social networking sites. We want to revamp the Facebook page and create two

additional accounts for both Instagram and Twitter, while still honoring the brands

traditional and southern style. We budgeted for sponsored advertisements to appear on

our three different social media platforms. The ads will be simple and traditional to

appeal to our current customers, and feature new and interactive promotional methods

to grab new ones. The paid-for advertisements will be well coordinated using different

promotional methods that are intended to reinforce each other. Our debut on social

media is the perfect way to reach out to new customers and further illustrate a positive

image for the brand.

Other promotional efforts done include the posting of professional looking

photographs, reposting of photographs uploaded by users and fans, open ended posts

allowing for user feedback and conversation, and surprise coupons meant to excite and

reward loyal customers and our social media followers and fans. Our first coupon to

launch will be the "buy one half-gallon, receive one half-gallon free!" scheduled to

release at the beginning of December in honor of upcoming holidays. Coupons and

other rewards programs will come out four to five times a year.


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V. Marketing Mix Strategy

A. Marketing Strategy Alternatives

Although our company Blue Bell creamery ranks in the top three ice cream

making company in the nation, even though the company products are only distributed

in about 26% of U.S stores. Vanilla flavor is our company top selling flavor even though

there are other roster of creative flavor combination. However due to our competitors

like “Dreyer’s Grand Ice Cream Holdings, Inc., Unilever, and Wells Enterprises, Inc.”

(Hoover, 2016) producing varieties of flavor will acquire more customer, so we decided

to create an online and in store ice cream surveys for customers to let us know which

flavor they will want us to add to our ice cream menu. In addition, since our company is

considered to be “a regional brand because its only distributed within certain region of

only 23 states in the United States” (Hoover, 2016), we plan to expand our company by

using the marketing to “Business to Consumer” strategy in order to increase our


40

customers, improve our operating efficiency and most importantly improve our customer

satisfaction.

B. Marketing Strategy and Position

1. Product Strategy

We will apply product products variation to differentiate it itself apart from the

competitions. While our competitors slimmed down the size of their ice cream

containers in order to maintain profit margin we will retain the half-gallon size. And to

keep its customers coming back for favorite flavors while trying new ones each year, the

creamery boasts an active product development group that churns out new flavors,

such as its Rocky Mountain Road. (Hoover,2016) The goal of this plan is to set clear

objectives that can be achieved within a year. Increasing market share, sales, social

media presence and brand awareness are necessary steps to follow.

The company has two selected product line that consists of Frozen Yogurt which

flavors are: banana split, cherry granola crunch, country vanilla and strawberry and Ice

Cream which flavors are year round and rotational flavors but mostly known for its

vanilla flavor. Blue Bell will add more flavor to its ice cream, so that there will be variety

of savor to taste from. The more flavor an ice cream company has, the more customers

it will retain and also the more the money will be made, since Blue Bell has only been

known for just two ice cream flavor, initiating and producing more flavors will help the

company grow. While some competitors have slimmed down the size of their ice cream

containers to maintain profit margins, Blue Bell asserts that its ice cream will retain its

true half-gallon size.

2. Pricing Strategy


41

Blue Bell is a family owned company, so the satisfaction of our customer is our

number one priority, and because our company has been known for providing quality

products, we will implement “market based pricing” through great value price to stay

ahead of our competitors.

3. Promotion Strategy

With Blue Bell only available within 23 states in the nation, the company will not be

well recognized like that, so in order for our company to be well recognized, we will

invest in marketing strategies and we will advertise through social media. Some

examples will be Facebook, Instagram, Twitter and Snapchat. Also we want to create

an advertising camping on television, newspapers and billboards, Blue Bell can

4. Distribution Strategy

Since our company only distribute in certain regions of only 23 states in the United

State, we plan to expand our company by opening more stores in the nation and also by

distributing our product to different retail stores in order to increase our customers,

improve our operating efficiency and most importantly improve our customer

satisfaction.


42

VI. Tactical Action PlansTactical

PlanStrategy Action Item Responsibility Measure Time

FrameProduct

Action PlanProduct

DifferentiationEvaluate

competitor’s flavors and size

of their ice cream

containers

Market analyst Top 5 Competitors

Continuous

Price ActionPlan

Perceived ValuePricing

Implement market based

pricing

Price analyst Top 5 Competitors

Quarterly

PromotionAction Plan

Pull Communications

Advertise through social

media

Marketing Communications

& Retail advertisers

50 Customers

Monthly

DistributionAction Plan

Direct Channel System

Improve operating efficiency

Business Operations Manager

Quarterly Financial Reports

Quarterly

Service ActionPlan

Customer Satisfaction

Satisfy customers

expectations by adding new ice cream flavors.

Customer Service

department

All customers

Continuous


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VII. Implementation, Evaluation and Control

Implementation and Schedules

Blue Bell will continue to focus in the plan of creating new and better flavors for

the consumers, and keeping the production of current flavors in the market for the

incoming years. An amount of the new flavors are expected to come out to the market

on late 2016, and the three-year plan mentioned before will stay ongoing. In the

meantime, the marketing and sales division will continue to develop new and better

ways to maintain and raise the popularity of the brand to the general public in order to

attract new consumers.

The marketing and sales division will also continue to work in the new selling and

advertising strategies for Blue Bell Creameries. In addition, the marketing plan for the

new flavors will continue its development. Along with this, the search of new methods of

advertising and, new media through which the brand can grow will also continue.


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Evaluation, Control, and Monitoring Plan

Blue Bell will continue to maintain its superiority over other brands through new

methods of advertising, and the increase in sales through the development of new

flavors, and a possible new plant in order to satisfy the amount of current and new

consumers. Even if the sales increase at a slow pace in comparison to other brands,

Blue Bell has already developed strategies to eliminate the possibility of low sales

numbers, in order to increase the prosperity of the brand.

As mentioned before, brand awareness is one of the important points in the

three-year plan, and is extensively covered, along with the introduction of the new

flavors during the same span of years. Blue Bell will focus most of the marketing

resources in developing new ways to advertise the brand, mostly through the internet.


45

VIII. Financial Projections (Expected Payoff) and Budget

Financial Projections

Firstly, the market for ice cream consumption is in a mature stage. It is not

growing; therefore, we hold market demand at a constant $5.03 billion dollars. We also


46

assume that there are opportunistically 50 different supermarkets, wholesalers,

convenience stores, and the like who are buying Blue Bell products. This would include

places like Wal-Mart, Target, and gas stations. Currently, according to Statista, Blue

Bell owns approximately 11 percent of market share in the ice cream manufacturing

marketplace(Statista, 2016). We encourage Bull Bell Creameries to expand by two 2%

per year, over the next three years, while ramping sales from 11% to 17%. Accordingly,

reference to the Financial Budget and Projections chart to see further detail. Some

highlights include maintaining a 30% profit margin. Also, over the next three years,

idealistically, our profit should increase by $12.9 million dollars. This equates to 35%

jump in three years, an aggressive stance we are confident is capable. We also budget

for increases in the marketing expenditure budget every year to allow for our growth.


47

Marketing expenses budget

To expand by 2% market share every year, our sales leaders, teams, and

supporting staff need to be well-compensated and the right people need to be

employed. In order to accommodate a growing marketing and sales department, we

increase our salaries and benefits 60% over three years from $4.8 million to $8 million.

This will cover hiring top talent to sell products and manage the department. As we push

to grow, we will expand our efforts to build online communication systems for customers


48

and provide technical support expenditure to grow allowing for newer ways to purchase,

perhaps ice cream delivery applications through smart phones. Promotion budgets for

our sales and marketing people will steadily increase, allowing for more visits to trade

shows and allowing for more in store promotions. We will create a marketing blitz and

push forward with heavy investment into advertising, newspapers, radio/television,

direct mail offers, point of purchase coupons, and the like. Other expenses including

phones and travel will stay steady over the next four years.

IX. References


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Blue Bell Creameries, L.P.|Company Profile|Vault.com. (n.d.). Retrieved April 05, 2016,

from http://www.vault.com/company-profiles/food-beverage/blue-bell-

creameries,-lp/company-overview.aspx

Blue Bell Creameries. (2010, June 12). Retrieved April 05, 2016, from

https://tshaonline.org/handbook/online/articles/dibgj

Blue Bell Country. (n.d.). Retrieved April 05, 2016, from

http://cdn.bluebell.com/the_little_creamery/blue_bell_country.html

Blue Bell Creameries, L.P. (n.d.). Retrieved March 6, 2016, from

http://subscriber.hoovers.com/ezproxy.lib.uh.edu/H/Company360

Best, Roger (2009). Marketing Metrics Resources – Glossary. Retrieved from

http://www.marketingmetricssolutions.com/glossary.cfm

FIND/SVP (August 1998). The Market for Ice Cream and Other Frozen Desserts.

Retrieved from

http://academic.marketresearch.com.ezproxy.lib.uh.edu


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Hernandez, R. (2005, February 20). Blue Bell heats up ice cream competition.

Retrieved April 05, 2016, from

http://www.bizjournals.com/phoenix/stories/2005/02/21/story8.html

Reynolds, A. (2014, July 03). Consumer Reports: Best ice creams. Retrieved April 05,

2016, from

http://www.ky3.com/news/local/consumer-reports-best-ice-creams/21048998_26

781900

Statista (April 2015). Market Share of the Leading Ice Cream Brands in the United

States in 2015, based on Sales. Retrieved from

http://www.statista.com/statistics/255060/market-share-of-the-leading-ice-cream-

brands-in-the-united-states/


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