Tuesday, May 5, 2020

Ben and Jerrys marketing strategies Essay Example For Students

Ben and Jerrys marketing strategies Essay Ben and Jerrys marketing strategiesBen ; Jerrys were experiencing a steady growth within their sales figures from 1990 to 1993. However, In March 1994, Cost of Sales increased approximately $9.6 million or 9.5% over the same period in 1993, and the overall gross profit as a percentage of net sales decreased from 28.6% in 1993 to 26.2% in 1994. This loss might have been a result of several reasons, such as high administration and selling costs, a negative impact of inventory management, and start up costs associated with certain flavors of the new Smooth, No Chunks ice cream line. Ben ; Jerrys selling, general and administrative expenses increased approximately 28% to $36.3 million in 1994 from $28.3 million in 1993 and increased as a percentage of net sales to 24.4% in 1994 from 20.2% in 1993. This increase might reflect the increase in marketing and selling expenses and the increase in the companys administrative infrastructure. Ben ; Jerrys loss was not solely due to their employee orientated approach, but they appeared to have taken out a vast amount of capital lease in their aim to automate their production to keep up with the intense competition. As reflected in the balance sheet, Ben Jerrys had reinvested huge amounts of property and equipment in 1994 increasing their long-term debts by almost 45% in 1993. Alternatives available to the consumer now, and in the foreseeable futureHaagen Dazs is currently the main competitor in the concentrated market place for super premium ice cream. Substitutes are however available. There are other ice creams not in the super premium category. To an extent, these are real competitors. However for the market B;J caters for the up market 25-40s with a high disposable income} their strategies should not have a great impact on B;J. The frozen yogurt lines which B;J now provides, has a number of direct competitors to deal with. Dealing with other substitutes is not that simple. Expensive (or not) chocolate, cakes, croissants and other post meal consumables are realistic options for the consumer. Ferrara Rocha will assure you that their product is the perfect accompaniment to any meal. B;J need to be wary of this. How he/she makes the choice for ice cream (as opposed to chocolate etc.) and then super premium (as opposed to premium or ordinary) and then B;J (as opposed to Haagen Dazs etc.) is essential. See section 3.21 Research The possibility of a rival ceasing B;Js place as no.1 or no.2 in the marketplace?Despite after tax losses in 94 both BJ and Haagan had a 42% share in early 95. None at present seem to have the ability or financial backing to challenge this, albeit Edys has Nestle. The possibility of new entrants in the market place is confined by two major problems. The brand and distribution. Remembering that these are up market consumers where by cheap alternatives are not necessarily sought for then the key element is the brand. This brand and the associated image are something currently only Haagan and BJ have. This emotional tie related to BJs and everything it possesses beyond what it is in itself (i.e. a good tasting ice cream) is something that will be difficult to emulate. It is a question of I wouldnt be seen dead eating another ice cream as opposed to this is cheaper and tastes just like BJs so Ill buy this from now on. The other barrier concerns distribution. With ice cream the idea of selling products through the Internet, despite the dried ice, which may accompany it, is not likely to be an option V the consumers will not readily enthuse over the idea. B;Js is a fresh ice cream and by nature difficult to transport. Consequently distribution to stores around the USA and globally will be expensive and require partners such as Dreyers that have an extensive transportation network. It must be noted that this is potentially a concern or risk for B;Js. Having a rival manufacturer distributing their ice cream is likely to cause conflict, and BJ should change this immediately or have an adequate contingency plan . With both the above barriers the key entrants may be the other ice cream manufacturers in the premium or ordinary market, notably the premium. As it is these that already have the distribution network as well as the know how. It will still take a large investment for these manufacturers to sell their image. Due to the baby boom in 1994 the target market of Ben Jerry has declined vastly. Although Ben Jerry still hold a large percentage of the small market share, the company needs to decide on whether this target segment is worth sticking with. At one stage Ben Jerrys pricing strategy worked really well, however it has become evident that demand over recent years has shifted towards lower priced products leaving pricing strategies being a big issue for the company. Until 1994 all of Ben ; Jerrys promotions were gained through the companys socially conscious practices. However price wars with main competitors left the company having to pull funds off advertising campaigns to fund pri ce discounts and store coupons. The Byzantine Empire EssayIt seems like that Ben ; Jerry failed to forecast and acknowledge the changing in consumer tastes, and was faced with increasing competition with Haagen-Dazs, which introduced its low-fat Ultra Premium ice-cream. Their social commitments to their customers community and suppliers have contributed to a successful and unique image, Ben ; Jerry donated a portion of their sales from their Rainforest Crunch Ice Cream back into environmental preservation causes in South America. Ben ; Jerry also established the Ben ; Jerry Foundation, which donated 7.5% of its pre-tax profits helping non-profit organization, such as,h An establishment in New York to help drug addicted pregnant women. h Individuals and families affected by the AIDS virus in Brattleboro. Such efforts had contributed to winning over like-minded consumers, however its arguable to what extent this will have on winning the hearts of international consumers. The question then arises, to what extent does their social unique image affect their consumer behavior?h Ben ; Jerry have an established and recognized brand name. h They have a relaxed, loyal and casual workforce. h Good public and social image due to their principles in social awareness. h Wide variety of flavors in ice cream for customers. h Ben ; Jerry have a limited target market, as their product is niche. h The suppliers and distributors (such as Dreyers) have high bargaining power, which allows them to raise their prices when they like. h They have concentrated more on donating their money to charities therefore neglecting forthcoming changes in trends. h Slow development of new products. h Ben ; Jerry should seek to globalize their product to compete effectively. h Change their current suppliers and distributors, which might enable them to be more cost effectiveh Economical changes such as in inflation or consumer spendingh Social changes within the consumer market such as health conscience attitudes. This report concludes that Ben ; Jerry has the potential to prosper so long as they:h To be prepared for forthcoming changes in consumer needs and wantsh To compromise between maintaining their company image and satisfying their investors needs. h Try to reduce their supplier and distribution costs by considering other options. This report has identified three main areas of concern that need to be addressed;h Introducing an international joint ventureh Maximizing profits through cost efficiency (Economies of Scale)In todays global environment, change rather than stability is necessary. Rapid changes in technology, competition and customers demands have increased the rate at which companies such as Ben ; Jerrys needed to alter their strategies and structures to survive in the market place. As discussed earlier, one of the reasons why BJ have lost market share is because they failed to change themselves and adapt to a new competitive environment because of organisational inertia. To overcome this Ben Jerry need to identify the main barrier to change such as consumer tastes. This can be overcome through the development of a marketing plan, as there seems to be no real evidence that Ben Jerry have done this. Ben Jerrys reliance on cause generated marketing has its benefit but it also has its pitfalls. Cause generated marketing and/or strategy has adaptability, whereas the long-term marketing plan has focus. Therefore a good marketing plan is adaptable. Employee productivity is one of the key determinants of a companys efficiency and cost structure so this needs to be improved upon in order to make the company more competitive. The culture of the organization is strongly influenced by the founders and changes will be hard to achieve. It is not recommended that the culture of the company be changed but that devising new ways to increase employee productivity through the Human Resource Function enhances it. After looking at many different options it is suggested that the employees be put into self-managing teams. Each team will be responsible for an entire task and time deadlines should be given. It is also suggested that pay rewards should be given to the teams that complete their task to the highest standard. This option could lead to a more flexible work force, as employees will get to know each others roles. It can also create a flatter organizational hierarchy, which would make the decision making process a lot quicker even though all employees are still involved. Marketing should make the consumer believe that at a given time, be it on a date or after a meal, that BJ is the perfect conclusion to a perfect lunch or a perfect evening. BJ needs to be aware of group decision especially couples. The idea of marketing BJ as the perfect accompaniment to a date could be profitable. How about the most romantic couple in USA competition?Bibliography:

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