Price Mix
Let us examine the pricing objective that Ben & Jerry’s will pursue:
Sales oriented objectives: We seek some level of unit sales and gain 40% of ice cream market in U.A.E. We seek to achieve this objective in order to have better economies of scale than competitors. This is a sensible objective because the ice cream market is rapidly growing. We hope that larger future volume will justify sacrificing some profit in the short run. We shall keep our price flexible.
Price-Level policies – over the product life cycle
We shall pursue a penetration pricing policy throughout the introductory and growth stage. It is attractive to us because selling larger quantities will result in lower costs because of economies of scale. Penetration pricing will also help us deal with competition during growth stage. Our prices will be as follows:
Type Product Price
(in AED)
Single Scoop
Flavored Ice cream 3.00
Fresh Fruit ice cream 4.00
Double Scoop 5.00
Fresh Fruit ice cream 7.00
Sundaes 8.50
Small Cup – 50 ml 1.00
Big Cup – 100 ml 2.50
500 ml pack Flavored Ice cream
Fresh Fruit ice cream 5.00
7.00
1 liter pack Flavored Ice cream
Fresh Fruit ice cream 7.00
10.00
2 litter pack Flavored Ice cream
Fresh Fruit ice cream 12.00
15.00
Large glass Milk Shake 7.50
Regular glass Milk Shake 4.50
Additional toppings 0.50 (each)
Large glass Iced yoghurt 5.50
Regular glass Iced yoghurt 3.50
Discount Policies
We shall offer the following types of discounts to our retailers and customers:
Quantity discounts: These discounts will be offered to encourage customers to buy in larger amounts. This will let us get more business from both retailers and target audience. We shall offer noncumulative quantity discounts. These discounts will be given for individual bulk order.
In addition to this we shall also offer cash discounts to retailers. The term for this will be 4/10, net 3.
Allowances: Advertising allowances will be given to retailers to encourage them to advertise or otherwise promote Ben & Jerry’s ice creams. Promotional allowances will also be offered to customers during promotions.
Place Mix
Where to locate usually depend on consumers. An ice-cream parlor located any where in Dubai would do well due to its humidity but it is more important to consider the consumers purchasing patterns and locality of incessant shopping. The main objective is to make the ice cream available to the consumers in sufficient quantities, at the right place and time.
Creating awareness of an unfamiliar product requires a location were there are large crowds of people. This way Ben & Jerry’s ice creams is constantly exposed to its potential customers. Another important aspect to consider is our target market. Where exactly do our potential customers dwell? This would depend on a demographic research based on age. According to research, our potential customers are children and teenagers. However, young adults are also keen on purchasing ice creams. Place decisions need to be considered carefully. A wrong decision can cost millions and lead to a loss. The other 4 Ps of marketing can always be adjusted but once place decisions are made, it is difficult to modify.
Strategic Decision Making in Place
Place objectives
As Dubai consists of many families and since children and most teenagers depend on their parent’s for financial support, it is important to find a location where families, children and young teenagers dwell. According to our observation, many of the shopping areas in Dubai, such as Al Diyafah Street, Meena Bazaar, Al Nasr Square and Al Riqqa Street are crowded with people usually families and teenagers. According to the research 60% of people are suggesting to have our franchise outlet openend on Al Riqqa Street.
Al Riqqa Street is a cosmopolitan area consisting of:
1. Shops
2. Restaurants
3. A cinema
4. Shopping complex
5. Residential areas
6. Offices- Airlines
Riqqa Street has attracted a lot of tourists. Situated in the heart of the city, it provides Ben & Jerry’s with the opportunity to exploit its market. The Dubai shopping festivals is also held at this area.
Types of channels
Wholesalers and Retailers
Ben & Jerry’s plans to adopt an indirect method of marketing. Direct marketing is not practical because a lot of consumers are not aware of Ben & Jerry’s ice creams. Thus, they would be reluctant to buy it. The franchise itself acts as the wholesaler and producer, while the supermarkets are its retailers. An intensive distribution is appropriate, as many consumers prefer to purchase their groceries from supermarkets outlets located in the neighborhood. Since the sales of Ben & Jerry’s directly depends on its availability, it is essential to have Ben & Jerry’s ice creams distributed into supermarkets that are located in residual areas, such as Karama which is on Zabeel road; Al Shaab colony at Deira, Ghusais and Satwa.
Channel relationships must be managed
Building a good relationship is Ben & Jerry’s main aim, as the supermarket outlets are a main source of revenue apart from the parlor proceeds. The supermarkets are also an advantage to Ben & Jerry’s because it creates rapid awareness and deals with mass selling, resulting in more sales. The franchise needs to develop an understanding with all its channel distributors through a cooperative relationship, which can only be attained if channels coordinate and work together with one common objectives, i.e. to satisfy their consumers
Middlemen/ facilitators needed
Reaching consumers throughout many geographical areas
Maintaining good relationships with the retailers are important. Majority of the consumers are likely to purchase ice creams from a supermarket than from a parlor. Supermarket attendants are the actual promoters of the ice cream. They provide the consumer with details and information of the ice cream and are more likely to serve their customers better. Since Ben & Jerry’s consumers are spread across a large geographical area, supermarkets are the only way to reach their final consumers at a wide span.
Physical Distribution
Ben & Jerry’s needs to consider how their ice creams and products are to be physically distributed. Ice reams are not fragile products, thus reducing the concern for unexpected damage. However, they have to consider the costs of transportation of their ice cream and other diary products because consumers are more likely to appreciate a product that is inexpensive but at the same time high in quality. Road is the only mode of transportation in Dubai. Therefore, Ben & Jerry’s will consider hiring trucks or vans of their own to distribute their products.
Ben & Jerry’s aims to collaborate with its retailers, as we believe that it is important to cooperate and work efficiently in order to attain profitability and gain consumer’s interest. Considering the view of our consumers is our first priority.
Promotion
We will have to adopt two main forms of Non-Personal form of selling, which will involve:
Mass Selling:
With our target market, which is so large in Dubai, Mass selling seems to be the most appropriate and feasible one. Under Mass Selling we will adopt two methods.
? Advertising
? Sales Promotion
Let’s analyze the strategic palling for each of these.
Advertising:
The achievement of our mass selling will be accomplished through Advertising. A paid form of non-personal presentation of ideas, goods and services. Ben & Jerry’s will use various forms of media to inform and persuade its target audience, which will be discussed further in our media selection section.
Advertising objectives:
Our objectives need to be specific; they have to communicate the right message-
Short-Term objectives-
? Help position Ben & Jerry’s ice creams, in Dubai, by informing and persuading our target market.
? Help obtain desirable outlets and tell consumers where they can purchase Ben & Jerry’s here.
? Create product differentiation
? Get immediate results.
Long-term objectives-
? Create brand loyalty
? Update our Promotional mix, through constant feedback from our consumers
? Expand market share by capturing all the super/hyper markets and opening up our branches of ice-cream parlors throughout Dubai.
Media selection
Will depend upon the most practical, appropriate and cost effective ones that will work the best in this part of the world.
1. Press & magazines-very popular and effective.
2. Radio – Most of the people here while driving listen to the radio the most, as its FM’s are very popular. Hum FM is an Indian/ Pakistani Radio channel and many people tune into it during the day. We think radio here will work most effectively.
3. TV commercials- not very popular, but essential to create more visual appeal for our ice creams.
4. Billboards and banners- very expensive but are hi-tech and appealing, once we establish ourselves we can take advantage of this medium here.
Media schedule
Budget:
Initially Ben & Jerry’s will have to invest from its initial capital requirements. The initial capital requirements are Dh.1,000,000/- out of which Dh. 144,000/- have been allotted for promotion. But as Ben & Jerry’s starts generating revenue then a combination of the following methods will be used:
? % of sales method: Following this method Ben & Jerry’s will set aside 15% of its revenue from sales for promotion. Although when the entire amount will not be used the n it will directly go into the “promotion contingency budget”. This will be used when the sales of Ben & Jerry’s will fall i.e. during the winter season in Dubai (end of November-mid of February 3.5 months or less approximately). The amount from the contingency budget will be used to level sales during theses months.
? Task-objectives method: Using this method, the promotion budget will be divided among various tasks- sales promotion-40%, advertising-50% and public relations-10%.This allocation will be maintained till Ben & Jerry’s moves from the introductory stage to the growth stage and when all its innovators turn into early adopters.
According to our budget we have allocated 50% for Advertising. Out of which:
? Radio- Cost of advertising a radio ad using HUM FM: Dh.250 per second =250*30seconds =Dh.7500/-
? TV-
? Press & magazines-
? Billboards & banners-AED 7500/-
Who will do the work?
Advertising Agency- Are specialists in planning and handling mass selling details? They will help us plan and decide the right channel of communicating with our consumers and help us do our job more economically.
Our second method of mass Selling will be:
Sales Promotion
Other than advertising, we need to stimulate interest, trial and purchase of our product.
Ben & Jerry’s will use this method intensively in Dubai because:
? It is very popular in Dubai
? This method also produces immediate results, because the product is immediately reachable for e.g. promotions in supermarkets and most importantly if the consumer likes the product, the purchase decision can be made on the spot.
Sales Promotional objectives
? Make people aware of the promotion through ads and word of mouth
? Help them understand the promotion, the place price & the offer, what it means
? Produce immediate buying results
? Feedback- makes our consumers come back for more.
Methods- aimed at our target consumers
1. Contests
2. Coupons- very effective in Dubai
3. Chiller plays
4. Point of purchase
5. Banners and streams next to POS.
Methods – aimed at our retailers (supermarkets)
Trade promotions- The objective here is to encourage them to buy and stock our items in large quantities.
1. Price deals
2. Promotional allowances
3. Merchandise aids
4. Calendars
5. Gifts
Over all promotional objectives:
? to provide information in the right manner
? affect behavior- persuade them to stop and think about Ben & Jerry’s
? stimulate demand
? Create Product Differentiation- this is to differentiate our ice creams, from that of our competitors. (E.g. Fresh fruits for the healthy feeling).
? Increasing our product value by this differentiation and quality service.
? finally increasing sales and revenues
Communication Process
Attention Interest Desire Action
This process is very essential, thought w