FH Aachen University of Applied Sciences, Jülich

Department of Energy Systems International Management

Prof. Dr. Ulrich Daldrup

Ben & Jerry's Ice Cream Export Plan-India

Report By

Meenakshi Gondyala Student, Masters in Energy Systems

Matriculation No: 3055363 FH Aachen

University of Applied Sciences, Jülich

Table of Contents

1. Executive Summary .................................................................................................................................. 1

2. Company Description ............................................................................................................................... 2

2.1 History ............................................................................................................................................... 2

2.2 Goals and Objectives ......................................................................................................................... 3

2.3 Management ..................................................................................................................................... 4

2.4 Export Team ...................................................................................................................................... 5

3. Product/Service Description .................................................................................................................... 6

3.1 Domestic and International Products or Services ............................................................................. 6

3.2 Growth Potential ............................................................................................................................... 7

4. New foreign market place analysis .......................................................................................................... 8

4.1 Rationale for Exporting ..................................................................................................................... 8

4.2 Country Profile .................................................................................................................................. 8

4.2.1 Political, social, economic conditions ............................................................................................ 8

4.2.2 Fiscal and Taxation structure ......................................................................................................... 9

4.2.3 Infrastructure and location conditions .......................................................................................... 9

4.2.4 Cultural practices ......................................................................................................................... 10

4.3 Industry Profile ................................................................................................................................ 11

4.3.1 Direct customers and actual end users ....................................................................................... 11

4.4 Current market trends ..................................................................................................................... 12

4.5 Competitive analysis ....................................................................................................................... 12

5. Market Entry Strategies ......................................................................................................................... 13

5.1 Foreign Market Entry Mode: Franchise Agreement ........................................................................ 13

5.2 Target Customer Profile .................................................................................................................. 14

6. Conclusion ............................................................................................................................................. 15

7. Bibliography ............................................................................................................................................ 16

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1. Executive Summary

This export plan will provide an elaborate overview of the different issues involved in

the decision to grow by exporting abroad, which is divided into different parts, as well as

a conclusion.

Ben & Jerry’s ice cream has grown into an international company throughout the years.

In 2000, they were acquired by Unilever, which enabled them to grow even bigger

internationally. In this export plan, Asia was considered as the main market for an

opportunity in regards to international growth through export for Ben & Jerry’s, after

which India was chosen as the most suitable option within Asia. There are multiple

reasons for this export choice, such as market growth, trend and target customers, as

well as their unique selling proposition.

Macro-economic factors including political and economic factors have been scrutinized

along with cultural implications on doing any business in India. The industry has been

defined as the ice cream and frozen desserts industry and 2 major competitors have been

identified in premium market segments with some minor players as well. Consumer

behavior patterns have also been scrutinized and the changing consumer behavior is

analyzed as well.

Ben & Jerry’s will enter the company through franchising. Their target group is young

post-affluent youngsters in large cities such as Mumbai.

No specific laws regarding franchising exist in India. Ben & Jerry’s should take into

account the relevant laws regarding product liability, trademarks, insurances etc.

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2. Company Description

2.1 History

In 1978 in Burlington, Vermont, Ben Cohen and Jerry Greenfield leased an old gas station

building to open up their own ice cream shop creating rich & creamy, fun & chunky ice

cream flavors they had always dreamed about. Ben & Jerry’s turned out to be a huge

success and they began selling it to local restaurants, grocery stores and supermarkets

throughout Vermont and beyond (Ben & Jerry’s History. 2016). In 1985, Ben & Jerry’s

Foundation was founded, which includes a gift of 7.5% of the company’s annual pre-tax

profit, to fund community-oriented projects. This was the start of Ben & Jerry’s Corporate

Social Responsibility, which resulted in their Fair Trade certification (Ben & Jerry’s

Timeline. 2016).

In 1994, Ben & Jerry’s was first exported to the United Kingdom. It now operates in 35

countries around the world, including Australia, Germany and Singapore (Ben & Jerry’s

SEAR 2014).

After their financial performance suffered in the 1990’s due to health concerns of their

consumers in regards to fatty foods like ice cream, Unilever bought Ben & Jerry’s in 2000.

The acquisition agreement included some ground breaking provisions. First, Ben &

Jerry’s operations where kept mostly separate. Second, the board of advisors was

composed primarily of the members of the Ben & Jerry’s homemade board of directors.

Third, all Ben & Jerry’s employees were retained for a minimum of two years following

the acquisition. Fourth, the board would have primary responsibility managing the social

mission of the company. However, Unilever would have primary responsibility in the

area of financial and operational aspects and all areas not allocated to the board. Unilever

agreed to continue to pay the 7.5% of pretax profits to charity, maintain in Vermont its

corporate presence and substantial operations for at least five years. Although most of

these agreements favored Ben & Jerry’s, Cohen and Greenfield were reluctant to sell, but

due to being a public company, they had to handle in the interest of the stakeholders,

which they did (Sampselle, D. 2012).

In regards to the export strategy of Ben & Jerry’s, until now they have focused on

Western markets, such as the United States and Europe. Before the Unilever take over in

2000, Ben & Jerry’s did not believe in expanding its business just to allow it to grow,

which caused late entry into foreign markets. The first time Ben & Jerry’s went

international was in 1986, through a licensing agreement in Canada. From then on, it

grew internationally but without any strategy what so ever. Only when they were bought

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by Unilever, the international strategy became more focused (Straub, S. et al. 2003).

Not only do they export and sell their product throughout Unilever in supermarkets and

movie theaters, but they also use a Franchise model to open up new stores around the

world. This is a model used for certain countries in which Ben & Jerry’s is already present

in some form, and currently not available in other Asian countries except in Japan and

Hong Kong. They offer a clear overview of their international website, on which

franchisees can show their interest and apply for franchise opportunities. This is

regulated through the Ben & Jerry’s headquarter in Vermont, US (Ben & Jerry’s Franchise

Opportunities. 2016).

2.2 Goals and Objectives

Ben & Jerry’s is founded on and dedicated to a sustainable corporate concept of linked

prosperity, this translates itself into a mission of three interrelated parts: Product

Mission, Economic Mission and Social Mission. These three parts must thrive equally

with deep respect for individuals in and outside the company and support the

communities of which they are part (Unilever USA Ben & Jerry’s. 2016).

• Product Mission

“To make, distribute and sell the finest quality all natural ice cream and euphoric

concoctions with a continued commitment to incorporating nutritious, natural ingredients

and promoting business practices that respect the Earth and the Environment” (Unilever

USA Ben & Jerry’s. 2016).

This first part of Ben & Jerry’s mission is not directly related to their export activities, but

more to the product they provide. This mission naturally has important implications for

export activities, most importantly for the countries’ economic opportunities.

• Economic Mission

“To operate the Company on a sustainable financial basis of profitable growth, increasing

value for our stakeholders and expanding opportunities for development and career

growth for our employees” (Unilever USA Ben & Jerry’s. 2016).

Because Western markets have become saturated and income and population growth is

accelerating rapidly in regions such as Latin America and Asia, food producers are

seeking footholds in developing emerging markets (Sampselle, D. 2012). In this case the

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Asian export activity of Ben & Jerry’s would benefit this economic mission, not only

would they increase shareholders value, they would also increase expanding

opportunities for development and career growth of their employees. Increasing their

export activities into Asia would leverage their risk from the saturated Western markets

to the increasingly growing Asian markets.

• Social Mission

“To operate the company in a way that actively recognizes the central role that business

plays in society by initiating innovative ways to improve the quality of life locally,

nationally and internationally” (Unilever USA Ben & Jerry’s. 2016).

This social mission is indirectly very important for Ben & Jerry’s exporting activity, not

only is the company very focused on increasing their corporate responsibility through

gifts, they have also incorporated it in their business strategy. Asia, a market known for

its great discrepancies between poor and rich, would benefit from Ben & Jerry’s entry

since it’s investment would not only create job opportunities, they would also initiate

innovative ways to improve the quality of life locally. So it would be a two way street, and

both the local markets and Ben & Jerry’s would benefit from it.

2.3 Management

As mentioned previously, Ben & Jerry’s is a wholly-owned subsidiary of Unilever, but

with an independent Board of Directors. This governing body is very unconventional,

which is empowered to protect and defend Ben & Jerry’s brand equity and integrity.

Their mission is to preserve and expand Ben & Jerry’s social mission (Ben & Jerry’s Board

of Directors. 2016).

Not only does Ben & Jerry’s have plenty of exporting experience, they are currently

situated in 35 countries, including Hong-Kong and Japan. They are also part of Unilever,

which today is the second largest food producing company of the world, not to mention

that they have access to the Hindustan Unilever Company, which already introduced 35

brands to the Indian market, including other ice cream brands (Hindustan Unilever

Limited Introduction. 2016). India is not the only Asian market where a Unilever office is

situated; countries such as China, Indonesia and Thailand all have one, although these are

all country offices and therefore different from Hindustan Unilever Company, which is less

incorporated into Unilever Inc.

In Asia, Unilever’s company structure could be used to Ben & Jerry’s advantage, take for

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example Hindustan Unilever Limited. Their company structure is one of a fundamental

principle determining to infuse speed and flexibility in decision-making and

implementation, with empowered managers across the company’s nationwide

operations. Day-to- day management of affairs of the company is vested with the

management committee, which is subjected to the overall superintendence and control

of the board (Hindustan Unilever Limited Company Structure. 2016). This creates useful

access to local market knowledge and the possibility of using this speed and flexibility in

decision-making and implementation process introduced by the local managers in India.

All these factors contribute positively to the readiness of Ben & Jerry’s if they were to

export into India. Any other countries in Asia with a Unilever country office would also

benefit from these advantages; therefore it would be wise to choose one of these markets

if they were to enter into Asia, since local knowledge is already available within the

boundaries of the company.

2.4 Export Team

In regards to the Export team, Ben & Jerry’s has an advantage due to the Unilever

ownership of the brand. They have a local office (most of the country offices are located

in the main capital), which makes communication with the target market, suppliers and

other key players a lot easier. Due to Unilever being an international company with

international (Asian) country offices, they are in the perfect exporting position, the

contact between Ben & Jerry’s and the country office will be naturally supported by the

normal business communication channels within Unilever, which eliminates a lot of

difficulties when exporting abroad.

Due to the International (local) skills set of the international corporate offices, they are

able to identify the differences in language, culture, marketing do’s and don’ts, they have

a well-established distribution network in place, which benefits the logistics and

transportation of the ice cream. Also they will be able to fully take over any legal matters,

politics, documentation, and financials and so on since they are a legal entity within the

countries of residence, on top of that they have plenty of experience in introducing new

international brands into the local market.

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3. Product/Service Description

In the following section it will be discussion regarding the product description for Ben &

Jerry’s for both the home market and the Indian market. This is the first time India will

be introduced as our chosen export market.

3.1 Domestic and International Products or Services

One would think that a highly priced, well-known International brand such as Ben &

Jerry’s has no reason seeking business in India. But as mentioned previously, the

traditional Western market is saturated and Ben & Jerry’s is looking for other markets in

the world. So why India?

Growth, the Indian ice cream market is growing 20% annually, this segment caters to a

large spectrum of consumers, and the gourmet ice cream category is replacing anything

that needs to be cooked in the dessert space, whereas Indian consumers view it as

leisure (Choudhary, V. 2012).

Trend, other international brands such as Starbucks, Dunkin’ Donuts and other ice

cream brands such as Haagen-Dazs and London Dairy have recently come to India. These

brands are living proof of the fact that India is a market not to miss out on (Choudhary, V.

2012).

Target customers, Ben & Jerry’s, which can be considered as a luxury product, is to

target affluent post- liberalization youngsters who live in large cities like Mumbai. These

customers are familiar with the Western culture and its products; their purchasing

power is increasing, which they use to buy these luxury products, also they are brand

conscious, innovators or trend followers (Teatro Naturale. 2016).

Another important thing is in regards to what Ben & Jerry’s can offer the Indian market,

and how they can use their unique selling points to strengthen their competitive

advantage. How can Ben & Jerry’s convince the Indian market, that although their price is

a premium one, they provide a better product than the competitors in the market? Well,

Ben & Jerry’s has incorporated product differentiation in its general strategy to

command a higher price. Also they use their all-natural, high quality ingredients as a

strategic use of product differentiation. But most important of all, they use their ice

cream flavors. As a matter of fact, not only do the quirky names of the ice cream, such as

Chunky Monkey and Chubby Hubby, set Ben & Jerry’s apart from their competitors, these

flavors can also be used to their advantage in the Indian market, by introducing typical

Indian flavors to the market (Alliant. 2016). This is where Ben & Jerry’s can differentiate

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from its competitors.

Another consideration is the seasonal effect of the climate on the product, luckily in

India, which throughout the year in the multiple states has a tropical climate, this can be

considered beneficial for ice cream brands, increasing sales instead of limiting them.

Since ice cream is a product less vulnerable to changes in product specifications such as

electronics for example, and less costly to change (new flavors are easy to add to the

existing product portfolio), the product has a relatively long product life cycle.

These and other reasons why and how Ben & Jerry’s should seek business opportunity in

India, will be discussed further on in this paper in more depth.

3.2 Growth Potential

As mentioned before, the growth potential in the Indian market is quite substantial, the

ice cream market is growing with 20% annually whereas the existing Western market of

Ben & Jerry’s is currently saturated. Also the GDP of India is rising, there is a young

affluent group of consumers with quite substantial buying power, who are seeking luxury

western brands like Starbucks to spend their money on. Also the Indian market itself is

one of the biggest in the world, creating unlimited opportunities for growth. Although

due to big discrepancies between poor and rich in this market, it is very important to

recognize the opportunities but also the limitations offered. Although surely costs in

regards to R&D are needed, the presence of Hindustan Unilever Limited limits this, since

a lot of services are already in place by the company itself. In regards to product R&D,

unfortunately no information on this can be found, but one can imagine that with a

product like ice cream, R&D is limited especially when entering a new market, since

existing flavors can be used, packaging for example is most likely to be subject to some

R&D cost since it needs to be localized. Although if they decide to enter with new flavors,

R&D costs would be involved, these costs would be similar as any other costs involved

with producing a new flavor.

Whereas we see it, most costs in regards to exporting Ben & Jerry’s to India will occur in

the entry strategy forming and market research.

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4. New foreign market place analysis

4.1 Rationale for Exporting

As mentioned in 3.1 and which will be mentioned later on in section 4, there are multiple

reasons why Ben & Jerry’s should seek business opportunities in India. As mentioned

earlier how growth, trend, target customers and the unique selling proposition Ben &

Jerry’s can offer the Indian market, but how is this linked to the company’s goals and

objectives discussed in 2.2?

Again the Product Mission does not necessarily provide a good reason to export abroad,

this is in regards to the quality of the ice cream and respect towards the Earth and the

environment.

The Economic Mission does relate to the export strategy into India, since growing into

new and emerging markets provides them with opportunities to sustain profitable

growth and deliver shareholders value. Not only does this apply to growth but also

towards the trend of international companies setting up business in India and the

growing target customer group that provides opportunities for Ben & Jerry’s.

The Social Mission is another goal that cannot be forgotten, especially when making the

choice to export into India. This relates to their unique selling proposition, whereas a

country such as India will benefit greatly from companies that are eager to invest into

the quality of life in society, and whereas Ben & Jerry’s could benefit of this by embracing

the opportunities that India offers. This would create a win-win situation, and it might

even be a business opportunity that could benefit their supply chain if you consider the

opportunity of gaining the most important ingredient of ice cream, milk, from the local

Indian farmers.

4.2 Country Profile

4.2.1 Political, social, economic conditions Due to different political parties running different governments in the states of India, Ben

& Jerry’s has to decide which states to enter first, where it is easy and suitable for them to

find a local partner or to set up their own subsidiary. Social conditions provide a wide

range of factors Ben & Jerry’s should consider. There is a lot of disparity between the rich

and the poor. There are high-tech and rich areas in all the major cities which are potential

cities for Ben & Jerry’s. But there are also equally poor and slum areas in all these major

cities. The purchasing power of people is increasing and the general mass is turning

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towards luxurious food and beverage products while showing increasing willingness to

consume them more than before. But at the same time, consumers are price-sensitive and

even though they know it is a luxurious product, they think of the price. This links to

economic conditions, which are getting better for the rich and middle class families,

whereas poor families still remain poor. Potential markets and locations for Ben & Jerry’s

would be the major cities where there is a high growth in IT and other similar industries.

These are the locations where young consumers earn more and are willing to pay for the

products. This adds to the importance for Ben & Jerry’s to maintain a different strategy

than what it usually uses when it enters other markets and also one which is different to

its competitors to attract various consumers of various buying powers. This will be

further discussed in the market entry sessions.

4.2.2 Fiscal and Taxation structure

The Indian ice cream industry shows a per capita consumption of 300 ml when

compared to 22 liters in the USA has a shorter shelf- life and high manufacturing and

transportation costs. Companies have to pay 15% discount to each dealer and

distributor, a 15% discount on VAT and 1% on excise (iicma.in). The government is

thinking of reducing VAT to 4-5% to increase margins for companies and increase

product prices for farmers in order to boost the industry (iicma.in).

4.2.3 Infrastructure and location conditions

The Indian dessert and ice cream sector is expected to be growing about 20% every year

(livemint.com). To meet this rising demand, the dessert and ice cream sector is being

supported by the increasing investments in production and the processing and

marketing infrastructure. The infrastructure capable of meeting international quality

requirements and a comprehensive strategy for producing quality and safe products are

being formulated within the legal system to increase the exports from India in these

industries. But if Ben & Jerry’s decides to enter India through franchising, entry strategy

which it usually uses, then it has to choose the cities where the infrastructure is

supportive. Since Ben & Jerry’s is a luxury brand with an average price 3 to 4 times of the

local brands, Ben & Jerry’s should provide a climate and an environment to justify that

price. They could use Starbucks Coffee as an example, which launched in India with

exhaustive and huge outlets where people can hang out and spend time enjoying their

coffee. As youngsters and families who can afford premium ice cream will be the main

target consumers for Ben & Jerry’s, they should provide these services. The marketing

and positioning of Ben & Jerry’s should be the differentiator for the company if it wants

to re-direct consumers from affordable local brands towards Ben & Jerry’s. Location

wise, stores should be set up in the high potential areas of big cities and towns where

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they are easier to reach. Due to the bad roadway systems, heavy population and high

amounts of time required for travelling, it is not possible to reach a store if it is too far

from the house of the consumer. For instance, for a consumer in Mumbai, if he wants to

reach a store that is more than 5 kilometres away, it may take more time during the peak

traffic hours and therefore they could prefer a local brand nearer to the consumer’s

house. That is the reason why many foreign retail or food outlet companies, entering

India open outlets in many areas throughout the same city.

With inefficiency in freezer warehouses, companies hold their own warehouses and

sometimes their own manufacturing plants nearer to the major high-potential markets

to easily cater to the local demand. With the hot Indian climate and inadequate roadway

systems, it is very important for the companies to maintain an efficient transportation

and distribution systems to cater to the local needs. Electricity, proper infrastructure,

logistics, cold chains and high transportation costs are the major problems for any

company.

4.2.4 Cultural practices

There are a lot of substitutes for ice cream in India. Major substitutes are the traditional

Indian sweets and desserts, which vary completely from one state to another or

sometimes even from one city to another city in India. Especially in the major cities

where people from various places and cultures live, there are a lot of options to

substitute ice cream with like homemade sweets and desserts or sweets like halwa

(carrot sweet) and kheer (milk sweet) and kulfi (milk and nuts flavoured ice cream stick)

and faludas (milk and fruits flavoured ice cream cups) and these can be bought from

bakeries and stores. With this, there is a lot of bargaining power with the consumers and

therefore, affordability and price plays a major role in attracting the consumers by the

companies. Marketing and communication strategies are very important for the

consumers with the focus on Indians who see ice cream as something to eat while

enjoying or sharing with friends and family. It is so rare that an individual goes and

consumes ice cream individually. Usually it is a group of people visiting an ice cream

parlour or taking home a family pack. With most of the Indians being vegetarian, it is

important for Ben & Jerry’s to market their products as pure vegetarian if they are. If

they contain any additives that are taken from the animals like animal fat, it is very

important for the company to mention that clearly in its campaigns and also on the

products’ packaging. Indians are very sensitive when it comes to religious customs and

so, it is very important for the companies to communicate the pure vegetarian products.

It is also very important for Ben & Jerry’s to use modern communication strategies to

attract the younger generations and rich consumers with high-end and actor- filled

commercials making the consumers feel that the commercials and the products are in-

line with their living styles and offer high-end experience. On top of this, it is important

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to focus on the stores in which most of the consumers consume the products. It is

important to provide that in-store experience to the consumers to attract them, and

make them come back.

4.3 Industry Profile

4.3.1 Direct customers and actual end users The Indian ice cream market can be segmented based on three factors.

1. Based on flavours, ice cream can be of many flavours including chocolate, vanilla,

strawberry, mango, butterscotch, many fruit flavours and more traditional dry fruit

flavours like kesar-pista (saffron and pistachio) and kaju-draksh (cashew nuts and

dry grape). 70% of the market is dominated by chocolate, vanilla and strawberry

followed by butterscotch and other fruit flavours.

2. Based on the packaging, ice cream can be sold in cups holding 100 ml to 500 ml and

bars, sticks and cones and family packs of 1 litre in wax-coated paper or plastic

cartons. Stylish and container packaging are gaining importance in modern days in

high-end locations.

3. Based on consumer segments, ice cream can be sold as cheaper versions to low-end

consumers who usually buy during the hot summer months and to mid-level families

who occasionally buy during special occasions or vacations or when they are

travelling. But ice creams are also consumed by high-end customers who usually buy

in larger chunks for parties or dinners which generally happen in 5-star hotels or

party resorts. For these events, usually, there will be a need for large amounts of ice

cream and consumers are willing to pay a lot for the presence of different flavours in

different stylish presentation containers and different colours (123HelpMe.com).

Distribution systems are still quite inefficient and ice cream distribution in India involves

distributors, wholesalers and retailers. The most common places for consumers to buy

ice cream are special ice cream outlets where consumers can sit, relax and enjoy ice

cream with friends and family. This type of on-the-spot consumption is increasing as

consumers in India want to spend time in the ice cream parlours and enjoy the ice cream

with their friends and family in a beautiful and comfortable environment. At the same

time, take-home ice cream packaging are also increasing their importance since parents

are generally buying ice cream in 1 litre packages and then enjoying with their children

at home. At the same time, other major outlets are super markets where people,

especially in the busy cities, shop once a week. They buy large buckets of ice cream but

this is still a small market share. One noticeable system of distribution in India is that ice

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cream, especially small cups and sticks and cones and bars, are available in all types of

small grocery stores, family-owned stores, medical shops and even stores which do not

sell any food or grocery related things at all. There will be small freezer compartments

outside of the store where people can see and buy ice cream. Bakeries are major players

in this segment. This makes it very important for Ben & Jerry’s to have an efficient

distributor locally who can cater to the needs of all these small players which when

combined have a large amount of sales. This makes it very important for companies to

have local manufacturing and distribution systems catering for high-potential markets.

4.4 Current market trends After the ice cream industry was de-reserved in 1997, the market grew to be a 15-16

Billion INR (3.2 – 3.9 Million USD) market today with 30-32% in organised sector valued

at 4.9 Billion INR (123HelpMe.com). The Kwality Walls brand of Hindustan Unilever,

Which is Unilever in India has a 50% market share followed by 35% by Amul, a local

company and 8-9% by Vadilal, another local company. Per capita consumption of ice

cream in India is very low at 300 ml when compared to 22 litres in markets like the USA

and is one of the lowest in the world. This is increasing presently and gives abundant

opportunities for ice cream companies entering the market now and offering various

flavours and packaging at affordable costs. High tariffs and inefficient distribution

systems are still the main problems being faced by ice cream companies but, at the same

time, the affluent and getting-rich younger generations tend to consume and try more

varied flavours of ice cream which offer abundant opportunities for ice cream

companies. Manufacturers should do an efficient market research before choosing

potential consumer segments and locations and entering the markets. Manufacturers

should study the changing markets and behaviours in the consumers’ demands.

4.5 Competitive analysis

The Indian ice cream market is still dominated by local players like Kwality Walls and

Amul. Kwality Walls is a brand by Hindustan Lever Ltd (HLL) and Amul is a brand by

Gujarat Cooperative Milk Marketing Federation (GMCCF).

Hindustan Lever Ltd restructured its ice cream business in late 1990’s and introduced

many brands like Kwality Walls and focuses on only major cities (123HelpMe.com).

Therefore Ben & Jerry’s would compete with Kwality Walls whereas, both these brands

are from Unilever which will result in cannibalization of the brands, not unknown to

Unilever.

Amul’s strategy is to offer international variety at Indian tuned prices. Amul claims that

it is half the price of Kwality Walls. Amul also offers flavours which are similar to

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international brands, Dreer TM and Ben & Jerry’s (Alphonso Mango, Date with Honey,

Fig and Cheese with Almonds) and offers them in 100 ml packs at Indian tunedprices.

Mother Dairy of National Dairy Development Board (NDDB) sells its ice cream in its

stores but does not sell Amul brands anymore. It also formed many Joint-Ventures with

the dairy cooperative federations of individual states.

All these companies market their products to the consumers at various price points.

Amul entered the premium market which was dominated by Kwality Walls. At the same

time, regional players are also very active with Vadilal Industries Ltd (VIL)

manufacturing in 3 manufacturing bases in 2 states and operating in 5 states using

franchising agreements. With the increase in prices of milk and milk products, major

players and local players are competing in price wars with squeezing profit margins

(123HelpMe.com).

5. Market Entry Strategies

5.1 Foreign Market Entry Mode: Franchise Agreement

Ben & Jerry’s should start entering India using franchise agreements. As franchising

involves less risk and requires less capital than other market entry strategies such as

strategic alliances or mergers and acquisitions, this comprises of a sound entry mode to

test the market. However, franchising is more costly than licensing or exporting, it

ensures more control since in most cases extensive training is provided by the franchisor

to the franchisee. Next, FDI restrictions on retail still exist, which could pose a substantial

challenge for the company in the future. Franchising would thus be the safer choice

(Franchising in India, 2010).

As a matter of fact, Ben & Jerry’s provides both in-house and in-store training, which

gives more certainty in maintaining a good brand image. In-house training is held at Ben

& Jerry’s “Scoop University” where skills in marketing, merchandising, finance, HR,

customer services and Scoop Shop operations are taught. Additionally, Ben & Jerry’s also

grants their franchisees access to proprietary information, which include recipes,

operation standards and training manuals (Training and support, 2016).

In addition, the use of the Ben & Jerry’s brand name in the Indian market will save a

considerable amount of time and money in developing brand recognition, given that

large cities such as Mumbai and New Delhi are familiarized with Western culture and

brands. Moreover, through franchising, Ben & Jerry’s will be able to tap into the

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franchisee’s knowledge of local market’s wants and needs, which is paramount in a

highly fragmented market such as India (Franchising in India, 2010). Next, Ben & Jerry’s

experience in developing international franchising contracts will entail a higher chance

of success in new markets.

Nevertheless, on top of conducting extensive market research, Ben & Jerry’s should be

able to select an appropriate business operator in order to be successful in their

franchising agreement. Franchisees are thus carefully chosen in order to guarantee good

partnerships. Therefore, local laws regarding franchise operations, property rights,

patents, etc. should be taken into consideration. Hence, a high degree of market

knowledge is key in success (Franchising in India, 2010).

5.2 Target Customer Profile

With a total population of 1,326,801,576(May 2016 est.), a population growth rate of

1.312% and prospects of the dairy market to grow at a CAGR of 17% during 2012 – 2017

, the Indian market shows of considerable growth opportunities for Ben & Jerry Given

that in rural areas, the consumption of ice cream has become increasingly popular due to

small producers of kulfis/ice cream, Ben & Jerry’s should set up their parlours at urban

areas - 30% of population is urbanized - where the ice cream market has shrunk over

recent years. In addition, as Ben & Jerry’s can be considered a luxury product, they are to

target the affluent post-liberalization youngsters who are resident in large cities such as

Mumbai , New Delhi and Chennai .The purchasing power amongst

Indian people is increasing accordingly, turning towards luxury products and lifestyle.

India’s notable young population contributes substantially to the country’s boom in

consumption. According to the ‘Indian Dairy Market Report & Forecast: 2012-2017’, a

noteworthy shift can be noticed in Indian ice cream consumption markets from impulse

treats bought by youngsters to its most frequent use as dessert. However, Indian people

want value for their money. This means that they are very price sensitive unless getting

quality in turn. Therefore, Ben & Jerry’s should market their added value. In conclusion,

the large young population, high levels of innovation and increasing affluence and

Westernization will represent a thriving future market for Ben & Jerry’s

(Indian ice cream market, 2016).

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6. Conclusion

Ben & Jerry’s ice cream has grown into an international company throughout the years.

In 2000, they were acquired by Unilever, which enabled them to grow even bigger

internationally. In this export plan, we have chosen Asia as the main market for an

opportunity in regards to international growth through export for Ben & Jerry’s, after

which India was chosen as the most suitable option within Asia. There are multiple

reasons for this export choice, such as market growth, trend and target customers, as

well as their unique selling proposition.

Macro-economic factors including political and economic factors have been scrutinized

along with cultural and legal implications on doing any business in India. Ben & Jerry’s

products should adhere to the food and beverages laws in India and have a trademark

application in India. The industry in which Ben & Jerry’s will operate has been defined as

the ice cream and frozen desserts industry and 2 major competitors have been identified

in premium market segments in which Ben & Jerry’s will operate with some minor

players as well. Consumer behavior patterns have also been scrutinized including the

price sensitivity and the changing consumer behavior including experiencing in the ice

cream parlours and substituting traditional desserts with ice cream is analyzed as well.

Ben & Jerry’s most appropriate market entry mode will be through franchising, focusing

on affluent post-liberalization youngsters in large cities such as Mumbai, Delhi and

Chennai. Franchising will help Ben & Jerry’s keep sufficient control by providing training

and support.

With an expected growth in the ice cream market, income per capita and young

population structure, Ben & Jerry’s will thrive adopting a glocalization strategy: adapt to

local market needs by adopting product and price differentiation strategies without

losing their brand identity.

Regarding regulatory requirements, no specific laws for franchising exist in India.

Nevertheless, Ben & Jerry’s will have to comply with all Acts that govern Product Liability

issues, apply for a Trademark application and ensure proper agreements involving

insurance, method of payment, applicable law etc.

It is concluded that entering through franchising is beneficial to Ben & Jerry’s and metro

cities of Mumbai and New Delhi are concluded as entry points.

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http://www.benjerry.com/about-us/sear-reports/2014-sear-report

Ben & Jerry’s Timeline (2016). Timeline

http://www.benjerry.com/about-us#2timeline

Ben & Jerry’s History (2016). Company History.

http://www.benjerry.com/about-us

Ben & Jerry’s Franchise Opportunities (2016). Franchise Opportunities. http://www.benandjerry.com.au/franchise

Unilever USA Ben & Jerry’s (2016). Ben & Jerry’s: Overview. https://www.unileverusa.com/brands/our-brands/ben-and-jerrys.html

Ben & Jerry’s Board of Directors (2016). Board of Directors. http://www.unilever.com/aboutus/companystructure/.

Hindustan Unilever Limited Introduction (2016). Introduction to HUL. http://www.hul.co.in/aboutus/introductiontohul/.

Hindustan Unilever Limited Company Structure (2016). Company Structure. http://www.hul.co.in/aboutus/companystructure/.

Unilever Company Structure (2016). Company structure: About us http://www.unilever.com/aboutus/companystructure/.

Teatro Naturale (2016). Indian ice cream market to grow of 17% during 2012-2017. http://www.teatronaturale.com/article/4043.html.

Alliant (2016). Ben & Jerry’s – Cause-related campaign. http://com4000chung.alliant.wikispaces.net/Ben+%26+Jerry's.

Choudhary, V. (2012). Ben & Jerry’s may come to India within 6 months: if it happens, the ice cream maker will join other food and beverage chains in trying to expand to India http://www.livemint.com/Industry/TC7tqx0RVOLQMEJGolCMpK/Ben-- Jerrys-may-come-to- India-

within-6-months.html.

Sampselle, D. (2012). Unilever – Ben & Jerry’s: A merger for good? Pepperdine University,14p.ondd.be,Risksrankings, http://www.delcredereducroire.be/en/country-risks/#focusCountry=IN

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iicma.in, news from Business Line, Government to reduce taxes to boost this industry http://iicma.in/business-line/

livemint.com http://www.livemint.com/videos/WioEn5y1o1o/from-the-newsroom:-ben--jerry's- to- launch- in-india-soon.html

Icecream Industry, 123HelpMe.com http://www.123HelpMe.com/view.asp?id=165524

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