Carvel must go after the “little Emperor” market segment and drive its Marketing strategy
There is scope to create a new demand driven by the kids and disrupting the existing confectionary market segment for ice creams and cake ice creams in specific.
First we shall eliminate the other 2 segments and then derive the fact as to why the segment of our choice is a clear winner. The below mentioned 2 segments have several benefits, such as existing knowledge, higher purchasing power, open mind for novel items and experiences but all of these would be diminished keeping the long term view in mind.
Middle & Upper income working professionals: (drawbacks only) * Conservatizm , preventing risky purchases arising from the cultural opinion of cold being bad for health and with growing health awareness, thus thinking twice about their purchase. * Upper limit to market/ product development and lesser scope for innovation for expanding the market potential. * It is difficult to change existing mind-sets that are culturally driven.
Expat Market: (drawbacks)
Limited in population (100,000)
No scope for further increasing the market or being able to capture other market segments because of focused marketing strategies for this group (ads in English which other segments might not understand)
Focus Marketing resources on positioning in the “The Little Emperor Market”
Kids are the center of parent’s universe; with growing awareness, accessibility and transformation in the economic & cultural scenario globally (due to globalization), kids these days have a lot at their disposal in terms of resources such as knowledge, money, influential power, etc.
They are treated with special treatment. In China specifically, due to the “one child policy” we see even further preferential treatment and attention given to kids by their family members. These kids are continuously spoiled by parents as well grand parents and are used to getting whatever they wish/ please to.
Kids Buzz, brag to all their friends about what they just had.
They are constantly buying items based on their likes rather than paying heed to the price factor of the item. Most kids have a strong inclination towards candies and confectionary items including cakes & ice creams. Hence a perfect opportunity to leverage upon this situation. Rather than consuming the standard ice cream, it would be “nice to have” a different product that suits our taste buds such as an ice cream cake available in different flavors & shapes rather than consuming the normal cakes & ice creams (you get 2 things in 1 – value addition). Kids always want the best and the latest of things and parents want them to posses those. Hence an introduction of a child centric ice cream cake brand would create a wave. Because of kids, parents and others accompanying them will also consume our goods, hence multiple purchase probability is higher here.
Competitors outlook & Scope:
This segment is still a niche. Baskin Robins & Haagen Dazs (closest competitors in premium ice cream market) are focused on providing a different value system to its clientele. Baskins provides fewer flavors in Beijing, and is focused on creating another experience. Haagens provides an up scale experience to its customers. Hence a market different from our and strategy which is a lot more exclusive in nature. Standard ice cream market, which offers ice cream as a commodity hasn’t focused marketing initiatives just on kids specifically. They have done mass communication, commoditization and pricing of products offered.
Demographic (key points)
* Market potential – Population of nearly 1.5 million children in Beijing between the age of 5 and 12. * 2% premium ice cream market will increase at the onset of increased purchasing power & income(80000 Rmb) * Urban Families spending nearly 60% of their disposable income on their children. They
2. Positioning Strategy:
Convince them/ Influence them or their Family members to buy using various strategies and approaches such as: * Product Attributes: Variety of sinful ice cream cakes in mouth watering flavors/ toppings and the possibility to customize the same. Love for sweet nothings which leave you wanting for more. * Benefits offered:
Rich cakes with ice cream with toppings and flavors of different kind. Whenever one wants to consume something sweet, and a lot more filling than an ice cream. Also get the benefit of both ice cream and cake. * Usage occasions
Birthdays, Festivals, School functions and occasions, parties, just to celebrate togetherness, dessert time product, quick bite of something sweet in the middle of the night/ day (96 gms pack) * Users
Parents & grand parents of children, friends, teachers, children themselves, * V/S Competition
Absence of a kid specific ice ceam brand brand perceived to offer that variety and other periferrals * V/S preferences
They could replace other purchases for this. Children want candies, toffees, ice creams, cakes, etc. This is just a different product altogether. It is a combination of everything they love, cream, nuts, cake, ice cream, etc. Tend to give priority to what they have seen their friends having or seen on T.V. Hence build preferences.
2 in 1 value creation. Ice cream & cake. Help parents show their love
towards their kids by buying them this product or just displaying their affection. Kids wanting something will create a hue and cry but will acquire it. Over all product offered to meet these needs is our ice cream cake which will bring people together
3. Product/ pricing Strategy:
Offer a variety of products that already exist but mainly focus on whether it suits our target market. Kids love choice and especially when they have seen or heard of something. They get influenced the easiest and influence others around too.
Blue Ribbon and Novelty cakes can be pushed for special occasions but not all varieties wiil meet the chinese taste buds, hence dropping a few flavors and adding variants such as oreo, chocolate chip, twix, snickers cake etc would do better than mature flavors like coffee.
Regular consumption – the classic cakes for any occasion is the safest bet. It is universal and can be sold on a smaller package size for ready to eat at any point in time. Also designing into special birthday/ event cakes.
“Little Love” & “ Piece of Cake”- can be launched as suggested, for everyday consumption whenever the mother wants to surprise her kid for getting better grades, etc. Size is smaller (patisserie) in 96 gms package.
Compared to other premium players pffering a similar product we see no need to further reduce the price because they are already reduced. There must be Consistency of pricing strategy – Don’t keep changing prices of your products. It looks bad on our International/ Standardized product and quality image that we are trying to build or already have.
We should not compromise on the costs for over runs because we are trying to establish ourselves as premium players and not standard or just a bit above
standard. Being an international company we shall uphold our standardized quality and hence image.
Reduced costs could be achieved by decreasing operational costs and not manufacturing costs. We have the opportunity to project ourselves as “ We want the best for your kids and hence the highest quality of ice cream combined with cakes, for those special occasions or even regular”
We should continue with existing pricing as we are creating a special niche for ourselves and are mid way of standard and extreme premium products.
Free product instead of price cut/ discounts – free toy or coupon for next purchase can be handed over
4. Distribution & promotion:
Do tie ups with school catering to provide cakes on special occasions or as desserts as a part of their meal.
Wanfujing outlet – Good location as when adults shop, kids accompany them and usually knowing their hunger pangs and love for anything sweet would make this an attractive location. Not only for the kids but other market segments. Will help increase visibility of brand and sales especially during weekends. Also a play area can be built in the store if premise permits, where parents can leave the kids and they can enjoy their “Carvel Experience” Outside shopping malls
Continue with Chao Bai – as over heads are low but residential chinese population is there. So good market
Also continue tie ups with super market – local , bakeries (initially only) – to spred the word but avoid doing this on a larger scale. We need to Mainly focus on building our own national brand rather than giving away yourself to other brands to have brand recall and retention and hence conversion and repeat purchases.
Run ads after favorite tv programs of lids
Sponsor kid events such as fun and fairs, kids news papers and comics. Create kiosks outside malls – for tasting and information provision. Set up interactive fun filled events
Have a mascot (eg. Ronald Mcdonald)
Movie theatres and children play park. Presence at local community events involving and spreading”togetherness of family” placing importance on culture and that we support the same and that such good times of togetherness must be celebrated with Carvel.
Special online purchases to track conversions and pay per unit. Effectiveness of our strategy is clearly depicted if children come and buy online with assistance of parents Have a Facebook page to keep kids intrigued and involved about latest offers/ flavors and share the common love for sweet nothings
High Initial spend on advertising. As there is huge scope in the market and will not go waste.
This is our strategy to :
“Being Remarkable rather than forgettable”