Final Report

A Report On

“Launching a New Product” Submitted to the course instructor in part-fulfillment of the course requirement for Introduction to Marketing

Prepared by: Shafayat Hossain Chowdhury ID: 052 061 030 Prashanta Mondal ID: 053 273 030 Aunima Nazmun Nahar ID: 052 164 030 Nargis ID: 052 032 030

Prepared for: Ms. Nazlee Siddiqui

Submission Date: March 30, 2006

TABLE OF CONTENTS Page No. EXECUTIVE SUMMARY……………………………………………………………..02 1. Introduction…………………………………………………………………….03 1.1 Ownership Structure & Business of the Company in Brief…….03 1.2 The New Product to be Launched………………………………05 2. Strategic Planning..............................................................................................05 2.1 Company Objectives & Goals…………………………………..05 2.2 New Product Details…………………………………………….06 2.3 Customer’s Benefit……………………………………………...07 2.4 Company’s Benefit……………………………………………...08 3. Marketing Process…………………………………………………………….10 3.1 Target Market Profile…………………………………………...10 3.2 Positioning………………………………………………………11 3.3 Brief 4P Strategies with the Rationale…………………………..12 4. Conclusion……………………………………………………………………...15 APPENDIX……………………………………………………………………………..17 •

Market Table…………………………………………………………………….17

•

Micro & Macro Analysis………………………………………………………...21

•

Assumptions……………………………………………………………………..23

REFERENCES………………………………………………………………………...24

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Executive Summary This paper has been prepared on the phase of well known Abul Khair Group to launch premium ice cream with the brand “Sub-Frost”, a new brand for the company. The brand is differentiated in terms of quality, uniqueness and nutrition. The company is going to launch the new product with strong company objectives and goals, just like as it uses for its existing products. The new product is going to bring a number of benefits for the company as well as the consumers. The consumers will enjoy a taste of international appetite in Bangladesh. A well calculated target market profile for the new product has been prepared and according to the profile the most important segments are ambitious students and ambitious young professionals of city areas. The positioning of the product has been done accordingly to meet and exceed the expectations of the target market. Certain company strategies to deal with the 4P (product, price, promotion and placement) has also been worked out. The market table deals with the data of the competitors’ products. A proposal has been included before ending the market table. An analysis on micro and macro environment has also been prepared to support the new portfolio. Despite some limitations, which could be overcome by certain precautionary steps, the conclusion suggests that the new plan would work for the company.

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1. Introduction 1.1

Ownership Structure & Business of the Company in Brief Abul Khair Group is one of the largest and rapid growing companies in Bangladesh. It is a family oriented business. It was established in 1953 by late Abul Khair. The company started with Abul Bidi, still a familiar brand for those who smoke bidis. Later on, the company expanded its business to other sectors. It is now one of the most successful companies in terms of professionalism and management excellence. The main business objectives are to prove guaranteed quality, fair and competitive price and optimum services leading to total consumer satisfaction. The product lines of Abul Khair Group include Fast Moving Consumer Goods (FMCG), Industrial Products and Trading. The company has its prime manufacturing ventures in steel products, food and beverage, condensed milk, full cream milk powder, cement, tobacco, soyabean oil, coconut oil, butter oil, tea etc. Over 10,000 personnel are working for this renowned company directly. Among the several units of Abul Khair Group, milk and beverage is one of the most vital divisions of the group. This division produces and packs condensed milk, powder milk, several types of juice, flavored milk, drinks, snacks and supreme quality tea. All of these products ensure supreme quality, availability and customer satisfaction. All the products are produced under better hygienic conditions by using sophisticated technology. Total Quality Management (TQM) is practiced in this division (milk and beverage) and that's why the company was awarded with the certificate of ISO and HACCP. Premium quality raw materials are used to produce all the products. These products are

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distributed under a strong distribution system. For this reason, the company has a large number of satisfied and loyal customers with strong brand image. The vision of the company: “To attain quantitative and qualitative leadership in all the sectors we operate.” The mission of the company: “Consolidate our position in the areas where we lead and continue to invest in people, processes and technology to enhance our organizational capability to ensure long-term and substantial growth. Embracing change at every level to achieve highest level of professionalism remains as the key focus for all.” The different sections of Abul Khair Group are: •

Abul Khair Steel Limited

•

Abul Khair Consumer Goods

•

Abul Khair Tobacco Limited

•

Abul Khair Oil Limited

•

Shah Cement Industries Limited

The products of Abul Khair Group are: •

C.R. Coil

•

C.G.I. Sheet

•

G.P. Sheet

•

Ridging

•

Jhalor

•

Star Ship Condensed Milk

•

Star Ship Full Cream Milk Powder

•

Star Ship Fruit Juice

•

Star Ship Mango Milk

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1.2

•

Star Ship Chocolate Milk

•

Seylon Tea

•

Shaad Snacks

•

Marine-Special Blend

•

Sun Moon-Filter Kings

•

42 No. Abul Bidi

•

Special Abul Bidi

•

Star Ship Soyabean Oil

•

Star Ship Coconut Oil

•

Star Ship Mustard Oil

•

Shah Cement

The New Product to be Launched The new product that we want to launch from this company is premium ice cream, a new portfolio for the markets of Bangladesh. The new product will offer completely unique varieties, will include nutritious ingredients and will be produced according to the international standards in order to provide the consumers of Bangladesh an inexperienced appetite.

2. Strategic Planning 2.1

Company Objectives & Goals The objective of the company is to build profitable customer relationships by serving the appetite of the people of Bangladesh with international quality premium ice creams, with the sense of a difference.

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The company will start by launching four varieties of premium ice cream. Later it will add more unique varieties and keep on improving quality. The company is reluctant to have any compromise on quality. The short term goals of the company: •

To capture the market shares of premium ice cream by 90%.

•

To capture 20% market shares of total ice cream industry within 5 years.

•

To cut down the production cost of premium ice cream by 15% within 3 years.

•

To sell ice creams worth BDT 10,000,000 the first year.

•

To introduce another 15 unique varieties of premium ice cream within 3 years.

2.2

New Product Details We all know what ice cream is. The main idea of ice cream is a chilled layer of cream. Milk is the major ingredient to produce cream, which is later chilled and thus we get ice cream. The major ingredients required to produce ice cream are milk, sugar, food colors, stabilizer, preservatives, glucose, vegetable fat, emulsifier, flavors etc. Nowadays the making of ice cream is not just stuck to its previous ingredients, but new and new ingredients like fruits, cocoa, nuts, biscuits, wafers, honey etc. are being used to craft new varieties of ice cream and when done so the ice cream becomes a premium ice cream. Premium ice cream is quite different in appeal, appearance, packaging, flavor, taste, and price than general ice cream. So keeping all these in mind, the new product has been developed. The new product is promised to maintain and improve quality, offer unique taste and variety, and to give nutrition to health. The new product will enter the market 7

with four different unique varieties; Mixed Fruits, Sundae, Coconut Almond Joy and Double Caramel Decadence. Mixed Fruits and Sundae to be marketed in transparent and hygiene disposable cups, to stay to the promise of quality, with a net weight of 200ml. Coconut Almond Joy and Double Caramel Decadence to be available in stick and the packaging to be used is semi transparent and hygienic packaging paper, to stick to the promise of quality. The logic to use transparent and semi transparent packaging is to attract the consumers, which is also a unique idea. The unique shape and ornamentation of the varieties will be authentic, attractive and appealing, which will be visible through the transparent packages. The ingredients are milk, sugar, vanilla flavor, preserved fruits, glucose, stabilizer and emulsifier for Mixed Fruits. For Sundae the ingredients to be used are milk, sugar, vanilla flavor, chocolate flavor, strawberry flavor, chocolate, preserved strawberry, cashew nuts, emulsifier and stabilizer. For Coconut Almond Joy the ingredients are milk, sugar, vanilla flavor, coconuts, cocoa, almond nuts, chocolate, emulsifier and stabilizer. Double Caramel Decadence will be made using milk, sugar, vanilla flavor, caramel, chocolate, nuts, biscuits, emulsifier and stabilizer. With all these outstanding and nutritious ingredients the taste of the unique varieties will be a new experience for the consumers of Bangladesh. However the consumers will have to pay a marginal high price for consuming the premium product. The introductory prices for Mixed Fruits and Sundae will be BDT 35 and for Coconut Almond Joy and Double Caramel Decadence will be BDT 28.

2.3

Customer’s Benefit

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People eat ice creams for different reasons; some to get relieve from thirst, some for pleasure, some for taste and some to enjoy a special occasion. There are four reputed brands in the ice cream industry. So the consumers have very few options. Besides they don’t have any options for premium ice creams. The new brand can create a difference in this case.

The field is quite competitive. Thus the producers are concentrated to hold the market shares and earn good returns. Some producers are offering low prices to hold the market shares and in a process are forgoing the quality. As consumers we have certain rights and the law protects our rights. We have the right to eat quality foods. But in the ice cream industry, only Igloo of Abdul Monem Ltd. and Kwality of Sanowara Drinks & Beverage Ind. Ltd. have managed to maintain international standards and as a result Igloo received ISO & HACCP certificate and Kwality received ISO certificate. The new brand will protect the rights of the consumers by producing ice creams of international standards from the very beginning and the consumers will benefit from it.

The new brand will provide quality, uniqueness and nutrition. The consumers of Bangladesh have tasted quality ice creams, but not with unique taste and varieties, which only the new brand will provide. Besides, no ice cream has been able to concentrate on nutrition. The new brand concentrating on a new concept like nutrition, which is very important for human health, will add benefits to consumers.

2.4

Company’s Benefit

Bangladesh has a large consumer market. In this large market there are four major competitors in the ice cream industry; Igloo, Kwality, Polar and Savoy. 9

The ice cream industry has been through strong competition from the very beginning. The competition will grow even harder with the introduction of one more new brand. Working from bit different perspectives can help the new brand to avoid the competition directly and grow eventually. Launching the product with some specialties can do the job. Thus it’s better to concentrate on quality, uniqueness and nutrition, which is a new concept for ice creams in Bangladesh. If the company succeeds in doing so, then it will see its sales boosting up.

Milk and sugar are natural products of Bangladesh. So the two most important ingredients required to produce ice cream are in plenty in Bangladesh. Thus the cost of producing ice cream will be less as the main ingredients does not need to be imported, which is a benefit for the company.

Abul Khair Group is already related to the milk products. So they have the major ingredient for ice cream, which is a benefit for them. Their production cost for ice cream will be less than other competitors.

A strong supply chain management can help a new product to gain success. The company has a very strong supply chain management. The suppliers both home and abroad are reliable and efficient, which is a benefit for the company.

The demographic environment is a factor affecting the sales of a product. About 72% population of Bangladesh fall between the age of 3-35 and they are the consumers of 92% of the total ice cream industry. So the market is quite attractive and promises good return, a benefit for the company.

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The economic environment of Bangladesh is improving. People now have more buying power than before. Besides people are now falling for quality and premium products. This also adds a benefit for the company.

There aren’t any policies restricting the ice cream industry and the cultural beliefs also don’t go against the ice cream industry, and these are benefits for the company.

Goodwill and corporate image influences sales. The company has goodwill and excellent corporate image in the general public, the media, and the government and this also adds to the benefits for the company.

3. Marketing Process 3.1

Target Market Profile •

Geographic Region: City areas

•

Demographic Age: 5-49, but special emphasis on age groups of 12-19 and 20-34 Reference Group: Sportsmen and rock stars for age group of 12-19; doctors, journalists and writers for age group of 20-34 Occupation: Students and young professionals

•

Psychographic Social Class: Upper middle class to upper uppers Personality: Ambitious and gregarious

•

Behavioral 11

Benefits: Quality and uniqueness Readiness stage: Knowledge Attitude toward product: Enthusiastic and positive 3.2 Positioning The benefits that customers are looking for in ice cream are Product – Quality, uniqueness, nutrition, hygiene factors, and exception taste Price – Reasonable price Promotion – Well informed and different incentives (discounts, free etc.) Placement – Availability and convenience (super stores, departmental stores and general stores with refrigerating facilities) As the product is a premium one, the product can not position on price and placement. So it’s better to position on product in terms of quality, uniqueness and nutrition. Quality has become a demanding concept in all the products and services nowadays. It’s not just that people are satisfied with a quality product or service, instead they keep demanding a higher quality product and that’s why it is so important to develop the quality of a product or service through times to hold the market share. So trying to position without quality for a premium product would be really destructive. As per the target market profile, the product is targeted towards ambitious and gregarious people. These types of people generally tend to fall for something exceptional and new. Besides, no other competitor has positioned on uniqueness of this product. So positioning the product on uniqueness would be a great distinctive point. Ice cream is generally treated as junk food and unhealthy. A change in this concept can help to capture the market share and also gain a good image. So adding nutritious ingredients to produce ice cream will create a new trend and demand in ice creams. Thus positioning the product in terms of nutrition would be a revolution in the industry.

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Positioning Statement To ambitious young people, who seek for premium quality and uniqueness, SubFrost is the ice cream that will fulfill your aspirations and exceed your expectations through its premium quality, uniqueness and nutritious facts. So you decide, will you have junk ice creams or Sub-Frost?

3.3 Brief 4P Strategies with the Rationale Product Brand name is something that differentiates the product of a company from its competitors. It is very important to choose a brand name that reflects the image of the product and appeals to consumers. “Star Ship” is a famous brand name of Abul Khair Group, but the name does not suit well for premium products. In addition the brand name for ice creams should reflect something chilling and misty. From these aspects “Sub-Frost” seems to be a perfect brand name for premium ice cream. With this new brand name Abul Khair Group will enter a new product category. This strategy is known as New Brands according to the Brand Development Strategy. The new brand “Sub-Frost” would work because of the concept premium ice cream, which is first in Bangladesh. Moreover the consumers will discover unique varieties of ice cream with nutritious ingredients, which no other ice cream in Bangladesh has provided, and will experience an appetite which they have never had before. Furthermore “SubFrost” is committed to maintain international quality and to inform customers about all the facts related to the consumption of the product. Price Price is a very important factor for a new product. It is the base of a product to survive and boost up in the market. The new portfolio and the target market for it is designed in such a way that market skimming results in the best option for

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pricing. First, “Sub-Frost” is a quality premium product and it holds the image of unique variety as well as nutrition to support the introductory high prices, which is 10%-20% high than that of competitors general products. Then, the initial production cost, which is a bit high, can be covered up given the introductory prices for different varieties of “Sub-Frost”. The profit may be less at the beginning, but customer satisfaction and reliability will maximize the profits in the long run. Next, there are already competitors in this market, but “Sub-Frost” can be easily differentiated from the competitors’ brands in terms of its special features. The features that are being offered by “Sub-Frost” actually make the competition indirect. To stop the competitors from competing directly the company must collect the certificate of solitary production and distribution of premium ice creams for at least a year from the government with the help of its existing strong liaisons. Placement Appropriate placement is one of the basics to capture the market share. “SubFrost” is a premium brand ice cream and has a specific target market. So it should be distributed in such places where actually people value something premium and have the capability to consume it. People also tend to spend more when they are on shopping. Keeping in mind all these aspects what seems best for placement are all types of super stores, famous departmental stores of a city, posh departmental stores of a city, some selected general stores of prosperous residential areas, and some well known departmental stores as well as small fast food shops of exclusive shopping centers. People generally spend more when they are on holidays and when they dine out. So well run continental restaurants, exclusive fast food outlets, posh Bengali restaurants, and hi-deluxe hotels will be good options for placement. Also different restaurants and departmental stores of amusement parks, picnic spots, family recreational spots, and tourism spots can increase the sales of the product. The selected options should have good refrigerating facilities so that the consumers get the actual experience and unaffected taste. Intensive distribution will be the process by

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which “Sub-Frost” will reach consumers. How the distribution channel operates is figured out. Producer

Retailers

Sales Force

Consumer Segment

Business Segment

There are no chances for channel conflict in the consumer segment as the company will use its own distribution channel and supply the products at same prices to all retailers. However a conflict may arise if the retailers sell the products to business segment. To avoid this conflict the company must make an agreement with its business segment stating that the business segment will purchase the product only from the company. The company can also supply the product to business segment at the cost it supplies the product to retailers. This will stop the retailers from selling the product to business segment as the retailers will earn no profits. Promotion The people of Bangladesh are much familiar with ice cream and with the introduction of ice cream parlors some people also know what premium ice cream is. Thus the target market for premium ice cream has some knowledge about the product. But the target market has no idea about the brand and its specialties. So according to buyer-readiness stage the target audience is in the awareness stage. The company has to take cautious steps in order to gear up the product to the purchase process. The company has to promote the product in such a way so that the people start liking it. And once that is done the next processes will take place much smoothly as there aren’t any direct competitors 15

in this field. The two best ways to promote the product would be advertising and public relations as personal selling and direct marketing would be too expensive and inefficient strategies for the promotion of the product and sales promotion would not be a good strategy as it will obstruct the image of the premium product. Starting with advertising, curiosity about the product can be created by “to be continued…” ads, which are recent trend in Bangladesh. These ads are generally put in the bottom part of the first or third page of the popular dailies. The ads must be prepared visualizing information on the new product’s specialties, quality, uniqueness and nutrition; and the words being used must be attractive enough to catch the eyes and work the brains of the readers and make them curious to look in the newspaper the next day. The next day people get to know the product in more details along with the brand name. The ads must be strong enough to regulate the curious mind and create eagerness towards trying the product. This strategy has proven to work well. Putting ads on TV channels like Ntv, Channel One, and Channel i between news breaks and popular family soaps is also a good way to promote the product. The ads should motivate the consumers to try the product. For public relations, the different aspects of the product can be introduced by a press release. The company can also sponsor some social welfare programs like forestation, scholarships, saving wildlife etc. to build a good corporate image and gain publicity.

4. Conclusion From the analysis of the reporting it can be stated that the new portfolio is well set for the marketing environment of Bangladesh. The new brand will create a clear distinction with the competitors’ brands if it keeps its promise of quality, uniqueness and nutrition

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However there are some limitations. But given the opportunity of a good market for the product, promising returns on investments, corporate image of the company, strong liaisons of the company and willingness of the company to achieve goals, the limitations could be overcome. As investment costs are too high and Bangladesh lags behind in technology, so the technological environment actually creates some barriers for the new portfolio. But after the high investment costs there will be no emerging costs in the sector and also the market for the new portfolio promises good returns on investments. The new portfolio will increase the goodwill and corporate image of Abul Khair Group. So weighing the future benefits it would be wise of the company to engage itself to the process of launching the new product. The tough competition in the industry seems to be a barrier for the new portfolio in general, but looking deep into the matter with wide views results in a positive feedback. The product is a premium one and none of the competitors are engaged in the premium market for the product, which actually makes the competition indirect. The competitors can create a threatening situation by making their way to premium ice creams. However to stop the competitors from doing so the company has to use its strong liaisons to acquire a certificate of solitary production and distribution of premium ice creams for at least a year from the government. So it can be concluded that the plan to produce and market premium ice creams in Bangladesh by Abul Khair Group would be a revolution in the ice cream industry and the plan would work for the company.

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APPENDIX •

Market Table

Brand Name

Pack Sizes

Price (BDT)

KWALIT Y

Lolly

-

8

Joy

-

10

3 Bite

-

12

Kimi

-

12

Cup

100 ml

12

Rocket

-

15

Chocobar

-

15

Fun

-

18

Milk Bar

-

20

Cone

-

20

Box

½L

55

Box

1L

100

Marketing Company’s Name

Manufacturing Country

Selling Propositions

Sanowara Drinks & Bever age Ind. Ltd.

Banglades h

Go od Taste

18

Ice cream Cake Ice Cream Cake

Brand Name

1L

150

1.5 L

200

Pack Sizes

Price (BDT)

Marketing Company’s Name

IGLOO

Abdul Monem Ltd.

Lolly

-

8

Sandwich

-

10

Cup

100 ml

12

Shell & Core Chocobar

-

12

-

15

Cone

-

20

Mega

-

20

Single Sundae

-

20

Macho

-

25

Nuggets

-

25

Box

½L

55

Box

1L

100

Double Sundae

-

150

Party Time (Gift Box) Ice Cream Cake

-

150

1L

150

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Manufacturing Country

Selling Propositions

Bangladesh

Quality and Good Taste

Ice Cream Cake

Brand Name

1.5 L

200

Pack Sizes

Price (BDT)

POLAR

Lolly

-

8

Raspberry

-

10

Vanilla Strawberry Cup

-

12

100 ml

12

Penguin

-

15

Chocobar

-

15

Vanilla Toffee Jumbo

-

15

-

20

Cone

-

20

Crunchy

-

20

Super Chocobar Cup

-

25

½L

55

Box

1L

100

Box

2L

190

Ripple Ice Cream

1L

120

Marketing Company’s Name

Manufacturing Country

Selling Propositions

Dhaka Ice Cream Ind. Ltd.

Bangladesh

Availability

20

Ice Cream Cake Ice Cream Cake

Brand Name

1L

150

1.5 L

200

Pack Sizes

Price (BDT)

SAVOY Cup

100 ml

10

Chocobar

-

12

Box

2L

150

Marketing Company’s Name Savoy Ice Cream Factory

Manufacturing Country

Selling Propositions

Bangladesh

Low Price

* Data gathered from surveying different general stores of Banani Commercial Area on February 1, 2006

Proposals for the New Brand

Brand Name

Pack Sizes

Price (BDT)

SUBFROS T

Mixed Fruits Sundae

200 ml

35

200 ml

35

Coconut Almond Joy

-

28

Marketing Company’s Name

Manufacturing Country

Abul Khair Group

Bangladesh

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Selling Propositions Quality, Uniqu eness and Nutriti on

Double Caramel Decadence

•

-

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Micro & Macro Analysis The Micro Analysis for “Sub-Frost”: The Company – Abul Khair Group is a renowned business firm of Bangladesh. It has a good reputation in the field of manufacturing. It also contributes much in the economy of Bangladesh. The goodwill has helped the company to gain success in new businesses. All these have been possible because of the well disciplined and better management of the company. The management views its employees as essential contributors towards the growth of the company. The management makes the employees feel the importance of being a team member and maintains a mutual relationship with them. Viewing all these aspects we can say that the environment of the company is excellent to start up the new business. Suppliers - Abul Khair Group has a good number of efficient suppliers both in home and abroad to support their businesses. The company is already related to milk products, which means they have suppliers of milk and sugar. This is a positive sign for the company as they don’t have to look for new suppliers of milk and sugar, the main ingredients to produce ice cream. But they will have to find some foreign suppliers for other ingredients such as preserved fruits, almond nuts, caramel, wafers, stabilizer, emulsifier, food color, preservatives, glucose, vegetable fat, flavors etc. as these are not native products of Bangladesh. Finding foreign suppliers, both reliable and efficient, seems to be an intense problem. But given the goodwill of the company and the company’s current linkage with foreign suppliers, this problem can be overcome. Marketing Intermediaries – Abul Khair Group has very strong marketing intermediaries, and it can be easily judged by traveling different parts of Bangladesh. Even in the rural areas, the goods and services of the company have made their way and are making good business. The company uses its own distribution channel instead of handing over the job to others and this is the secret behind the company’s strong market share. The distribution of ice cream is often handled by its producers in order to maintain quality and to avoid damage. The company is right on to the track as it already has its own distribution channel.

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However, the company needs to make investments to purchase cold storage supply vans. Customers - Abul Khair Group fulfills the needs of a large number of consumers by providing them their expectations. It is a natural tendency of the people to try a new product, and having the goodwill; Abul Khair Group is just in to it. People will try the new product and if it meets their expectations, then Bravo!!! As it is said, “care for the customers, and they will care for you.” Not only the consumer segment customers, but also the business segment customers, such as well run continental restaurants, exclusive fast food outlets, posh Bengali restaurants, and hi-deluxe residential hotels, should be taken care of. The consumer segment customers will be served via super stores and departmental stores. It is not a tough deal and thus it can be stated that the environment is favorable. Competitors - Abul Khair Group has to face an average number of competitors in the field of ice cream manufacturing and marketing. But if it maintains quality and fulfills the consumers’ expectations, then it will have to face two real competitors, Igloo and Kwality. Still the journey will be quite challenging as both Igloo and Kwality have high market shares and have been in the market for long times. Abul Khair Group has managed to keep a friendly and co-operative relationship with its competitors in the current businesses, which is a must in today’s world of business. It should follow the same approach in this case too in order to eliminate the unfavorable situation in the environment of competitors. Publics – All the publics; financial, media, government, local, general, and internal has a positive view towards Abul Khair Group, which is a very good news. The public environment is indeed a great gift for the new portfolio. The Macro Analysis for “Sub-Frost”: Demographic Environment – The people of all age groups are consumers of ice cream, but generally the people between the age of 5 and 35 consume 94% of the total ice cream of Bangladesh. About 72% of the total population falls between this age group. So the market of ice cream is very broad. Many people, who are now between the age of 30 and 35, will consume ice cream even after they cross 35 and many infants will grow old enough to have ice cream. So the future market of ice cream is also very bright. Overall the demographic environment for ice cream is significantly favorable. Economic Environment – Bangladesh is a developing country and it has managed to keep an excellent GDP over the past three years. The purchasing power of the people has also increased, which has led people to spend more on commodities which are not necessities and on leisure. Ice cream is not a necessary commodity and still the market has been quite optimistic in the past years. Now with the increase in purchasing power of the people the market is expected to grow even

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further. Besides people are now willing to spend on quality and unique items even if it is costly. As “Sub-Frost” is aimed to provide something unique with international quality, a bit marginal high price from the competitors will not be a problem given the current economic environment of Bangladesh. Therefore the economic environment favors the new market. Natural Environment – The main ingredients of ice cream are milk and sugar. Sugar comes from sugarcane, which is grown in Bangladesh in plenty, and milk comes from cows and buffaloes, which are also grazed in Bangladesh in large numbers. Moreover the ingredients used to produce ice creams are environmental friendly. Abul Khair Group can work one step ahead by adopting the concept of green marketing using disposable cups and containers for marketing ice cream. In this view, the natural environment supports the new portfolio. Technological Environment – Bangladesh is less developed in terms of technology, and the production of ice cream requires very high technology. Furthermore most of the technology required to produce ice cream needs to be imported either from Europe or Australia. But once established there will not be any soaring costs in the development of the technology as the technology in this field is much steady. The company’s current UHT plant, built for its milk products section, can deal with some of the steps in producing ice cream. So it would be better to build up the ice cream manufacturing plant close to the UHT plant. The company needs to make an effort in order to overcome the unfavorable situation of technological environment. Political Environment – There are not many laws restricting the ice cream industry. The only law is maintaining the BSTI standards, which will not be very tough to maintain. Instead, “Sub-Frost” is determined to maintain international standards. Thus the environment is favorable. Cultural Environment – The people of Bangladesh love sweet food products and milk products. Many of the cultural events require milk products and sweets. Ice cream is a milk product and also tastes sweet. Also there isn’t any ingredient in ice cream which goes against our culture. So promoting the product in a cultural view will boost the markets for it, which ensures a very positive environment for ice cream. •

Assumptions  The company has a very strong supply chain management. The suppliers both home and abroad are reliable and efficient, which is a benefit for the company.  About 72% population of Bangladesh fall between the age of 335 and they are the consumers of 92% of the total ice cream industry.

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 To stop the competitors from competing directly the company must collect the certificate of solitary production and distribution of premium ice creams for at least a year from the government with the help of its existing strong liaisons.  Abul Khair Group has managed to keep a friendly and cooperative relationship with its competitors in the current businesses, which is a must in today’s world of business.  The people of all age groups are consumers of ice cream, but generally the people between the age of 5 and 35 consume 94% of the total ice cream of Bangladesh. About 72% of the total population falls between this age group.  Many people, who are now between the age of 30 and 35, will consume ice cream even after they cross 35 and many infants will grow old enough to have ice cream.  Furthermore most of the technology required to produce ice cream needs to be imported either from Europe or Australia.

References 

Kotler, P. and Armstrong, Gary (2006) Principles of Marketing (11th Edition), Prentice Hall India.  http://www.abulkhairgroup.com 01/02/2006, 17/02/2006 and 23/02/2006.

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