square ice cream
DESCRIPTION
QUARE today symbolizes a name – a state of mind. But its journey to the growth and prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player.TRANSCRIPT
MarkeTing plan
Company profile and overview
QUARE today symbolizes a name ndash a state of mind But its journey to the growth and prosperity
has been no bed of roses From the inception in 1958 it has today burgeoned into one of the top
line conglomerates in Bangladesh Square Pharmaceuticals Ltd the flagship company is
holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985
and is now on its way to becoming a high performance global player
SQUARE today is more than just an organization it is an institute In a career spanning across
four and half decades it has pioneered the development of the local business in fields as diverse
as Pharmaceuticals Toiletries Garments Textile Information Technology Health Products
Food Products Hospital etc With an average Annual turnover of over US$ 200 million and a
workforce of about 3500 the SQUARE Group is a true icon of the Bangladesh business sector
SQUARE today symbolizes a name- a state of mind
1958 Debut of Square Pharma as a Partnership Firm
1964 Converted into a Private Limited Company
2001 SQUARE Consumer Products Ltd Started its operation
Brands under Square consumer products
1 Radhuni
2 Ruchi
3 Chashi
Executive Summary
ldquoSquare consumer productsrdquo is preparing to launch Ruchi Ice cream in a mature market We will
offer new to our market flavours of ice cream Our target customers will
Competitive analysis
40 BANGLADESH ICE CREAM INDUSTRY
41 Industry Construct
The ice cream industry of Bangladesh is a growing one With an estimated market size of BDT
220 Cr in 2009 the market can be subdivided broadly into branded and unbranded categories
Total Market [BDT 220 Cr]Branded [BDT 131 Cr] Unbranded [BDT 79 Cr] Common [BDT 121
Cr] Boutique [BDT 98 Cr]Around 20000 local manufacturers
Figure 6 Market Construct of Bangladesh Ice cream Industry
411 Branded Market
The branded market segment is around BDT 131 Cr with players in both common conventional
ice cream format (BDT 121 Cr) and boutique format which is still very small in size (BDT 98
Cr)
Common Format
Common format ice creams are generally produced and packed in factory These are distributed
and sold through retail channels carts to the shoppers Products can be single serving like stick
and cones or multiple serving like containers Moreover single serving can either be water based
where only water and flavours are mixed or cream based where milk cream and flavours are
mixed
Branded common format ice cream industry has only five players in the market They are Igloo
Polar Kwality Savoy and Milk Vita Igloo is currently the market leader Polar stayed market
leader for 10 years (rsquo86-lsquo96) in their initial days and Kwality challenged and took Polarrsquos second
position in recent times However Igloo bounced back every time they faced challenge Milk
Vita came in the market with proper dairy ice cream but failed to create an impact as their core
business is not ice cream
Boutique Format
Boutique format ice creams are sold through dedicated outlets where there is seating facility for
consumers They can see the products flavours open in freezers and can choose directly Also
consumers can decide what type of packing to use eg cup cones or containers and based on the
consumers decision product is either served for consumption at the premises or take away
Evaluation of Entry into Ice cream Business for Bangladesh Limited 17
Boutique format has seen an upsurge from year 2000 with introduction of premium franchise
and imported ice creams This segment is driven by Dhaka and Chittagong based players Club
Gelato MoumlvenPick Andersenrsquos Gelateria Igloo Baskin31Robbins and Sub Zero are the major
players in the segment Among these Gelateria Igloo and Sub Zero are run by common format
players Igloo and Kwality respectively
412 Unbranded Market
The unbranded market basically is constituted with around 20000 local small producers that do
not use any brand leverage and compete in the market based on significant lower price in the
range of BDT 1-5
Market size of this segment is significantly high with BDT 79 Cr These producers are mainly
rural and suburb based where concentration of SEC C and lower SECs are high They mainly
produce water ice cream sticks or in colloquial terms ldquoBaarfirdquo These are made with saccharine
and colours They also produce small amount of milk based kulfi These ice creams are very
unhygienic and of low quality
42 Historical Progress of the Industry
1048766 Before 1964 Ice cream market dominated by unorganized unbranded approach
1048766 1964 Igloo started large scale organized approach under K Rahman amp Co Ltd
1048766 1965 Igloo opened up the first ice-cream parlour in Dhaka
1048766 1971 Igloo was nationalized by the government of Bangladesh after liberation
1048766 1972 In June Igloo was handed over to Bangladesh Sugar amp Food Industries Corporation
1048766 1983 Abdul Monem Ltd acquired Igloo under privatization policy
1048766 1986 Polar started operation introduced food grade plastic based packaging They
immediately became market leader with extensive campaign
1048766 1988 Dolce Vita Gelato one of the dedicated boutique operator brought premium ice cream
1048766 Early 1990s Rainbow and Snow White started extensive operation in the boutique segment
1048766 Late 1990s American Soft Ice cream started promoting the soft ice cream format
1048766 1995 Savoy was introduced but failed due to product quality though in suburban areas they
grabbed share with low price
1048766 1996 In September Igloo organized a massive marketing campaign
1048766 Introduced the first straight line extrusion ice-cream in the market
1048766 They initiated a massive campaign and became market leader after 10 years
1048766 1997 In February Igloo took a devastating decision to increase price for the cup line
1048766 Igloo not only incurred substantial financial loss but also lost the hard earned market share
The question of sustaining became a central issue
1048766 In summer Price of 11 items were revised and communicated as special discount
1048766 This instantly pushed them to the number one position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 18
1048766 1999 Kwality ice-cream entered the market
1048766 2000 Entry of the premium boutique operators like Club Gelato MoumlvenPick and
Baskin31Robbins
1048766 2002 Kwality launched an extensive campaign and started to capture the ice-cream outlets of
the city by providing freezers
1048766 2004 Kwalityrsquos number of freezers exceeded Polarrsquos and moved to second position
1048766 2005 onwards Igloo leads the market and there is immense competition among Polar and
Kwality for the coveted 2nd spot
Historical progress of this industry is of great importance Bangladesh ice cream industry has
traditionally been exposed to high quality products for a long time Igloo initiated the progress of
boutique segment (1965) but it lost its way over time The segment picked up once again in the
recent years Also high quality products and innovations in the common format segment have
created an appreciation for continuous innovation and better products in the minds of the
consumers Consumers in Bangladesh see ice cream as a fun product which requires novelty and
quality coupled with continuous hype around the brand This is why we see Kwality and Polar
could create early impacts with their entry into the industry as they came up with innovations in
product or packaging and arranged massive marketing campaigns during their launches Igloo
had to minimize their effects with similar campaigns to hold on to their position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 19
50 MARKET amp COMPETITION ANALYSIS
51 Market Description
Bangladesh ice-cream industry is growing With increasing market demand size of the industry
is growing but due to entry barriers of lengthy and complex production process and high
investment few companies enter this business Although local companies in the branded segment
have captured most of the market share small unbranded local companies own a huge market to
themselves Where branded ice cream consumers look for innovation and quality unbranded
users outside metro cities are currently inclined towards low price low quality products This
creates an opportunity for further market development on the hygiene and health platform On
the other hand the boutique industry is doing quite well with their approach towards ice cream
as a dessert item along with service of other snacks like cakes and coffee at their premises which
help them reduce seasonality effects of ice cream
With a complicated scenario in the market to analyze the industry condition and understand the
competitive realities details of market characteristics and players of both common and boutique
segments are explained in following sections However unbranded segment is excluded from
discussion as Unileverrsquos portfolio does not match the characteristics and price level of this
category
511 Market Characteristics of the Common Format Segment
A Market size
Due to promotion innovation and exposure to different cultures the consumption of ice cream
has increased As a result the total market size is expanding At present the local companies in
the common format segment have a huge market of about BDT 121 Cr This market is 16 times
larger than the boutique segment and nearly doubles the unbranded segment Over the years the
size increase of the industry shows the prospect of converting unbranded unhygienic ice cream
consumers into branded ice cream consumers However price level still remains a big problem
for the branded category as petty unbranded ice cream companies with a price range of Tk1 to
Tk5 have a total market size of BDT 79 Cr which shows a hint of high price sensitivity in lower
SEC consumers Overall market size of 220 Cr indicates that most of the people in the country
are exposed to ice cream or some kinds of derivatives of ice cream like ldquoBaarfirdquo however they
probably cannot afford higher priced icy fruit sticks (BDT 6-10) available in the branded
segment
B Competitive rivalry in the Market
Competition is not very intense among the existing five companies because the number of
operators is very small considering the total population Also complexities of production and
distribution process and other entry barriers are stopping new companies from entering the
industry Evaluation of Entry into Ice cream Business for Bangladesh Limited 20
Igloo is confident about its unbeatable first position but there is competition among other
companies such as Polar and Kwality for the 2nd position However in current market no
operator is showing much aggressive and visible activity towards growth It is expected that
recent announcement regarding introduction of ISIS diabetic ice cream by Polar in partnership
with DANONE would again create some hype in the market
Reasons behind existing level of rivalry among competitors can be attributed to following
reasons
1048766 The ice cream industry has few sellers because there is economy of scale through large-scale
production The larger firms have a cost advantage over smaller firms they can produce more
cheaply- making it hard for small firms to survive
1048766 Market is bigger than capability of current players and can accommodate them without much
trouble This is because PCC of ice cream in the country is still pretty low
1048766 This market has substantial amount of ldquobarriers to entryrdquo making it difficult for a large
number of competitors to enter the market The cost of setting up a new plant in this industry is
quite high The cost of entry works as an entry barrier
1048766 To get people to try new product the potential entrant will have to run a big competitive
advertising or massive promotional campaign which is expensive The prevailing companies
created barriers in entry for potential rivals by using extensive advertising and product
differentiation earlier which has its effects till now Another fact is that product awareness and
brand loyalty to the existing firms make it expensive for potential rivals to enter
1048766 To further elaborate present competitive reality of the industry the five competitive forces are
discussed below
1048766 The rivalry among the competing sellers is weak as market is yet to develop more
1048766 With various entry barriers not many new companies are attempting to enter this industry
1048766 As there are no direct substitute products to ice-cream the companies donrsquot face any
competition from other industries
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Executive Summary
ldquoSquare consumer productsrdquo is preparing to launch Ruchi Ice cream in a mature market We will
offer new to our market flavours of ice cream Our target customers will
Competitive analysis
40 BANGLADESH ICE CREAM INDUSTRY
41 Industry Construct
The ice cream industry of Bangladesh is a growing one With an estimated market size of BDT
220 Cr in 2009 the market can be subdivided broadly into branded and unbranded categories
Total Market [BDT 220 Cr]Branded [BDT 131 Cr] Unbranded [BDT 79 Cr] Common [BDT 121
Cr] Boutique [BDT 98 Cr]Around 20000 local manufacturers
Figure 6 Market Construct of Bangladesh Ice cream Industry
411 Branded Market
The branded market segment is around BDT 131 Cr with players in both common conventional
ice cream format (BDT 121 Cr) and boutique format which is still very small in size (BDT 98
Cr)
Common Format
Common format ice creams are generally produced and packed in factory These are distributed
and sold through retail channels carts to the shoppers Products can be single serving like stick
and cones or multiple serving like containers Moreover single serving can either be water based
where only water and flavours are mixed or cream based where milk cream and flavours are
mixed
Branded common format ice cream industry has only five players in the market They are Igloo
Polar Kwality Savoy and Milk Vita Igloo is currently the market leader Polar stayed market
leader for 10 years (rsquo86-lsquo96) in their initial days and Kwality challenged and took Polarrsquos second
position in recent times However Igloo bounced back every time they faced challenge Milk
Vita came in the market with proper dairy ice cream but failed to create an impact as their core
business is not ice cream
Boutique Format
Boutique format ice creams are sold through dedicated outlets where there is seating facility for
consumers They can see the products flavours open in freezers and can choose directly Also
consumers can decide what type of packing to use eg cup cones or containers and based on the
consumers decision product is either served for consumption at the premises or take away
Evaluation of Entry into Ice cream Business for Bangladesh Limited 17
Boutique format has seen an upsurge from year 2000 with introduction of premium franchise
and imported ice creams This segment is driven by Dhaka and Chittagong based players Club
Gelato MoumlvenPick Andersenrsquos Gelateria Igloo Baskin31Robbins and Sub Zero are the major
players in the segment Among these Gelateria Igloo and Sub Zero are run by common format
players Igloo and Kwality respectively
412 Unbranded Market
The unbranded market basically is constituted with around 20000 local small producers that do
not use any brand leverage and compete in the market based on significant lower price in the
range of BDT 1-5
Market size of this segment is significantly high with BDT 79 Cr These producers are mainly
rural and suburb based where concentration of SEC C and lower SECs are high They mainly
produce water ice cream sticks or in colloquial terms ldquoBaarfirdquo These are made with saccharine
and colours They also produce small amount of milk based kulfi These ice creams are very
unhygienic and of low quality
42 Historical Progress of the Industry
1048766 Before 1964 Ice cream market dominated by unorganized unbranded approach
1048766 1964 Igloo started large scale organized approach under K Rahman amp Co Ltd
1048766 1965 Igloo opened up the first ice-cream parlour in Dhaka
1048766 1971 Igloo was nationalized by the government of Bangladesh after liberation
1048766 1972 In June Igloo was handed over to Bangladesh Sugar amp Food Industries Corporation
1048766 1983 Abdul Monem Ltd acquired Igloo under privatization policy
1048766 1986 Polar started operation introduced food grade plastic based packaging They
immediately became market leader with extensive campaign
1048766 1988 Dolce Vita Gelato one of the dedicated boutique operator brought premium ice cream
1048766 Early 1990s Rainbow and Snow White started extensive operation in the boutique segment
1048766 Late 1990s American Soft Ice cream started promoting the soft ice cream format
1048766 1995 Savoy was introduced but failed due to product quality though in suburban areas they
grabbed share with low price
1048766 1996 In September Igloo organized a massive marketing campaign
1048766 Introduced the first straight line extrusion ice-cream in the market
1048766 They initiated a massive campaign and became market leader after 10 years
1048766 1997 In February Igloo took a devastating decision to increase price for the cup line
1048766 Igloo not only incurred substantial financial loss but also lost the hard earned market share
The question of sustaining became a central issue
1048766 In summer Price of 11 items were revised and communicated as special discount
1048766 This instantly pushed them to the number one position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 18
1048766 1999 Kwality ice-cream entered the market
1048766 2000 Entry of the premium boutique operators like Club Gelato MoumlvenPick and
Baskin31Robbins
1048766 2002 Kwality launched an extensive campaign and started to capture the ice-cream outlets of
the city by providing freezers
1048766 2004 Kwalityrsquos number of freezers exceeded Polarrsquos and moved to second position
1048766 2005 onwards Igloo leads the market and there is immense competition among Polar and
Kwality for the coveted 2nd spot
Historical progress of this industry is of great importance Bangladesh ice cream industry has
traditionally been exposed to high quality products for a long time Igloo initiated the progress of
boutique segment (1965) but it lost its way over time The segment picked up once again in the
recent years Also high quality products and innovations in the common format segment have
created an appreciation for continuous innovation and better products in the minds of the
consumers Consumers in Bangladesh see ice cream as a fun product which requires novelty and
quality coupled with continuous hype around the brand This is why we see Kwality and Polar
could create early impacts with their entry into the industry as they came up with innovations in
product or packaging and arranged massive marketing campaigns during their launches Igloo
had to minimize their effects with similar campaigns to hold on to their position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 19
50 MARKET amp COMPETITION ANALYSIS
51 Market Description
Bangladesh ice-cream industry is growing With increasing market demand size of the industry
is growing but due to entry barriers of lengthy and complex production process and high
investment few companies enter this business Although local companies in the branded segment
have captured most of the market share small unbranded local companies own a huge market to
themselves Where branded ice cream consumers look for innovation and quality unbranded
users outside metro cities are currently inclined towards low price low quality products This
creates an opportunity for further market development on the hygiene and health platform On
the other hand the boutique industry is doing quite well with their approach towards ice cream
as a dessert item along with service of other snacks like cakes and coffee at their premises which
help them reduce seasonality effects of ice cream
With a complicated scenario in the market to analyze the industry condition and understand the
competitive realities details of market characteristics and players of both common and boutique
segments are explained in following sections However unbranded segment is excluded from
discussion as Unileverrsquos portfolio does not match the characteristics and price level of this
category
511 Market Characteristics of the Common Format Segment
A Market size
Due to promotion innovation and exposure to different cultures the consumption of ice cream
has increased As a result the total market size is expanding At present the local companies in
the common format segment have a huge market of about BDT 121 Cr This market is 16 times
larger than the boutique segment and nearly doubles the unbranded segment Over the years the
size increase of the industry shows the prospect of converting unbranded unhygienic ice cream
consumers into branded ice cream consumers However price level still remains a big problem
for the branded category as petty unbranded ice cream companies with a price range of Tk1 to
Tk5 have a total market size of BDT 79 Cr which shows a hint of high price sensitivity in lower
SEC consumers Overall market size of 220 Cr indicates that most of the people in the country
are exposed to ice cream or some kinds of derivatives of ice cream like ldquoBaarfirdquo however they
probably cannot afford higher priced icy fruit sticks (BDT 6-10) available in the branded
segment
B Competitive rivalry in the Market
Competition is not very intense among the existing five companies because the number of
operators is very small considering the total population Also complexities of production and
distribution process and other entry barriers are stopping new companies from entering the
industry Evaluation of Entry into Ice cream Business for Bangladesh Limited 20
Igloo is confident about its unbeatable first position but there is competition among other
companies such as Polar and Kwality for the 2nd position However in current market no
operator is showing much aggressive and visible activity towards growth It is expected that
recent announcement regarding introduction of ISIS diabetic ice cream by Polar in partnership
with DANONE would again create some hype in the market
Reasons behind existing level of rivalry among competitors can be attributed to following
reasons
1048766 The ice cream industry has few sellers because there is economy of scale through large-scale
production The larger firms have a cost advantage over smaller firms they can produce more
cheaply- making it hard for small firms to survive
1048766 Market is bigger than capability of current players and can accommodate them without much
trouble This is because PCC of ice cream in the country is still pretty low
1048766 This market has substantial amount of ldquobarriers to entryrdquo making it difficult for a large
number of competitors to enter the market The cost of setting up a new plant in this industry is
quite high The cost of entry works as an entry barrier
1048766 To get people to try new product the potential entrant will have to run a big competitive
advertising or massive promotional campaign which is expensive The prevailing companies
created barriers in entry for potential rivals by using extensive advertising and product
differentiation earlier which has its effects till now Another fact is that product awareness and
brand loyalty to the existing firms make it expensive for potential rivals to enter
1048766 To further elaborate present competitive reality of the industry the five competitive forces are
discussed below
1048766 The rivalry among the competing sellers is weak as market is yet to develop more
1048766 With various entry barriers not many new companies are attempting to enter this industry
1048766 As there are no direct substitute products to ice-cream the companies donrsquot face any
competition from other industries
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
position in recent times However Igloo bounced back every time they faced challenge Milk
Vita came in the market with proper dairy ice cream but failed to create an impact as their core
business is not ice cream
Boutique Format
Boutique format ice creams are sold through dedicated outlets where there is seating facility for
consumers They can see the products flavours open in freezers and can choose directly Also
consumers can decide what type of packing to use eg cup cones or containers and based on the
consumers decision product is either served for consumption at the premises or take away
Evaluation of Entry into Ice cream Business for Bangladesh Limited 17
Boutique format has seen an upsurge from year 2000 with introduction of premium franchise
and imported ice creams This segment is driven by Dhaka and Chittagong based players Club
Gelato MoumlvenPick Andersenrsquos Gelateria Igloo Baskin31Robbins and Sub Zero are the major
players in the segment Among these Gelateria Igloo and Sub Zero are run by common format
players Igloo and Kwality respectively
412 Unbranded Market
The unbranded market basically is constituted with around 20000 local small producers that do
not use any brand leverage and compete in the market based on significant lower price in the
range of BDT 1-5
Market size of this segment is significantly high with BDT 79 Cr These producers are mainly
rural and suburb based where concentration of SEC C and lower SECs are high They mainly
produce water ice cream sticks or in colloquial terms ldquoBaarfirdquo These are made with saccharine
and colours They also produce small amount of milk based kulfi These ice creams are very
unhygienic and of low quality
42 Historical Progress of the Industry
1048766 Before 1964 Ice cream market dominated by unorganized unbranded approach
1048766 1964 Igloo started large scale organized approach under K Rahman amp Co Ltd
1048766 1965 Igloo opened up the first ice-cream parlour in Dhaka
1048766 1971 Igloo was nationalized by the government of Bangladesh after liberation
1048766 1972 In June Igloo was handed over to Bangladesh Sugar amp Food Industries Corporation
1048766 1983 Abdul Monem Ltd acquired Igloo under privatization policy
1048766 1986 Polar started operation introduced food grade plastic based packaging They
immediately became market leader with extensive campaign
1048766 1988 Dolce Vita Gelato one of the dedicated boutique operator brought premium ice cream
1048766 Early 1990s Rainbow and Snow White started extensive operation in the boutique segment
1048766 Late 1990s American Soft Ice cream started promoting the soft ice cream format
1048766 1995 Savoy was introduced but failed due to product quality though in suburban areas they
grabbed share with low price
1048766 1996 In September Igloo organized a massive marketing campaign
1048766 Introduced the first straight line extrusion ice-cream in the market
1048766 They initiated a massive campaign and became market leader after 10 years
1048766 1997 In February Igloo took a devastating decision to increase price for the cup line
1048766 Igloo not only incurred substantial financial loss but also lost the hard earned market share
The question of sustaining became a central issue
1048766 In summer Price of 11 items were revised and communicated as special discount
1048766 This instantly pushed them to the number one position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 18
1048766 1999 Kwality ice-cream entered the market
1048766 2000 Entry of the premium boutique operators like Club Gelato MoumlvenPick and
Baskin31Robbins
1048766 2002 Kwality launched an extensive campaign and started to capture the ice-cream outlets of
the city by providing freezers
1048766 2004 Kwalityrsquos number of freezers exceeded Polarrsquos and moved to second position
1048766 2005 onwards Igloo leads the market and there is immense competition among Polar and
Kwality for the coveted 2nd spot
Historical progress of this industry is of great importance Bangladesh ice cream industry has
traditionally been exposed to high quality products for a long time Igloo initiated the progress of
boutique segment (1965) but it lost its way over time The segment picked up once again in the
recent years Also high quality products and innovations in the common format segment have
created an appreciation for continuous innovation and better products in the minds of the
consumers Consumers in Bangladesh see ice cream as a fun product which requires novelty and
quality coupled with continuous hype around the brand This is why we see Kwality and Polar
could create early impacts with their entry into the industry as they came up with innovations in
product or packaging and arranged massive marketing campaigns during their launches Igloo
had to minimize their effects with similar campaigns to hold on to their position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 19
50 MARKET amp COMPETITION ANALYSIS
51 Market Description
Bangladesh ice-cream industry is growing With increasing market demand size of the industry
is growing but due to entry barriers of lengthy and complex production process and high
investment few companies enter this business Although local companies in the branded segment
have captured most of the market share small unbranded local companies own a huge market to
themselves Where branded ice cream consumers look for innovation and quality unbranded
users outside metro cities are currently inclined towards low price low quality products This
creates an opportunity for further market development on the hygiene and health platform On
the other hand the boutique industry is doing quite well with their approach towards ice cream
as a dessert item along with service of other snacks like cakes and coffee at their premises which
help them reduce seasonality effects of ice cream
With a complicated scenario in the market to analyze the industry condition and understand the
competitive realities details of market characteristics and players of both common and boutique
segments are explained in following sections However unbranded segment is excluded from
discussion as Unileverrsquos portfolio does not match the characteristics and price level of this
category
511 Market Characteristics of the Common Format Segment
A Market size
Due to promotion innovation and exposure to different cultures the consumption of ice cream
has increased As a result the total market size is expanding At present the local companies in
the common format segment have a huge market of about BDT 121 Cr This market is 16 times
larger than the boutique segment and nearly doubles the unbranded segment Over the years the
size increase of the industry shows the prospect of converting unbranded unhygienic ice cream
consumers into branded ice cream consumers However price level still remains a big problem
for the branded category as petty unbranded ice cream companies with a price range of Tk1 to
Tk5 have a total market size of BDT 79 Cr which shows a hint of high price sensitivity in lower
SEC consumers Overall market size of 220 Cr indicates that most of the people in the country
are exposed to ice cream or some kinds of derivatives of ice cream like ldquoBaarfirdquo however they
probably cannot afford higher priced icy fruit sticks (BDT 6-10) available in the branded
segment
B Competitive rivalry in the Market
Competition is not very intense among the existing five companies because the number of
operators is very small considering the total population Also complexities of production and
distribution process and other entry barriers are stopping new companies from entering the
industry Evaluation of Entry into Ice cream Business for Bangladesh Limited 20
Igloo is confident about its unbeatable first position but there is competition among other
companies such as Polar and Kwality for the 2nd position However in current market no
operator is showing much aggressive and visible activity towards growth It is expected that
recent announcement regarding introduction of ISIS diabetic ice cream by Polar in partnership
with DANONE would again create some hype in the market
Reasons behind existing level of rivalry among competitors can be attributed to following
reasons
1048766 The ice cream industry has few sellers because there is economy of scale through large-scale
production The larger firms have a cost advantage over smaller firms they can produce more
cheaply- making it hard for small firms to survive
1048766 Market is bigger than capability of current players and can accommodate them without much
trouble This is because PCC of ice cream in the country is still pretty low
1048766 This market has substantial amount of ldquobarriers to entryrdquo making it difficult for a large
number of competitors to enter the market The cost of setting up a new plant in this industry is
quite high The cost of entry works as an entry barrier
1048766 To get people to try new product the potential entrant will have to run a big competitive
advertising or massive promotional campaign which is expensive The prevailing companies
created barriers in entry for potential rivals by using extensive advertising and product
differentiation earlier which has its effects till now Another fact is that product awareness and
brand loyalty to the existing firms make it expensive for potential rivals to enter
1048766 To further elaborate present competitive reality of the industry the five competitive forces are
discussed below
1048766 The rivalry among the competing sellers is weak as market is yet to develop more
1048766 With various entry barriers not many new companies are attempting to enter this industry
1048766 As there are no direct substitute products to ice-cream the companies donrsquot face any
competition from other industries
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 1965 Igloo opened up the first ice-cream parlour in Dhaka
1048766 1971 Igloo was nationalized by the government of Bangladesh after liberation
1048766 1972 In June Igloo was handed over to Bangladesh Sugar amp Food Industries Corporation
1048766 1983 Abdul Monem Ltd acquired Igloo under privatization policy
1048766 1986 Polar started operation introduced food grade plastic based packaging They
immediately became market leader with extensive campaign
1048766 1988 Dolce Vita Gelato one of the dedicated boutique operator brought premium ice cream
1048766 Early 1990s Rainbow and Snow White started extensive operation in the boutique segment
1048766 Late 1990s American Soft Ice cream started promoting the soft ice cream format
1048766 1995 Savoy was introduced but failed due to product quality though in suburban areas they
grabbed share with low price
1048766 1996 In September Igloo organized a massive marketing campaign
1048766 Introduced the first straight line extrusion ice-cream in the market
1048766 They initiated a massive campaign and became market leader after 10 years
1048766 1997 In February Igloo took a devastating decision to increase price for the cup line
1048766 Igloo not only incurred substantial financial loss but also lost the hard earned market share
The question of sustaining became a central issue
1048766 In summer Price of 11 items were revised and communicated as special discount
1048766 This instantly pushed them to the number one position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 18
1048766 1999 Kwality ice-cream entered the market
1048766 2000 Entry of the premium boutique operators like Club Gelato MoumlvenPick and
Baskin31Robbins
1048766 2002 Kwality launched an extensive campaign and started to capture the ice-cream outlets of
the city by providing freezers
1048766 2004 Kwalityrsquos number of freezers exceeded Polarrsquos and moved to second position
1048766 2005 onwards Igloo leads the market and there is immense competition among Polar and
Kwality for the coveted 2nd spot
Historical progress of this industry is of great importance Bangladesh ice cream industry has
traditionally been exposed to high quality products for a long time Igloo initiated the progress of
boutique segment (1965) but it lost its way over time The segment picked up once again in the
recent years Also high quality products and innovations in the common format segment have
created an appreciation for continuous innovation and better products in the minds of the
consumers Consumers in Bangladesh see ice cream as a fun product which requires novelty and
quality coupled with continuous hype around the brand This is why we see Kwality and Polar
could create early impacts with their entry into the industry as they came up with innovations in
product or packaging and arranged massive marketing campaigns during their launches Igloo
had to minimize their effects with similar campaigns to hold on to their position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 19
50 MARKET amp COMPETITION ANALYSIS
51 Market Description
Bangladesh ice-cream industry is growing With increasing market demand size of the industry
is growing but due to entry barriers of lengthy and complex production process and high
investment few companies enter this business Although local companies in the branded segment
have captured most of the market share small unbranded local companies own a huge market to
themselves Where branded ice cream consumers look for innovation and quality unbranded
users outside metro cities are currently inclined towards low price low quality products This
creates an opportunity for further market development on the hygiene and health platform On
the other hand the boutique industry is doing quite well with their approach towards ice cream
as a dessert item along with service of other snacks like cakes and coffee at their premises which
help them reduce seasonality effects of ice cream
With a complicated scenario in the market to analyze the industry condition and understand the
competitive realities details of market characteristics and players of both common and boutique
segments are explained in following sections However unbranded segment is excluded from
discussion as Unileverrsquos portfolio does not match the characteristics and price level of this
category
511 Market Characteristics of the Common Format Segment
A Market size
Due to promotion innovation and exposure to different cultures the consumption of ice cream
has increased As a result the total market size is expanding At present the local companies in
the common format segment have a huge market of about BDT 121 Cr This market is 16 times
larger than the boutique segment and nearly doubles the unbranded segment Over the years the
size increase of the industry shows the prospect of converting unbranded unhygienic ice cream
consumers into branded ice cream consumers However price level still remains a big problem
for the branded category as petty unbranded ice cream companies with a price range of Tk1 to
Tk5 have a total market size of BDT 79 Cr which shows a hint of high price sensitivity in lower
SEC consumers Overall market size of 220 Cr indicates that most of the people in the country
are exposed to ice cream or some kinds of derivatives of ice cream like ldquoBaarfirdquo however they
probably cannot afford higher priced icy fruit sticks (BDT 6-10) available in the branded
segment
B Competitive rivalry in the Market
Competition is not very intense among the existing five companies because the number of
operators is very small considering the total population Also complexities of production and
distribution process and other entry barriers are stopping new companies from entering the
industry Evaluation of Entry into Ice cream Business for Bangladesh Limited 20
Igloo is confident about its unbeatable first position but there is competition among other
companies such as Polar and Kwality for the 2nd position However in current market no
operator is showing much aggressive and visible activity towards growth It is expected that
recent announcement regarding introduction of ISIS diabetic ice cream by Polar in partnership
with DANONE would again create some hype in the market
Reasons behind existing level of rivalry among competitors can be attributed to following
reasons
1048766 The ice cream industry has few sellers because there is economy of scale through large-scale
production The larger firms have a cost advantage over smaller firms they can produce more
cheaply- making it hard for small firms to survive
1048766 Market is bigger than capability of current players and can accommodate them without much
trouble This is because PCC of ice cream in the country is still pretty low
1048766 This market has substantial amount of ldquobarriers to entryrdquo making it difficult for a large
number of competitors to enter the market The cost of setting up a new plant in this industry is
quite high The cost of entry works as an entry barrier
1048766 To get people to try new product the potential entrant will have to run a big competitive
advertising or massive promotional campaign which is expensive The prevailing companies
created barriers in entry for potential rivals by using extensive advertising and product
differentiation earlier which has its effects till now Another fact is that product awareness and
brand loyalty to the existing firms make it expensive for potential rivals to enter
1048766 To further elaborate present competitive reality of the industry the five competitive forces are
discussed below
1048766 The rivalry among the competing sellers is weak as market is yet to develop more
1048766 With various entry barriers not many new companies are attempting to enter this industry
1048766 As there are no direct substitute products to ice-cream the companies donrsquot face any
competition from other industries
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 2000 Entry of the premium boutique operators like Club Gelato MoumlvenPick and
Baskin31Robbins
1048766 2002 Kwality launched an extensive campaign and started to capture the ice-cream outlets of
the city by providing freezers
1048766 2004 Kwalityrsquos number of freezers exceeded Polarrsquos and moved to second position
1048766 2005 onwards Igloo leads the market and there is immense competition among Polar and
Kwality for the coveted 2nd spot
Historical progress of this industry is of great importance Bangladesh ice cream industry has
traditionally been exposed to high quality products for a long time Igloo initiated the progress of
boutique segment (1965) but it lost its way over time The segment picked up once again in the
recent years Also high quality products and innovations in the common format segment have
created an appreciation for continuous innovation and better products in the minds of the
consumers Consumers in Bangladesh see ice cream as a fun product which requires novelty and
quality coupled with continuous hype around the brand This is why we see Kwality and Polar
could create early impacts with their entry into the industry as they came up with innovations in
product or packaging and arranged massive marketing campaigns during their launches Igloo
had to minimize their effects with similar campaigns to hold on to their position
Evaluation of Entry into Ice cream Business for Bangladesh Limited 19
50 MARKET amp COMPETITION ANALYSIS
51 Market Description
Bangladesh ice-cream industry is growing With increasing market demand size of the industry
is growing but due to entry barriers of lengthy and complex production process and high
investment few companies enter this business Although local companies in the branded segment
have captured most of the market share small unbranded local companies own a huge market to
themselves Where branded ice cream consumers look for innovation and quality unbranded
users outside metro cities are currently inclined towards low price low quality products This
creates an opportunity for further market development on the hygiene and health platform On
the other hand the boutique industry is doing quite well with their approach towards ice cream
as a dessert item along with service of other snacks like cakes and coffee at their premises which
help them reduce seasonality effects of ice cream
With a complicated scenario in the market to analyze the industry condition and understand the
competitive realities details of market characteristics and players of both common and boutique
segments are explained in following sections However unbranded segment is excluded from
discussion as Unileverrsquos portfolio does not match the characteristics and price level of this
category
511 Market Characteristics of the Common Format Segment
A Market size
Due to promotion innovation and exposure to different cultures the consumption of ice cream
has increased As a result the total market size is expanding At present the local companies in
the common format segment have a huge market of about BDT 121 Cr This market is 16 times
larger than the boutique segment and nearly doubles the unbranded segment Over the years the
size increase of the industry shows the prospect of converting unbranded unhygienic ice cream
consumers into branded ice cream consumers However price level still remains a big problem
for the branded category as petty unbranded ice cream companies with a price range of Tk1 to
Tk5 have a total market size of BDT 79 Cr which shows a hint of high price sensitivity in lower
SEC consumers Overall market size of 220 Cr indicates that most of the people in the country
are exposed to ice cream or some kinds of derivatives of ice cream like ldquoBaarfirdquo however they
probably cannot afford higher priced icy fruit sticks (BDT 6-10) available in the branded
segment
B Competitive rivalry in the Market
Competition is not very intense among the existing five companies because the number of
operators is very small considering the total population Also complexities of production and
distribution process and other entry barriers are stopping new companies from entering the
industry Evaluation of Entry into Ice cream Business for Bangladesh Limited 20
Igloo is confident about its unbeatable first position but there is competition among other
companies such as Polar and Kwality for the 2nd position However in current market no
operator is showing much aggressive and visible activity towards growth It is expected that
recent announcement regarding introduction of ISIS diabetic ice cream by Polar in partnership
with DANONE would again create some hype in the market
Reasons behind existing level of rivalry among competitors can be attributed to following
reasons
1048766 The ice cream industry has few sellers because there is economy of scale through large-scale
production The larger firms have a cost advantage over smaller firms they can produce more
cheaply- making it hard for small firms to survive
1048766 Market is bigger than capability of current players and can accommodate them without much
trouble This is because PCC of ice cream in the country is still pretty low
1048766 This market has substantial amount of ldquobarriers to entryrdquo making it difficult for a large
number of competitors to enter the market The cost of setting up a new plant in this industry is
quite high The cost of entry works as an entry barrier
1048766 To get people to try new product the potential entrant will have to run a big competitive
advertising or massive promotional campaign which is expensive The prevailing companies
created barriers in entry for potential rivals by using extensive advertising and product
differentiation earlier which has its effects till now Another fact is that product awareness and
brand loyalty to the existing firms make it expensive for potential rivals to enter
1048766 To further elaborate present competitive reality of the industry the five competitive forces are
discussed below
1048766 The rivalry among the competing sellers is weak as market is yet to develop more
1048766 With various entry barriers not many new companies are attempting to enter this industry
1048766 As there are no direct substitute products to ice-cream the companies donrsquot face any
competition from other industries
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
the other hand the boutique industry is doing quite well with their approach towards ice cream
as a dessert item along with service of other snacks like cakes and coffee at their premises which
help them reduce seasonality effects of ice cream
With a complicated scenario in the market to analyze the industry condition and understand the
competitive realities details of market characteristics and players of both common and boutique
segments are explained in following sections However unbranded segment is excluded from
discussion as Unileverrsquos portfolio does not match the characteristics and price level of this
category
511 Market Characteristics of the Common Format Segment
A Market size
Due to promotion innovation and exposure to different cultures the consumption of ice cream
has increased As a result the total market size is expanding At present the local companies in
the common format segment have a huge market of about BDT 121 Cr This market is 16 times
larger than the boutique segment and nearly doubles the unbranded segment Over the years the
size increase of the industry shows the prospect of converting unbranded unhygienic ice cream
consumers into branded ice cream consumers However price level still remains a big problem
for the branded category as petty unbranded ice cream companies with a price range of Tk1 to
Tk5 have a total market size of BDT 79 Cr which shows a hint of high price sensitivity in lower
SEC consumers Overall market size of 220 Cr indicates that most of the people in the country
are exposed to ice cream or some kinds of derivatives of ice cream like ldquoBaarfirdquo however they
probably cannot afford higher priced icy fruit sticks (BDT 6-10) available in the branded
segment
B Competitive rivalry in the Market
Competition is not very intense among the existing five companies because the number of
operators is very small considering the total population Also complexities of production and
distribution process and other entry barriers are stopping new companies from entering the
industry Evaluation of Entry into Ice cream Business for Bangladesh Limited 20
Igloo is confident about its unbeatable first position but there is competition among other
companies such as Polar and Kwality for the 2nd position However in current market no
operator is showing much aggressive and visible activity towards growth It is expected that
recent announcement regarding introduction of ISIS diabetic ice cream by Polar in partnership
with DANONE would again create some hype in the market
Reasons behind existing level of rivalry among competitors can be attributed to following
reasons
1048766 The ice cream industry has few sellers because there is economy of scale through large-scale
production The larger firms have a cost advantage over smaller firms they can produce more
cheaply- making it hard for small firms to survive
1048766 Market is bigger than capability of current players and can accommodate them without much
trouble This is because PCC of ice cream in the country is still pretty low
1048766 This market has substantial amount of ldquobarriers to entryrdquo making it difficult for a large
number of competitors to enter the market The cost of setting up a new plant in this industry is
quite high The cost of entry works as an entry barrier
1048766 To get people to try new product the potential entrant will have to run a big competitive
advertising or massive promotional campaign which is expensive The prevailing companies
created barriers in entry for potential rivals by using extensive advertising and product
differentiation earlier which has its effects till now Another fact is that product awareness and
brand loyalty to the existing firms make it expensive for potential rivals to enter
1048766 To further elaborate present competitive reality of the industry the five competitive forces are
discussed below
1048766 The rivalry among the competing sellers is weak as market is yet to develop more
1048766 With various entry barriers not many new companies are attempting to enter this industry
1048766 As there are no direct substitute products to ice-cream the companies donrsquot face any
competition from other industries
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Igloo is confident about its unbeatable first position but there is competition among other
companies such as Polar and Kwality for the 2nd position However in current market no
operator is showing much aggressive and visible activity towards growth It is expected that
recent announcement regarding introduction of ISIS diabetic ice cream by Polar in partnership
with DANONE would again create some hype in the market
Reasons behind existing level of rivalry among competitors can be attributed to following
reasons
1048766 The ice cream industry has few sellers because there is economy of scale through large-scale
production The larger firms have a cost advantage over smaller firms they can produce more
cheaply- making it hard for small firms to survive
1048766 Market is bigger than capability of current players and can accommodate them without much
trouble This is because PCC of ice cream in the country is still pretty low
1048766 This market has substantial amount of ldquobarriers to entryrdquo making it difficult for a large
number of competitors to enter the market The cost of setting up a new plant in this industry is
quite high The cost of entry works as an entry barrier
1048766 To get people to try new product the potential entrant will have to run a big competitive
advertising or massive promotional campaign which is expensive The prevailing companies
created barriers in entry for potential rivals by using extensive advertising and product
differentiation earlier which has its effects till now Another fact is that product awareness and
brand loyalty to the existing firms make it expensive for potential rivals to enter
1048766 To further elaborate present competitive reality of the industry the five competitive forces are
discussed below
1048766 The rivalry among the competing sellers is weak as market is yet to develop more
1048766 With various entry barriers not many new companies are attempting to enter this industry
1048766 As there are no direct substitute products to ice-cream the companies donrsquot face any
competition from other industries
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 As the number of suppliers is very low and the companies especially Igloo as the best product
enjoys high bargaining power or leverage over rivals But some of the companies such as Savoy
are concentrating on increasing profit margin of the retailers for securing a more prominent
position in the market
1048766 Mainly consumers or buyers decide the pricing Keeping in mind the various buying power of
people the companies decide the price of each items Price of the Items that have the most
market demand is kept low so that they are in the reach of the general customers By lowering
the price some companies such as Savoy are trying to maintain a competitive edge
Evaluation of Entry into Ice cream Business for Bangladesh Limited 21
C Market Sales and Growth Rate
Sales information of the five existing companies for the current years shows the following trend
Company Name
2007
2008
2009
Total Market
11307
12120
13122
Igloo
5785
6086
6425
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Polar
168
1835
2019
Kwality
306
335
374
Savoy
388
415
458
Milk Vita
394
434
488
Table 9 Market Sales and Growth Rate of Branded Common Format Market
Volume based market size shows the following scenario prevailing in the Bangladesh market in
2009
Company Name
Single Vol (000 Ltrs)
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Multi Vol (000 Ltrs)
Total Vol (000 Ltrs)
Total Market
32759
42967
7573
Igloo
16760
21983
3874
Polar
4867
6384
1125
Kwality
8865
11628
2049
Savoy
1124
1474
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
260
Milk Vita
1141
1497
264
Table 10 Volume Based Market Size
The total volume of the branded common format ice cream industry is 7500 Tons of which more
than 50 belongs to Igloo followed by Kwality with 27
D Market Share and Size of the rivals
Market share data for all the local companies show a trend where Igloo is the biggest ice-cream
company dominating with a huge market share Although even 1-2 years ago there was intense
competition between Kwality and Polar but now it seems that Kwality is 2nd largest ice-cream
manufacturing company in Bangladesh Polar is in the 3rd position with Savoy and Milk Vita
trailing in the market Market share percentage over the years is presented in the following table
Company Name
2007
2008
2009
Igloo
50
5031
5116
Kwality
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
256
2666
2706
Polar
17
161
1485
Milk Vita
34
332
348
Evaluation of Entry into Ice cream Business for Bangladesh Limited 22
Savoy
39
365
343
Table 11 Market Share of Competitors
E Geographic Sales Orientation
Ice cream still continues to be a city-oriented product and its demand is comparatively low in the
rural areas Reasons behind this are electricity problem outside urban areas and purchasing
power of people Geographic sales orientation of the common format ice cream industry is
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
provided below
611890690480590250DhakaChittagongKhulnaComillaBarisalOthers
Figure 7 Geographic Sales Orientation
Dhaka still is the largest contributor in the ice cream segment Nevertheless over the years this
trend is shifting Areas outside Dhaka are also growing making Dhakarsquos share lower by small
percentage As urban markets are the major contributors companies design their products
keeping in mind the tastes and styles of the urban consumers Compared to the other companies
Igloo is the most expensive in the common format segment so they target only city based
customers who have the purchasing power Although other companies such as Savoy are offering
low priced product even their main target is urban people due to nation wide electricity problem
F Seasonality of Sales
Ice cream industries in warmer part of the world are highly seasonal Same is true with
Bangladesh According to secondary data sources sales seasonality looks as follows
Period Name
Months
Contribution
Super-Peak
April May June
46
Peak
March July August
36
Off-Peak
February September October November
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
15
Super Off-Peak
December January
3
Table 12 Seasonality of Ice cream Sales
This data was validated through interviews with retailers during market visit According to them
more than 75 sales of ice cream came in the hot months Another insight that could be
identified was
Evaluation of Entry into Ice cream Business for Bangladesh Limited 23
various festivals and programmes provide scope for higher volume of ice cream sales According
to companies where only 10-15 sales occurs in the winter season same amount of sales occurs
during festivals like the two Eids and Nobobarsha
G Distribution Servicing System
Mainly common format ice-cream is distributed in two methods that are directly to retail shops
and through hawkers with ice cream carts trolleys
The various channels of retail shops other than cart that serve as distribution outlets for Ice cream
are
7 Urban General Stores (UGS)
8 Urban Neighbourhood Grocer (UNG)
9 Premium General Store (PGS) SMMT
10 Confectionary Bakery
11 Modern Trade (MT)
12 Fast Food shops (Recently some fast food shops keep branded ice cream cabinets)
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Distribution details of all the companies are provided below However detail of Milk Vita is not
available as they are mainly milk producer and they have no dedicated ice cream cabinet for
retail stores and currently they are not distributing ice cream in Dhaka city
Company
Distribution Method
Frequency
No of Cabinets
No of Carts
Igloo
Distributor Cart
2 to 3 times a week
4000
100
Kwality
Distributor Cart
1 to 2 times a week
1050
20
Polar
Distributor Cart
1 to 2 times a week
800
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
50
Savoy
Company
1 to 2 times a fortnight
176
-
Milk-Vita
-
-
-
-
Table 13 Distribution Method of Market Players
Distribution Process Distribution process through both methods is described below
Retail Distribution The general distribution that is followed by companies is that distributor
sends large refrigerated trucks dedicated to specific territories These trucks are accompanied by
small refrigerated vans Main road side shops are served directly from the large truck and shops
that are inside small streets are served by the small vans
Order and delivery are done on the same day The strategy followed is that of replenishment If
the branded freezer of the company is empty they simply fill it up according to requirement of
different SKUs as the delivery people see fit However shopkeepers have to buy full cartons
(usually 24 pieces in a carton) of single serve ice cream they cannot buy in pieces
Evaluation of Entry into Ice cream Business for Bangladesh Limited 24
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Among the retail shops there are about equal numbers of branded and unbranded freezers This
is a normal scene in Dhaka where all shopkeepers require freezer to keep other cold products
However basic distribution policy is that if a shop has branded cabinet of a company they
cannot keep competitor ice cream in that cabinet Thus penetration can be made possible in
shops where unbranded freezers are available
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT
5000 to take a freezer Maintenance of branded freezers is responsibility of the company but
electricity bill is paid by shopkeeper However Polar is not currently giving any new freezer
Kwality gave away their freezers for free however they ensured safety of their freezers by
checking background of the shopkeepers
Cart sellers Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis They also have to
buy cartons of products not pieces Kwality carts collect their ice cream from factory (Tejgaon)
or nearby distribution house Cart sellers contribute around BDT 3000 sales in a day and
generally sell at BDT 1-2 higher than set price of each product
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in
daily demand of ice cream or if they get the opportunity to sell at parties programs or any open
air event (Wedding at community centres or outside cultural programs at auditoriums) If cart
sellers need replenishment of stock they even take service more than once in a day either
revisiting showroom house or they call up company delivery people to serve them at their
location if there is opportunity for selling more ice cream
Policy regarding Damaged Ice cream All the ice cream producers have very good relationship
with the shopkeepers If the retailers have refrigeration problem company takes ice cream back
until the problem is fixed whether it is stored in branded freezer or not Also if any ice cream
gets damaged or there is bacterial formation company takes them back Usual return time varies
from 15-30 days For large sellers however they take less time
Payment Method for Ice cream Purchase All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them This
trend is seen in all channels Also all the SMMTs and MTs are given credit of one month and
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
payment is made by cheque Other small shopkeepers have to purchase with cash However
according to shopkeepers Igloo is currently trying to cut down on credit sales as they believe
there is a consumer pull for their brand Companies like Polar and Kwality also give special
commission to large sellers Polar gives 5 commission on every bill
Evaluation of Entry into Ice cream Business for Bangladesh Limited 25
H Technology and Innovation
Technological advancement in the ice cream industry has been very rapid Starting with stick
mould and filler ice cream production the companies have come a long way Assessing the
consumer choice and demand the companies are introducing new products very often Improved
and new technology is used for faster production and better quality Igloo is trying to meet the
international standards and launching products such as Sundae Cornelli and Nuggets Other
companies are also introducing new flavours suitable for their target segments Igloo has both the
ISO and the HACCP certifications These were awarded in the year 2003 due to their relentless
pursuit of quality and innovation In September 1996 Igloo introduced the 3D Mould line and
straight line extrusion technology for the first time in the subcontinent Basically with Igloorsquos
pursuit all the modern technologies and quality innovations are available in the market
I Production Capacity
Current production capacity of the major players in the common format ice cream segment is
estimated to be as follows
Name
Capacity (Ltrs day)
Total Production (000 Ltrs)
Required Capacity (at 300 production days )
Estimated unutilized capacity (Ltrs day)
Igloo
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
22000
387433
12914
9086
Polar
6500
112513
3750
2750
Kwality
12100
204934
6831
5269
Savoy
1560
25985
866
694
Milk Vita
1330
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
26387
880
450
Table 14 Production Capacity of Current Market Players
From the table we can see that all the ice cream manufacturers are operating with unutilized
capacity However one point to be noted is that different ice cream SKUs require different
amount of item to be produced Exact machine production capacity at litre per day does not
represent the accurate scenario Nevertheless it can be safely assumed that all the manufacturers
have unused machine capacity at their premises Moreover the larger players like Polar and
Kwality have new technology available at their premises Kwality bought second hand machines
from Thailand but both Igloo and Polar bought theirrsquos from Italy and Denmark
J Products and Pricing
Products The products in the ice-cream market are differentiated A few firms dominate the
market but an endless variety of ice creams are offered to the consumers Igloo pioneers all
major innovations in the market The products that are available in the market can be classified
into single serving and multiple serving groups Which are then categorized based on functional
attributes designs These are
Single
Stick
Normal mould 3D mould extrusion
Evaluation of Entry into Ice cream Business for Bangladesh Limited 26
Cup and Sundae
Flat cup long cup
Cone
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Normal cone (vanilla strawberry etc) premium cone (Ripple)
serving
Innovative Fillers
Snowball Animal shaped containers sandwich nuggets etc
Container
05 ltr 1 ltr and 2 ltr containers
Multiple serving
Family Pack
Assorted packs cakes shahi kulfi etc
Table 15 Ice cream Serve types
Among all the products available in the market most selling SKU for all the companies is Choc-
bar stick and highest selling flavour is Vanilla Following are the ranks of most selling SKUs and
flavours
SKU Name
Rank
Choc-bar (70 ml)
1
Vanilla Cup (100 ml)
2
Vanilla Box (05 and 1 Ltr)
3
Lemon Lolly (70 ml)
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
4
Normal Cone
5
Flavour
Rank
Vanilla
1
Chocolate
2
Strawberry
3
Ripple
4
Mango
5
Table 16 Rank of SKUs Table 17 Rank of Flavours
Choc-bar is one of the earliest vanilla based chocolate coated SKU that has dominated the
market strongly over the years Shopkeepers could not provide an exact percentage on SKU
based sales contribution Most of them ranked the SKUs and flavours according to sequence
shown in the above table Also according to newspapers and secondary sources Vanilla is the
most selling flavour with 60 sales contribution According to secondary sources percentage
sales contribution of various types of SKUs in the common format segment are as follows
Type of Ice cream
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Value Share
Volume Share
Impulse dairy ice cream
514
443
Impulse water ice cream
112
138
Take-home dairy ice cream
374
419
Table 18 Volume Share of Different Serve Types
Impulse dairy ice cream provides more value share as price per litre is higher than take home
multiple serving ice creams Impulse water ice cream shows a similar trend as of take home ice
cream
Pricing Product pictures and price ranges of each category are provided below Evaluation of
Entry into Ice cream Business for Bangladesh Limited 27
Normal Premium Price Tk12 Tk20 Tk25 Cup amp Sundae Normal Cup Sundae Premium Cup
Price Tk20 Tk25 Cone Normal Premium PriceTk20 Tk25Innovative Fillers PriceLtr Tk100
Tk175 Container Normal Premium PriceLtrTk150 Tk 175 Tk 190 Family Packs Kulfi Mixed
Pack Cake Single ServingMultipleServingNormal Ice Fruit 3D Mould Premium Extrusion Price
Tk10 Tk15 Tk15 Tk20Stick Normal Cream
Figure 8 Serve Types and Pricing
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
As it can be seen from the above chart all impulse ice creams are priced within the range of
BDT 10 to 25 Other take home multiple servings are priced within the range of BDT 50 (05
Litres) to BDT 220 (2 Litres) Another noticeable factor in price is that there are both normal and
premium flavours in all types of ice creams
K Firms as Price Setters
The firms have capability to affect the market price to be low as profit margin is very high If
Igloo reduces the price of an item below the prevailing price level in order to increase its sales
its competitors will fear that their customers will go away from them to buy Igloo products To
retain their customers they will be forced to match the price cut of Igloo Historically this has
been proven to be true However due to price sensitivity companies cannot drastically increase
price even if they provide higher quality of product It was seen in 1997 when Igloo increased
price of 11 SKUs and faced drastic sales fall during that time It shows that the industry might
welcome overall industry price increase but not individual company price increase
L Promotion
The promotion scenario in the industry is not quite organized as of now Even proper data
regarding promotional expenditure is not available from research sources The reason being
there is not much consumer related activity seen in the market After Kwalityrsquos introduction in
the market in 1999 Igloo went on with massive Television promotion of their new products that
were available at that time
Evaluation of Entry into Ice cream Business for Bangladesh Limited 28
However in current times there is no TVC running from any company Companies promote their
launches mainly through billboards and newspaper promotions which is currently the most used
source of consumer promotion Some promotional activities that were done by the companies
over the years are listed below
Consumer Promotions
1 Larger players like Igloo and Kwality goes on with campaigns like ldquoGift on stickrdquo where
various prizesrsquo names are written on the sticks and consumers can get them
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
a Igloo ran a program on their launch of Macho variant where gift varied from cricket bat to
personal computer
b Igloo had a program in 2006 where gifts on sticks varied from Bangkok visit to sunglass
c Igloo ran one campaign in 2007 where gold bars were given on purchasing Choc-bar
d Kwality ran a similar program in 2008 where gifts varied from wrist watches to motorcycle
2 Some companies ran consumer TTS and gift programs where company products were given
free
a Igloo had a program in 2006 where Igloo butter was given free on purchasing Igloo ice cream
cake
b Kwality ran a program in 2008 where one SKU was given as gift with another SKU randomly
c ldquoCone Ice cream at your Homerdquo program was run by Igloo in 2002 where six cone biscuits
were given free with purchase of one litre ice cream
3 Media placement is another form of placement done by larger companies
a Igloo purchased ldquoGlimpse into World Cup Resultrdquo space in daily newspapers during World
Cup Football 2002
4 One interesting program is done by only Igloo in Bangladesh They did it in June 2006 The
program was ldquoIgloo Ice cream Festivalrdquo with main attractions of ldquoGet as much ice cream as you
want for BDT 200rdquo ldquoGet a Fantasy Kingdom Entry ticket with each Entry Couponrdquo ldquoLucky
Drawrdquo and ldquoCelebrity Addardquo
Trade Promotions
5 Trade promotions are mainly given to ldquoHighest retail purchasersrdquo and also based on time
bound trade schemes where various slabs of purchase amount are mentioned for different prizes
a Igloo takes their highest purchasers to visit countries like Singapore and Thailand
b Savoy has a purchase slab scheme where first prize is table fan
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
c Polar gives special sales commission to their highest purchasers (around 5)
Evaluation of Entry into Ice cream Business for Bangladesh Limited 29
M Players in the Common Format Segment
Branded common format ice cream segment is constituted of five players only Among them
Igloo is the largest player and Milk Vita is the smallest The following sections detail the basic
company detail of all the companies with special emphasis on Igloo the market leader
Igloo
The pioneering ice-cream company in Bangladesh started its operation in 1964 in Chittagong
under K Rahman amp Co Limited (KRC) with a small factory inside Coca Cola bottling factory of
KRC After the independence of Bangladesh in 1971 Igloo was taken over by the government of
Bangladesh Later in 1983 Abdul Monem Limited purchased the entire production setup of KRC
Limited including Coca-Cola bottling plant and Igloo ice-cream factory After taking full charge
of Igloo ice-cream by Abdul Monem Limited the manufacturing operations continued in
Chittagong till 1990 Although Dhaka fetched the maximum share of the total revenue the
distribution cost increased tremendously in the process of meeting the demand of Dhaka city To
cope with the distribution problem and handle Polar threat Abdul Monem Limited transferred
the factory to Dhaka changed the ice-cream packaging from the conventional paper to plastic
and expanded their market and distribution operation The new factory of Igloo was setup at
Shyampur Narayanganj and was nine kilometres away from the Motijheel office The company
apart from catering the capital city started to expand its operations in Comilla (1991) Khulna
(1992) and North Bengal (1993) These markets were served directly from Dhaka since the
storage facilities were not developed till then The company is now the market leader since 1997
with clear market share victory over others with sweeping 51 share It is to be noted that Igloo
is also a player in the boutique segment with three parlours (2 in Dhaka and 1 in Chittagong)
Product Range Igloo offers the widest choice of ice cream more than any other competitor in
the market Igloo is offering a total of fifty items including normal premium and novelty cup
stick and family pack items Igloo has thirty flavours more than anyone else in the industry and
is continuously launching new and innovative delicacies
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Igloo ice-cream can be classified in six groups They are
Stick
Macho Choc-bar Mini Choc Clown Mega Shell n core Lolly
Cone
Cornelli 2 in one Cornelli classic
Cup
Shahi kulfi Vanilla Strawberry Mango Snow ball
Container
Vanilla Strawberry Mango Chocolate Coffee Diet Vanilla Tutti Frutti Ripple Pralin
Pistachio
Innovative
Nuggets Sandwich
Family
Ripple cake Party time Shahi Kulfi
Table 19 Products of Igloo
Single serve stick cups and cone items are easy to carry around and convenient to eat which
makes it most sold The core target segment of ice-cream is 6-24 years and this generation is
always on the Evaluation of Entry into Ice cream Business for Bangladesh Limited 30
move and thus prefers independent cone stick or cup items As Igloo initiated the concept of ice-
cream as a family product they offer some items to be enjoyed with the whole family
Quality and Innovation Igloo is committed to maintaining the highest quality standard through
its continuous RampD activities The major ingredients raw materials and packing materials are
procured from the best European sources Strict quality control is done at every stage of the
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
manufacturing process from procurement of material mixing material flow ice cream making
packaging storing (at main warehouse) distributing and market shelving by the Quality Control
Department Current supply chain for various materials of Igloo is as follows Australia (Milk
Powder) Denmark (Ingredients emulsifiers amp stabilizers) China amp UAE (Food grade sticks)
China Denmark Singapore amp Thailand (Food grade packing materials)
Figure 9 Igloo Supply Chain
Distribution Network Their distribution network is stretched all over the country with a long
fleet of refrigerated vans Firstly the ice cream products are stored at the central warehouse of
the factory and from there they are distributed through the haulage vehicle to the operational
centres located in Dhaka Chittagong Comilla Rajshahi Barisal Bogra Rangpur and Khulna
Strictest cold chain maintenance during the distribution and selling of the ice creams is ensured
Their distribution process is as follows Manufacture Stored at -24c Transported by Refrigerated
trucks at -Reaches amp Preserved in Eight regional stores Refrigerated vehicles (Distributors)Retail
outlets (Deep freezers)
Figure 10 Distribution Process of Igloo
Evaluation of Entry into Ice cream Business for Bangladesh Limited 31
Trolley Operation Igloo also operates through trolleys for extending its reach to consumers at
the furthest points The trolleys are operated near schools alleys streets parks etc and play
rhythmic music to attract the consumers These are very colourfully decorated with Igloo
umbrella and the puller wears specific uniforms Igloo was the first in introducing and operating
these trolleys in Bangladesh for any Fast Moving Consumer Goods (FMCG) Igloo has around
125 trolleys operating throughout the country Individual trolleys are provided with a regular
supply of igloo ice creams
Marketing The marketing commitment of Igloo is based on the relationship with its customers
and consumer by not only manufacturing the highest quality product but also delivering the
product by maintaining this quality To satisfy the ever-changing needs of the customer Igloo
has regularly launched new ice creams and introduced new flavours And this commitment has
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
positioned Igloo as the market-leading brand by gaining the consumers trust with the positioning
as ldquoA WORLD OF GREAT TASTErdquo
Facilities and Logistics at a glance As of 2009 following are the facilities and logistics enjoyed
by the company
Factory location
Dhaka
Production Lines
4
Packages
Stick Cup Family pack Others (Nuggets and sandwich)
Machine suppliers
1048766 Mark-Italy
1048766 Tetra Pak(Hoyer)-Denmark
1048766 Sabore Denmark
1048766 Hass- Austria
Machine models
1048766 Freemark 1100 Italy
1048766 FM 3000 FM 6000 Italy
1048766 SL600 Denmark
Cone baking
Hass- Austria
Chocolate making
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Macentyre-UK
Coverage
Nationwide
Operational centre
10
Total market vehicles
30
Distribution channel
Directthrough appointed distributors
Outlet service
7500
Injected deep freezers
4000
Trolley operations
125
Warehouse no
8
Table 20 Igloo Facilities and Logistics
Kwality
Kwality is currently the second largest ice cream manufacturer of the country The mother
company for the Kwality brand is Sanowara Drinks amp Beverages Ltd a sister concern of
Sanowara Group The company is famous for powdered milk brands Red Cow and Diploma in
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Bangladesh The drinks and beverage concern of Sanowara made an entry into the market in
1997 with ldquoYesrdquo brand drinking water and launched the ice cream brand in 1999 With heavy
communication and novelty products it Evaluation of Entry into Ice cream Business for
Bangladesh Limited 32
successfully removed Polar from the second place with a current market share of 27 The
company also operates in the boutique segment with two parlours in Dhaka and Chittagong
Kwality ice cream factory is situated in Chittagong with a floor space of 35000 sft and fully
automated machinery wrapping mix machinery equipments from Italy having capacity of
around 20000 litres of ice cream per shift The ice cream factory employs 140 people The
company is ISO 9001-2000 certified
Kwality was the first true competitor for Igloo products with some major innovation in product
design and communication but their quality is perceived to be lower in the minds of the
consumers and they do not have extrusion ice cream The product prices are also similar to that
of Igloo but they charge a bit lower than Igloo in premium multiple servings However during
market visits it was seen that shops that keep only Kwality or Igloo and Kwality both they can
sell Kwality too although the sales amount is lower than that of Igloo People who look for Igloo
shopkeepers give them that directly but if they get a chance and Kwality ice cream stock is high
they also push Kwality to dry the stock out This gives an indication that market is larger than
what the current players are capable of serving even in Dhaka
Kwality follows a similar distribution model like Igloo but distribution frequency is lower and
amount of cart sellers is limited to 25 and they operate only in Dhaka
Polar
Once a giant in the industry Dhaka Ice Cream Industries Ltd introduced the first hygienically
packed ice cream in Bangladesh in 1987 and the brand name Polar was thus born In the early
days the company started ice cream business with a wide range of products and a variety of
flavours in Dhaka city In 1988 the company started its distribution in the city of Chittagong
then Bogra and continued to cover more cities Presently Polar ice cream is available
throughout Bangladesh The company today trails in the market with 15 market share in the
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
common format segment Recently Polar has announced launch of ISIS diabetic ice cream with
support from DANONE to turn around in the market
The company has its head office as well as a modern large-scale industrial plant in Dhaka Polar
ice cream is made with Danish expertise using Danish equipment and technology The
production activities and quality control measures are supervised and managed by Danish
experts Polar offers a wide range of delicious flavours and tastes made by ingredients imported
from Europe
Dhaka Ice Cream at present has 3 cold stores in Dhaka Chittagong and Bogra in Bangladesh
From Dhaka cold store they distribute ice creams in Mymensingh Tangail Jamalpur Sherpur
Kishoreganj Netrakona Comilla Narsingdi Barisal Madaripur Agaeljhara Faridpur Magura
Chuadanga Jessore Satkhira Khulna Pirojpur and Sylhet through their distributors In case of
long distance delivery points the company uses auto cooling freezer van
Evaluation of Entry into Ice cream Business for Bangladesh Limited 33
In Dhaka city they distribute ice creams directly to retail stores in freezer vans Besides that
they have several distributors at different points of the city Distributors cover their individual
areas where company is not able to supply directly in their freezer vans Similar model is
followed by the company to distribute ice cream from their other cold storages through out the
country For storing and selling ice creams in retail stores the company like the other players
arranges a deep freezer with the Polar logo and canopy light box
In addition to this distribution the company also undertakes home delivery of ice creams for
special occasions
Savoy
Savoy Ice-cream brand is owned by Sena Kalyan Sangstha (SKS) Group of industries It started
its journey in March 1995 with a factory in Tejgaon Dhaka Yearly turnover is estimated at BDT
388 crores with a market share of roughly 35
The factory has been established with Sonali Bank finance at 6040 equity ratio The total
production capacity of the factory has been estimated at 2400 litres of Ice-cream per day Total
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
land area of the factory premise is 116 Bigha with 8000 sft area covered with a total project cost
of BDT 144 The factory employs 73 people
Product ranges of the company include all the basic designs and flavours of the industry
However the company has not been much of an innovator in the industry Their product quality
is substantially low than that of other players and they price their products at 10-15 lower than
the other competitors The company imports raw materials mainly from Europe The general raw
materials are Euro cream Skimmed Milk Powder Cocoa Powder and Flavour (Vanilla Mango
and Strawberry) Colour (Yellow Red Chocolate and Green) Ripple Sauce Cheney Fruit Palm
Kernel Oil Anhydrous Butter Oil (Ghee) and Sugar etc
Milk Vita
Milk Vita is one of the most famous brand names in Bangladesh for its liquid dairy milk Owned
by Bangladesh Milk Producersrsquo Co-operative Union Limited (BMPCUL) the company came in
the market with proper dairy milk ice cream in form of cups and choc-bar With a production
capacity of around 1600 litres per day the company is trailing in the market place with 3
market share
Although the Milk Vita Choc-bar was perceived to be extremely tasty by consumers they
probably could not do well due price competition Currently they do not even distribute ice
cream in Dhaka However their presence is seen in outskirts of Dhaka and other nearby towns
If the current market situation prevails Milk Vita would lose their remaining market share and
other companies would benefit especially Igloo However one of the advantages of Milk Vita
remains to be
Evaluation of Entry into Ice cream Business for Bangladesh Limited 34
their nation wide milk supply network They have skimmed milk powder production plant that
Igloo does not have Thus they can combat the seasonality of milk supply that Igloo with its
huge requirement of milk cannot
Strengths and Weaknesses of Competitors
Company
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Strengths
Weaknesses
Igloo
1048766 Strong brand image
1048766 High product quality
1048766 Highest no of variety
1048766 Strong distribution network
1048766 Highest visibility
1048766 Strong promotion
1048766 High production capacity
1048766 Presence of extrusion ice cream
1048766 Items are generally a bit pricy
1048766 Igloo does not give free freezers like other companies
1048766 Reluctant in recent times regarding innovation
1048766 Local sourcing of liquid milk does not meet demand
1048766 Failure to use ERP technology slowing decision making
Kwality
1048766 Product variety
1048766 Strong promotion
1048766 Free freezer distributed
1048766 Presence in all price segments
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 High production capacity
1048766 Weak distribution
1048766 Lower exposure
1048766 low amount of carts in operation
Polar
1048766 Free freezer
1048766 Quality perceived to be high compared to Kwality
1048766 Discoloured freezers
1048766 Lower exposure
1048766 Low product variety
1048766 Unused capacity
Savoy
1048766 Price is lower
1048766 Discoloured freezers
1048766 Low product variety
1048766 Weak distribution
1048766 Small amount of freezers
1048766 Low production capacity
Milk Vita
1048766 Quality is good due to dairy cream
1048766 Brand leverage from Milk Vita milk
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Low exposure
1048766 Low variety
Table 21 Strengths and Weaknesses of Competition
512 Market Characteristics of the Boutique Segment
With a small market of BDT 98 Cr and 567 share in the branded ice cream market the
boutique segment is currently an increasing segment in the ice cream industry Boutique
segmentrsquos history dates back to 1960s when Igloo launched boutiques in Dhaka to save
distribution cost and promote a culture of ldquoice cream eating outrdquo In later years boutiques lost
their glamour and retail common format segment picked up growth However with Dolce Vita in
the late lsquo80s craze for Italian Artisan ice cream was recreated in the market Although Dolce
Vita is failing in recent times emergence of MoumlvenPick and Club Gelato in 2000 has uplifted the
segment once again Current growth rate of the
Evaluation of Entry into Ice cream Business for Bangladesh Limited 35
segment can be estimated to be approx 20-22 (higher than the common format segment)
Following are the basic detail of all the major players in the segment with their estimated sales3
Players
Outlet
Sales (Cr Taka)
Share
Club Gelato
1
136
199
MoumlvenPick
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1
119
174
Andersenrsquos
3
119
174
Gelateria Igloo
3
119
174
Sub Zero (Kwality)
2
051
75
Baskin Robbins
1
015
22
Dolce Vita
1
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
017
25
American Soft
1
009
12
Rainbow
1
009
12
Others (off site)
089
130
Total Market
682
Table 22 Players and Shares in Boutique Segment
A Detail of Operation
General operational procedure followed by all the operators is as follows
1048766 Operating method There is a variation in operational method among the large operators
1048766 Club Gelato uses kitchen at own premise where imported ingredients and local milk (daily
special service from Milk Vita) are used to make ice cream
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 MoumlvenPick directly imports ice cream from Switzerland
1048766 Andersenrsquos Gelateria Igloo and Sub Zero produce ice cream at their factory with a mix of
imported and local ingredients
1048766 Products Around 30-35 flavours of artisan dairy ice cream are served at the premises
1048766 Most sold flavours are Vanilla Ferrero Rocher Butterscotch Chocolate Caramel etc
1048766 Other Products Larger players also serve ice cream desserts (milk shakes ice cappuccino etc)
pastries and other desserts with normal coffee and tea facility at their premises
1048766 Boutiques fight ice cream seasonality with the other products sales during off-peak ice cream
seasons Usually ice cream and other products contribute at 6040 ratio in summer and during
winter and off-peak seasons the ratio reverses
1048766 Pricing Usually the prices of products in this segment are 3-4 times higher than that of the
common format segment
1048766 Prices do not vary with flavours Variation depends on serve style (Cone tub) and use of
toppings and other ingredients (Chocolate sauce nut fruits) etc
1048766 Usual margin charged is around 50-60 over production cost Similar margin is charged for
other products like coffee ice cappuccino etc
3 Yearly sales is estimated based on companyrsquos approximate daily sales collected during
interview
Evaluation of Entry into Ice cream Business for Bangladesh Limited 36
1048766 Target Group Most of the consumers belong to SEC A and higher SEC A with DMFI of at
least BDT 20000
1048766 Foreign delegates and resident foreigners also visit these boutiques
1048766 Main purposes of visits in the boutiques are
bull Youth hangout with friends and having ice cream and ice cream derivatives
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
bull Family Family night out or eat out at a restaurant and then having dessert
bull Foreigners Having dessert after dinner
1048766 Rush time at boutiques are Afternoon 2-4 pm and at night 9-11 pm
1048766 Offsite sales Most of the large operators also sell offsite They have small freezers for off-site
1048766 Club Gelato and MoumlvenPick serves ice cream at high society parties and programmes
1048766 MoumlvenPick also has kiosks in known hotels like Sheraton
1048766 Promotion No mass promotion is done by any of the companies Word of mouth is the most
important source of promotion Posters and banners outside the premise and occasional
newspaper advertisements are used to communicate special offers
1048766 Growth Drivers Market growth is driven by image innovation quality decoration of facility
environment and special offers
1048766 Club Gelato has the image of selling true Italian dairy ice cream with an excellent hangout
environment
1048766 MoumlvenPick imports ice cream directly from Switzerland and is perceived to be of high quality
1048766 Andersenrsquos operates with the image of ice cream from Denmark
1048766 Gelateria Igloo (from Igloo) and Sub Zero (from Kwality) could not establish the premium
artisan ice cream image
B Players in the Boutique Segment
There are very few players who have significant impact in the boutique segment Detailed
information of all the major boutique segment players is provided below
Evaluation of Entry into Ice cream Business for Bangladesh Limited 37
Club Gelato
Basic Company Information
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Location Banani Road 11 (Planning for a second one in Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Area 1250 sft (including kitchen)
1048766 Owner Mr Jahangir Alam (Bangladesh)
1048766 Business Type Joint business partnership with Singapore
1048766 Staff 15 people (6 in the kitchen)
1048766 Production capacity 150 litres per day
Product Related Information
1048766 Product Italian style parlour scoop ice cream fruit juice coffee and pastries
1048766 Flavours Around 32 flavours available
1048766 Most selling Ferraro Rocher Vanilla Pistachio
1048766 Innovations New variants and ingredients are communicated by their Italian supplier and
Club Gelato decides what to take from them
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and higher SEC A
1048766 Geographic Area Diversified
1048766 Rush time 8-10 pm
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Sales and Price Information
1048766 Sales BDT 50000 (60 Ice cream 40 other desserts) daily in summer In winter however
other products sell more and thus they keep total sales at the same level
1048766 Price 750 per litre for any flavour
1048766 Sales Volume 50-60 litres per day
Supply Chain Placement Information
1048766 Milk Local sourcing from Milk Vita (4050 litres per day)
1048766 Chocolates amp Flavours Belgium France Germany
1048766 Transportation Mainly air (They can afford it due to high margin)
1048766 Contribution of various materials Flavours (30) Milk (20) other parts are water and air
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 23 Detail of Club Gelato
Evaluation of Entry into Ice cream Business for Bangladesh Limited 38
MoumlvenPick of Switzerland
Basic Company Information
1048766 Location Gulshan
1048766 Established in 2000
1048766 Seating Capacity 55
1048766 Owner Mr Arif Mahmud
1048766 Business Type Franchise of International MoumlvenPick
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Imported MoumlvenPick ice creams coffee chicken sandwich and Frappe
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Swiss Chocolate caramel Vanilla Dream Espresso Strawberry
1048766 Innovations New variants are communicated by their franchiser and they decide on flavours
that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time Afternoon- Young Adult 10 to 11 pm Foreigners
1048766 the company also serves at parties and has freezers in known hotels where their ice creams
are served
Sales and Price Information
1048766 Sales BDT 35-40000 daily in summer
1048766 Price 640 per litre for any flavour
1048766 Sales Volume 55-60 litres per day
Supply Chain Placement Information
1048766 Transportation Imported finished goods by ship
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Ship travel time 19 days
1048766 Port clearance 10 days
1048766 Safety Cushion Extra 10 days
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 24 Detail of MoumlvenPick of Switzerland
Evaluation of Entry into Ice cream Business for Bangladesh Limited 39
Andersenrsquos of Denmark
Basic Company Information
1048766 Location Gulshan (2 others in Uttara Dhanmondi)
1048766 Established in 2001
1048766 Seating Capacity 48
1048766 Owner United Group
1048766 Business Type Franchise of Australian company Andersenrsquos of Denmark
1048766 Production Tongi Factory of United Group
1048766 Production capacity 2000 litres per day in factory
1048766 Storage Capacity in Shop 150 litres
Product Related Information
1048766 Product Danish parlour scoop ice cream and coffee
1048766 Flavours Around 30 to 35 flavours available
1048766 Most selling Strawberry Butter Scotch Green
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Innovations New variants and ingredients are communicated by their franchiser and they
decide on flavours that they want
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30) (70) amp Diplomats
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A
1048766 Geographic Area Concentrated in Gulshan and nearby areas
1048766 Rush time 8 to 10 pm
Sales and Price Information
1048766 Sales BDT 10-12000 daily in summer
1048766 Price 460 per litre for any flavour
1048766 Sales Volume 40-50 litres per day
Supply Chain Placement Information
1048766 Milk 2025 kg packs are imported
1048766 Chocolates amp Flavours Imported
1048766 Butte paper Local sourcing
1048766 Transportation Ship
Promotional Materials
1048766 Materials used are near premises POS materials for promoting the parlour only
Table 25 Detail of Andersenrsquos of Denmark
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Evaluation of Entry into Ice cream Business for Bangladesh Limited 40
Gelateria Igloo
Basic Company Information
1048766 Location Banani Kemal Ataturk Avenue (Two others in GEC Mor Chittagong and Naya
Paltan)
1048766 Established in 2000
1048766 Seating Capacity 20
1048766 Production From Igloo factory in Shyampur Narayanganj
Product Related Information
1048766 Product Parlour scoop ice cream and coffee only
1048766 Flavours Around 30 flavours available
1048766 Most selling Vanilla Strawberry Chocolate Pistachio Butter Scotch Tutti Fruity
1048766 Serve type Cup Cone Glasses Box for take away
Consumer Profile
1048766 Primary Teenagers and Young Adults (18-30)
1048766 Secondary Family consumers for eat out
1048766 Income Group High income customers tentatively from SEC A and B
1048766 Geographic Area Diversified
1048766 Rush Time afternoon and evening
Sales and Price Information
1048766 Sales BDT 8000 to 10000 daily in summer Nearly one fourth in winter
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Price Varies but 350 per litre of vanilla
Promotional Materials
1048766 POS materials at the premises
Table 26 Detail of Gelateria Igloo
52 Price Comparison of Common and Boutique Segments
Price ranges of both common format and boutique segment cannot exactly be pin pointed as
products do not follow common structure and variations occur with use of toppings mixing of
flavours and use of coatings However a price comparison has been made among the brands
based on their price of per litre of vanilla flavoured ice cream in the market It appears to be as
following
Company
Price Litre Vanilla
Club Gelato
750
MoumlvenPick
640
Andersenrsquos
460
Dolce Vita
440
Igloo
100
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Kwality
100
Polar
100
Milk-Vita
90
Savoy
85
Table 27 Comparative Price Analysis
As it can be seen there is price gap within the range of BDT 100-400 Ice cream kiosks and
small scooping boutiques can operate within that range
Evaluation of Entry into Ice cream Business for Bangladesh Limited 41
60 CONSUMER ANALYSIS
61 Target Group of Ice cream
Who are the consumers of ice cream This question does not have a clear answer Ice cream is a
food for all It is the only food consumed by a human being at less than 0 degree centigrade
temperature and people of all ages feel indulged to have it However we can determine focus
target groups for both branded common format and artisan boutique ice cream Group
discussions and market visits were done to get insight into the consumers along side resources
form secondary sources Age based target group is common for both segments but variation
among the groups occur mainly based on SEC and DMFI classification
611 Geographic Group
Branded ice cream remains an urban product till date Geographically branded ice cream has
reached urban and semi urban areas up to Thana Head Quarter levels Ice cream has reached
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
areas where electricity is available Small artisan players are available in places where large
branded players have no distribution
612 Target Age Group
Age wise grouping of target consumers is as follows
1048766 Urban kids in the age group of 5-14
1048766 They mainly consume normal sticks cups cones innovative fillers and water ice creams
1048766 Urban youth in the age group of 15-24
1048766 They consume premium and extrusion sticks and cones
1048766 Urban mothers in the age group of 25-35
1048766 They determine the family purchases Even when the father purchases ice cream decision is
taken by them
Consumption pattern of various age groups are depicted in the following chart Ice cream
consumption pattern50203005 to 14 yrs15 to 24 yrs25 to 35 yrs
Figure 11 Target Group wise Consumption Pattern Evaluation of Entry into Ice cream Business
for Bangladesh Limited 42
613 Target SEC and DMFI Group
Common Format
SEC A and B is the target group for common format ice cream However with rapid increase in
price level over the years has made it a ldquohard to consumerdquo product for SEC B consumers who
belong to lower DMFI group
Boutique Format
Boutique formatrsquos higher margin and high price range makes it an exclusively SEC A ice cream
People belonging to upper and upper middle class have access to the mediocre boutiques and
only higher upper class can have premium ice creams like Club Gelato and MoumlvenPick
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Another unique target group for boutique format are the foreigners who live in Bangladesh
These people tend to visit the parlours to have ice cream as dessert especially after dinner
62 Ice cream in Consumer Lifestyle
Figure 12 Ice cream in Consumer Life style
This simple overview of ice cream in consumer lifestyle was determined based on in-depth
research analysis of UBL and validated through qualitative group discussions by the author
However detail of in-depth research is provided in a later section of this chapter
Evaluation of Entry into Ice cream Business for Bangladesh Limited 43
63 Highlights of Purchase Habit of Ice cream
631 Common Habits across Target Groups
There are some common habits that were identified in earlier researches and group discussions
with consumers Common habits mean the consumer approach towards ice cream that is seen
across all target groups eg kids youth and adult purchasers These are outlined below
1048766 Ice cream is mainly seen as a dessert or a snack Impulse ice cream is seen as a quick snack
that is consumed when it is in sight Visibility plays a big role here Regarding family packs
people see it as a post-food dessert
1048766 Ice cream purchase is commonly a planned event When the contexts arise people generally
take a bit of time to decide whether or not to have ice cream or when they want to go to a
boutique they make due considerations regarding which boutique to visit
1048766 Ice cream purchase decision is taken based on favourite flavour People tend to try out new
variants and flavours when they first see it They compare the taste with earlier experience and
when they purchase later they choose the flavour they have liked most
1048766 For In-Home segment decision is mostly taken on the flavour Generally people come up with
different flavours of choice and most voted flavour is chosen
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 People become aware of new variants or flavours mainly through word-of-mouth
Advertisement (new launches special offers and festivals) in newspaper is another source of
awareness
1048766 People are currently indifferent towards the price level of premium flavours However some
feel that price of Choc-bar or water ice creams (lolly) is a bit much If less they would have
consumed more Some also feel that companies should come up with branded ice cream in the
price range of BDT 5-8
1048766 Ice cream is purchased from nearby shops If required brand and flavour is not available 2-3
shops will be visited and then available flavour will be selected even if the required one is not
found This is done mainly not to ruin the mood for ice cream
1048766 People are very open to try new brands and flavours especially if it comes from a credible
source They would try new flavours and if they are satisfied with the taste they would repeat
purchase
1048766 Regarding boutique visits people feel that boutiques need to have a proper environment
enough flavours and other snacks
1048766 While visiting boutique with family or companion they want variation in flavours so that
they would order different flavours and taste each otherrsquos ice cream It is seen as a sign of
togetherness
1048766 Frequency of ice cream purchase varies among people It depends on peer pressure collective
family decision summer heat and attitude towards ldquoice creamrdquo itself as a product Evaluation of
Entry into Ice cream Business for Bangladesh Limited 44
632 Habits of Kids
1048766 Kids choose ice cream flavours by the look of the product (generally pictures shown in POS
materials and carts) They love colour and designs of the products let it be a common format or a
boutique ice cream
1048766 Kids (when in house) would go with the housemaid to the nearby shop choose the flavour
they want (within range of the amount given to the maid) and buy it
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 When with parents they would take the product they like even if the price is lower than some
other product However mothers play a role in this decision They would want their children not
to choose too high priced a product or coloured products
633 Habits of Youth
1048766 Young people are the main consumer of impulse ice cream They also are one of the major
consumers in the boutique segment
1048766 Young people love to try out new products that come into the market Another side of the coin
is that they are not very loyal to a brand or a flavour and tend to switch a lot
1048766 Regarding boutique visits young people go to boutiques to have an ldquoice cream hang outrdquo with
peer groups They would stay there for a longer period of time while they have their ice cream
1048766 Some times young people make milk shakes and other ice cream based desserts
634 Habits of Mothers
1048766 Mothers worry about their childrenrsquos health and they prefer ldquovanillardquo type of brands
However when price constraint occurs they go for water ice creams for their children They try
to convince their kidrsquos purchase decision
1048766 Regarding family purchase motherrsquos decision is sometimes prioritized by the whole family
64 Barriers to Ice cream Consumption
641 Emotional Barriers
1048766 Overindulge (close to sinful)
1048766 Undisciplined (no control)
1048766 Childish (licking)
1048766 Artificial Image
642 Functional Barriers
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 People of SEC B feel that ice cream is an expensive dessert (If less expensive would consume
more often)
1048766 It leads to cold cough - especially in winter rainy season
1048766 It contains artificial additives preservatives
1048766 It is very high in calories that lead to fattening
Evaluation of Entry into Ice cream Business for Bangladesh Limited 45
1048766 It does not quench ldquothirstrdquo
1048766 Less convenient (portable immediate eat)
1048766 Messy Dripping
65 Research Findings
The highlights regarding purchase habits triggers and barriers of ice cream consumption provide
a glimpse into the consumer world of ice cream industry However UBL CMI conducted a
formal research exclusively on ice cream consumers to identify
1048766 Occasions of ice cream
1048766 Frequency of ice cream consumption
1048766 Expectations from ice cream occasions
1048766 Personalities that they desire from ice cream
651 Relevant Occasions in Daily Lives of Consumers
Research question regarding ldquousual occasions of life that occurred most frequently in day-to-day
lives of the respondentsrdquo generated the following replies
Occasion
of Respondents saying Yes
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Watching TV
93
Normal Dinner At Home
91
Normal Lunch At Home
89
At Home While ReadingMusicSurfing
86
Informal Family Get Together
85
Out Of Home Hanging Out With Friends
84
Out Shopping
84
Mid-Afternoon Break At Home
83
At Home By Myself During The Day
82
Special Dinner At Home
82
Informal Dinner Out Of Home
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
82
Normal Lunch Out Of Home
82
Leisure Walk
79
Coming Home From WorkSchool
78
Special Dinner Out Of Home
78
Celebration
78
A Night In With Friends
77
At Home By Myself In The Evening
77
Special Lunch Out Of Home
76
Mid-Afternoon Break Out Of Home
75
Special Lunch At Home
73
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Day out with Partner
72
Midmorning Break
70
At Breakfast
68
Family Day Out
68
During Work Or At School
65
Evaluation of Entry into Ice cream Business for Bangladesh Limited 46
Travelling ToFrom WorkSchool
65
At The Cinema
61
Special Event
56
Clubbing At A Party
50
Post GymSports
48
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Table 28 Relevant Occasions in Consumersrsquo Lives
Respondents were then asked to mention ldquofrequency of occurrence of the identified occasionsrdquo
The identified replies are as follows Normal dinner at homenormal lunch at homeComing home
from workschoolTraveling tofrom workschoolDay out with Partner SpouseMid-afternoon
break at homeOut of home hanging out with friendsLeisure walkMid-afternoon break out of
homeA night in with friendsSpecial dinner at homeSpecial lunch out of homeFamily day
outSpecial eventPost gymsportsDaily2-3 Times A WeekWeekly2-3 Times A MonthOnce A
MonthEvery 2-3 MonthsLess OftenNever Figure 13 Frequency of Occurrence of Occasions
This shows that ldquoNormal dinner at home Watching TV Normal Lunch At Home At Home
While ReadingMusicSurfing Coming Home From WorkSchool During Work Or At School
Travelling ToFrom WorkSchool Midmorning Break Day Out With Partner Spouse At Home
By Myself During The Dayrdquo are the most frequent daily rituals of busy lives of consumers
652 Frequency of Ice cream Consumption
Respondents were asked to mention ldquoconsumption pattern of ice cream during the identified
occasionrdquo on a scale of 1-5 depicting frequencies like ldquo(5) always (4) most of the times (3)
about half of the times (2) sometimes (1) never do not knowrdquo The responses are depicted in
the following table
Evaluation of Entry into Ice cream Business for Bangladesh Limited 47
444474544655555566756665775967779991011101111101210111110101113111412131314161
011121411131216181519181518211817171719181718201721222130303434253437403741394
046383944464746453745414641374638504843414839373030292726232725222020201926202
21722221317Midmorning
breakWhile clubbing at aAt the cinemaSpecial eventNormal lunch out ofA night in with
friendsNormal dinner atInformal dinner out ofAt home by myselfAt home by myself inOut
shoppingSpecial lunch atDay out with SpouseWatching TVAlwaysmost of the timesAbout half
of the timesSometimesneverdo not know
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Figure 14 Frequency of Ice cream Consumption
As it can be seen ldquoDay out with Spouse Special lunch at home Special dinner at home
Watching TV Family day out Celebrationrdquo are the occasions where most frequently ice cream is
consumed
653 Market Character Mapping Relevant Occasions vs Frequency of Consumption
If we plot frequency of consumption on the X-axis of a chart and relevance of occasion
occurrence on the Y-axis taking the above mentioned values as cut-off values we get four
quadrants in the chart depicting four market scenarios that any ice cream manufacturer in
Bangladesh market might encounter given the current market situation This market
segmentation is based on frequency of ice cream consumption in daily occasions of consumer
lives
The segments are
1048766 OPPORTUNITY MARKET High Relevant Occasions-Low Ice cream Frequency
1048766 QUESTION MARKET Less Relevant Occasions-Low Ice cream Frequency
1048766 HIGH FREQUENCY MARKET Relevant Occasions-High Ice cream Frequency
1048766 CAPTIVE MARKET Less Relevant Occasions-High Ice cream Frequency
The chart looks as follows Evaluation of Entry into Ice cream Business for Bangladesh Limited
48
Figure 15 Relevance of Occasion-Frequency of Consumption Mapping
As it can be seen from the above chart Bangladesh Market still lies in the Opportunity and
Question market zone with a pull towards High frequency and Captive Market zones This is
evident from market data as penetration of ice cream still remains at Thana headquarters levels
Also this explains the high market growth rate of 17 as market is yet under developed and
branded quality ice cream has yet not reached all levels of consumers especially rural level that
constitutes around 75 of Bangladeshi market
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
From the above analysis we can establish that target of ice cream manufacturers should be to
penetrate more into the Bangladeshi market to create higher frequency of ice cream
consumption The following chart shows the strategies to follow for ice cream manufacturers
Figure 16 Required Market Strategy for Bangladesh
Evaluation of Entry into Ice cream Business for Bangladesh Limited 49
As relevance of ice cream consumption occasions can hardly be controlled by marketers their
endeavour should be to create more ldquoemotional and functionalrdquo attachment to ice cream in less
frequent occasions through ldquomarket developmentrdquo strategy to earn share from overall food
expenditure of consumers and at the same time make them consume more ice cream in highly
relevant occasions through ldquopenetrationrdquo strategy
654 Consumersrsquo Emotional Requirements and Product Attributes
All consumers under these clusters also identify the emotional requirements and the significant
product attributes they seek from their current preferred and future desired ice creams These are
provided below
Cluster
Emotional Functional Requirement
Product Attributes
Enjoyment
Flavour Variety
1048766 Combination of different flavours
1048766 Combination of different textures
1048766 Very sweet
1048766 With wafer or biscuit
1048766 With chocolate
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Of a well known brand
Socially Involved
Spoonable Rich
1048766 Very creamy
1048766 Only natural ingredients
1048766 No mess
Care
Size Creaminess
1048766 Big
1048766 Rich full taste
1048766 Smooth
1048766 Value for money
1048766 No mess
Unwind amp Escape
Economy
1048766 Crunchy
1048766 Economic
1048766 Of a well known brand
1048766 Nutritious
Balanced Convenience
Health Conscious
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Of a well known brand
1048766 Nutritious
1048766 Milk based
1048766 Low sugar
1048766 Low carbohydrates
1048766 Filling
Active Self-Grooming
Fruit Vitamins
1048766 Healthy
1048766 Fruit based
1048766 Low fat
1048766 Liquid or drinkable
1048766 Nutritious
1048766 Of a well known brand
Confidence
Drinkable Light
1048766 Low calories
1048766 Light on the stomach
1048766 Chewy or gooey
1048766 Not so sweet
1048766 Natural appearance
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Sensual
Appeal or image
1048766 No artificial additives
Evaluation of Entry into Ice cream Business for Bangladesh Limited 50
1048766 Natural appearance
1048766 Melting slowly
1048766 Attractive packaging
1048766 High quality ingredients
1048766 Of a well known brand
Table 29 Requirements amp Product Attributes Desired by Consumer Clusters
Of these findings we see that the identified highlighted barriers to ice cream consumption are
pretty evident among the consumers Mostly people want products of a reliable source or a well
known brand low calories quality ingredients value for money economic type
Evaluation of Entry into Ice cream Business for Bangladesh Limited 51
70 INDUSTRY ATTRACTIVENESS AND ENTRY PROSPECTS
71 Driving Forces of Growth
As identified in the earlier sections there are several driving forces behind the growth of ice-
cream industry in Bangladesh
712 Trade and Infrastructural Level
1048766 As a result of globalization newer varieties have been introduced to the local products Many
foreign companies are also coming as franchise so there has been increased competition and
these boutiques are setting higher standards for the local producers
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 The present market growth rate is 18-19 which is being influenced by larger players like
Igloo who are expanding their distribution nation wide with expansion of national electricity
grid
1048766 With entry of Modern Trade and recent organized business approach of retailers has made it
possible for ice cream manufacturers to penetrate into shops even without providing them with
branded freezers
1048766 Weather change has increased ldquosummerrdquo season in our country which has reduced negative
seasonal impact on ice cream
1048766 Large companies like Igloo have taken global learning of using carts as an effective tool of
availability and visibility for ice cream
1048766 New and improved technologies are being used in the production process This technological
advancement has improved quality increased speed of production and made the process more
cost effective
713 Consumer Level
1048766 Only a few years back rich people could afford the luxury of having ice-cream but now it has
become a common product for everybody Ice-cream companies are producing different products
with a wide price range for consumers of every class and status
1048766 Nowadays companies are doing promotional campaigns more frequently the customers get to
know about the product which makes it easier for them to buy the best one
1048766 The improved standard of life and more modernized lifestyle of people is an important reason
for the increased consumption thus growth of the ice-cream industry
Evaluation of Entry into Ice cream Business for Bangladesh Limited 52
72 Prospects of Entry
The ice-cream industry of Bangladesh is an attractive one for the investors because there is a
huge market but number of producers is very small The major reasons behind industry
attractiveness are as follows
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 The industryrsquos current growth potential is very high with opportunity for market development
1048766 The competition currently permits adequate profitability and the competitive forces are
becoming stronger with time
1048766 Boutique segment is at a very high growth stage but no operator is currently operating with a
mid price range of BDT 100-400 Ice cream kiosks and small scooping boutiques can operate
within that range
1048766 Current industry driving forces are favourable for the future industry profitability
1048766 Globally oriented consumers look for variety in ice cream that is currently not available
Latest innovations came in the market in 2002 People would welcome new variety and flavours
1048766 There is a gap in the market for balanced convenience through ice cream where consumers can
get nutritional benefits for ice cream Also emotional attachment to ice cream could further be
improvised in promotional campaigns
1048766 There is high scope for market penetration and development to increase frequency of ice
cream consumption
1048766 Level of risk or uncertainty is very low in ice-cream industry because the consumer market is
so huge any product with a standard quality and careful pricing will be able to make significant
profit
1048766 As for geographic reach of the industry 60 market is still in Dhaka There is scope of
expansion and a new entrant can easily capture market share within Dhaka using carts even if
they do not want nation wide cold chain distribution
1048766 The production process is very complex and capital requirements are also high So before
going into production any company should know about their capabilities and weaknesses and
then start the business or else they might suffer huge loss at a certain level
1048766 Unilever can acquire the required resource and use existing multi-national multi-cultural
expertise to enter the market in a grand way
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 With high probability of entry from DANONE with more products like the ISIS diabetic ice
cream Unilever should consider entering in this industry as soon as possible
Evaluation of Entry into Ice cream Business for Bangladesh Limited 53
80 ENTRY STRATEGY FOR UNILEVER
While describing the suggested entry strategy for UBL certain issues have been kept
confidential and some issues have been touched but not explained to keep consistency with UBL
confidentiality policy
81 Suggested Entry Areas for UBL
1048766 Boutique segment of the Bangladesh ice cream is only 5 of the branded market UBL needs
to pursue a larger scope to make the entry viable
1048766 UBL cannot fight with unbranded segment as global product quality mandate of Unilever does
not allow UBL to fight in low price-low quality segment
1048766 Recommend entry should be in the common format segment with both single and multiple
servings and in the boutique segment with a different brand name (if possible BEN amp JERRYrsquoS)
1048766 UBL should build up state-of-art modern factory for manufacturing and establish cold chain
facilities initially focusing on metro cities
1048766 Investment issues are required to be addressed for building factory and cold chain and capital
requirement needs to be identified for that purpose4
1048766 UBL may have boutiques for driving image selective top-end offering
1048766 Kiosks can be setup near universities and shopping malls
1048766 Boutiques should be concentrated in Dhaka and Chittagong
1048766 Ice cream for boutiques and kiosks would be produced in factory as institutional packs of 9-10
litres
82 Products
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 As a Brand Building country in global Unilever operating framework UBL is entitled only to
bring products developed by the Brand Development countries
1048766 Unilever should focus on serving products that have nutritional benefits (already available
globally) along with usual satisfactions of sensual pleasure functional attributes etc
1048766 Current existent players especially Igloo and Kwality have extensively copied global and
regionally available Unilever products eg Cornelli is same as Wallrsquos Cornetto Vinetta is similar
to Vienetta Mega is similar to Magnum etc UBL needs to differentiate these to consumers on
the ldquotaste the originalrdquo platform where global quality is focused regarding the products
1048766 UBL should also bring regionally famous brands like Moo or Max to create image
differentiation
1048766 Magnum or Moo should be used as premium end ice cream to generate more profit margin
Evaluation of Entry into Ice cream Business for Bangladesh Limited 54
83 Placement
1048766 Distribution focus should be in Dhaka for entry as Dhaka contributes more than 60 of total
ice cream sales in the country
1048766 Company may use carts as distribution method They serve as good source of visibility and
availability It would help in increasing impulse purchase
1048766 At least 1500 outlets in Dhaka and Chittagong needs to be actively served using dedicated
branded refrigerators to generate sales
1048766 50 carts should operate in Dhaka and Chittagong
84 Price
1048766 UBL products should be priced at par with Igloo pricing for the common format ice creams
1048766 UBL can bring in premium single-serve SKUS for the higher economic classes in the price
range of BDT 60-80
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Smaller SKUs (small lolly stick) can be introduced in the price range of BDT 10-15
1048766 In the boutique segment UBL should price products above the semi-premium segment
(Gelateria Igloo Sub Zero or Andersenrsquos) but lower than that of Club Gelato or MoumlvenPick
85 Promotion
1048766 UBL would require strong marketing campaign (As high as 50 of sales) to have a grand
entry in the market
1048766 Presence in the television media would be of utmost importance More than 50 of
promotional expense should be made here initially Gradually it can be reduced
1048766 Newspaper would serve as the second most important option
1048766 Billboards should also be used
1048766 Activations (similar to Lux Channel i Super Star or Igloo Festival) should be done to generate
trial
86 Scope of Opportunity
Table 30 Value and Volume Based Scope of Opportunity for UBL
Value (BDT Cr)
Volume (Tons)
Market
131
7835
Common
121
7600
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Boutique
98
235
Evaluation of Entry into Ice cream Business for Bangladesh Limited 55
861 Geographic Contribution
1048766 Dhaka (61)
1048766 Chittagong (19)
1048766 Sylhet (10)
862 UBL objectives
Common Format Ice Creams
1048766 Target 10 Market share in 1st year operation
1048766 Value BDT 11 Cr
1048766 Production capacity required 21 Tons day
1048766 Freezer Placement 1500 freezers
1048766 Cart operation At least 50 carts
Boutiques
1048766 Target Further develop the market
1048766 Focus Dhaka Chittagong and Sylhet Metro
1048766 Franchise At least 20 franchisee operations nation wide in divisional towns
1048766 Pricing Below imported parlours above common formats with around BDT 400 per Litre
87 Critical Success Factors
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 UBL is considered as a high profile company in Bangladesh and thus they cannot operate in
the market only with common products like choc-bars and cups They must have premium
products (these require extrusion line) also to carry their brand image Otherwise UBL would not
be able to charge usual premium over competition products
1048766 Launch of ice cream would require huge promotional and activation support in order to gain
customers from Igloo People want novelty regarding ice cream and UBL have to let them know
about their products and create hype
1048766 Cart should be used as a source of distribution Recent successes of Unilever companies like
Indonesia shows that carts can generate more sales and can be used as source of visibility in the
minds of both retail traders and consumers Carts can also provide incremental sales to the
company
1048766 UBL have to create a strong cold chain for ice cream (initially in Dhaka and Chittagong) to
ensure quality products for consumers
1048766 UBL have to build capacity very rapidly to meet consumer demand if the launch is successful
Evaluation of Entry into Ice cream Business for Bangladesh Limited 56
90 BUSINESS PROJECTION
91 Basic Assumptions
Business projection for ice cream business was made based on a conservative approach UBL
would require spending significantly on production capacity and factory dedicated to ice cream
Thus to analyse business possibilities of ice cream certain assumptions were made and collected
data were used These are
1048766 Production equipments and cabinets would cost approximately BDT 55 crores
1048766 Production equipments 45
1048766 Packaging Equipments 15
1048766 Storage Facility 20
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
1048766 Branded Freezers 10
1048766 Distribution Investment 10 (Distributors would also invest themselves)
1048766 Ice cream factory with a floor size of 20000 sqft would cost BDT 25 crores
1048766 Objective is to capture 10 market share in Dhaka and Chittagong in the first year
1048766 Business would grow by 50 in year 2 and 3 30 in year 4 and 25 in year 5
1048766 Weighted price per litre is BDT 170 according to volume share of single serve ice cream
multiple serve ice cream and boutique ice cream
1048766 Other financial assumptions were also made List of them are provided below but amount has
been removed for confidentiality issues
Assumptions
Trade Margin
Distributors Margin
DutyVAT Rate
Trade Terms Expense of NPS
Trade Terms Expense of NSV
Advertising ampPromotion of NPS
Indirects (Salaries Wages etc)
Trading Tax
Table 31 Assumptions for Business Projection
Evaluation of Entry into Ice cream Business for Bangladesh Limited 57
100 CONCLUSION
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59
Ice cream has good prospect in Bangladesh It is still a growing market with opportunities for big
new entrants With the barriers of entry UBL needs to consider its priorities UBL being an HPC
company traditionally needs to acquire expertise in cold chain distribution and has to invest a lot
of money to rip the benefits of the industry However to initiate company can take regional
support and acquire resource expertise The company should enter the business as soon as
possible since there is potential threat from DANONE to introduce more ice creams after ISIS
diabetic ice cream and also with potential of the industry arch rival Nestlersquo might consider
entering into the industry too
Evaluation of Entry into Ice cream Business for Bangladesh Limited 58
References
Web References
1 wwwunilevercom
2 wwwunilevercombd
3 wwwhllcom
4 wwwunilevercompk
5 wwwthedailystarcom - Life Style Magazine
6 wwwreuterscouk
Evaluation of Entry into Ice cream Business for Bangladesh Limited 59