Industry OverviewIndian ice cream industry is currently at Rs. 3000 crore with a continuous growth from both organized and unorganized sector. The organized sector dominates with nearly about 75% of the market share and remaining with small and medium sized unorganized players having major share from the rural markets of India. Out of the organized players AMUL leads the pack with about 37% market share, followed by KWALITY WALLS and VADILAL which revolves around 12-14% share each. In India the per capita consumption is still at a 350 ml which is quite low as compared to 28.1 litres in country like New Zealand and 23 litres in USA.

Industry Challenges1. Processing and Packaging: Due to low levels of infrastructure development and poor

transport, packaging and processing becomes extremely important. Ex: all the big brands have started keeping bigger SKUs in plastic boxes rather than cardboard boxes.

2. Supply Chain Optimization: Due to lack of cold storage chains and irregular supply of electricity, information flow and proper movement of materials throughout the supply chain becomes extremely important.

3. Irregular Demand: Bulk of sales happen during the month of April-July, while there is a significant fall during the winters. This led to accumulation of stocks during winters and drop in production levels.

4. Rise in input cost: there has been a sharp rise in the input costs for ice cream manufacturers, especially due to the increase in the prices of milk.

Industry Drivers1. Lucrative industry: Until 2012 ice cream was the fastest growing product in packaged food

category. Due to this several players started expanding. Ex: Mother Dairy which is a very big name in Delhi and NCR regions is planning to enter the Mumbai, Bangalore and Chennai markets by the end of 2013.

2. Rise of impulse buying behaviour among buyers is also an added opportunity for the sector3. Increase in disposable income: The rising income and continuously increasing eating out

customers gives a lot of boost4. Increasing Per capita Consumption5. Frozen Yoghurt market presents new opportunities for ice cream players6. Indian Ice Cream Manufacturer’s Association has been formed for keeping the interest of

the Ice cream manufacturers and players in India7. Promotional offers flooding the market8. Ice cream is being continuously added in the meals or thalis provided by traditional

restaurants9. Introduction of new flavours and variants

Competitive LandscapeGujarat Co-operative Milk Marketing Federation is expected to continue its rein in the market with 31% of share in 2013. This is because its products were economically priced and were widely available. AMUL has strategically developed relationships with milk manufacturers in Gujarat due to which there are no issues of raw material shortage or abrupt increase in the prices of inputs. Moreover, the company already has a cold chain network, which is crucial for this business. Many

regional players were unable to expand their operations beyond a particular area because investment in cold storage is huge and its management requires expertise. Hindustan Unilever through its brand Kwality Wall’s is the second largest player with an expected value share of 20% in 2013. The company’s brand has enjoyed considerable brand equity in metros for the past two decades.

Distribution ChannelThere are four major distribution channels in Ice cream market of India:

Push Cart: prevalent in rural India Retailers: exclusive as mixed retail outlets Distributors Parlours

Key Channels

Retailers

Distributors

Parlours

Push Cart

RecommendationsWith the above challenges and consumer buying behaviour the following are some of the recommendations for players inside this industry:

1) The post purchase evaluation of the brand had a very important role to play in making loyal consumers. Attitude change through passive learning can be achieved by convincing the consumer to consume the ice-cream even when consuming alone. This can be done by emphasizing on satisfaction and happiness after ice cream consumption.

2) A certain degree of impulse purchase also is responsible for the consumption. This can be attributed to the classical conditioning theory. For e.g., the Ice cream ad show a family enjoying ice cream in the evening/ or when out for dinner. This induces a consumer to buy Ice cream when he/she is out with family.

3) Positioning of the product has a major influence in building attitudes about any product. But in case of ice creams we typically do not have any clear cut positioning for any brands. The consumers also could not associate any brand with any particular/distinct characteristics. Any brand which is able to create a unique positioning for itself in the category and clearly have an advantage over others.

4) Brand Loyalty was not much visible as long as it was a good and known brand. So it means that consumers are willing to try out the same flavors in other brands too. This gives opportunity for marketers to give the consumers an enriching experience while buying and post purchase. As discussed in the paper on Ice cream there is a need for Ice cream to turn itself into a starbucks model, wherein the brands focus on providing a holistic experience to its consumers.

5) One of the major needs that is fulfilled while consuming an ice cream is the feeling of having something sweet after having food. The feeling of completeness and that is something marketers can leverage both in promotions and place of the product. By making it available at the right places (outside restaurants etc.) and promoting it in a way which influences consumers to have it after eating out and having food.