Arun Ice cream,

Case study

PRESENTED BY-
Apurbh singh kashyap
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EARLY PHASE
• Chandramogan ,son of vegetable seller from Tamil Nadu left college
and started Arun Ice-cream yr. 1970 with Rs.15000 and raising a
bank loan of Rs.21000

• He choose a prominent location next to his Uncle retail textile outlet

attracted large numbers of customers.

• First Year Turnover Rs.150000 and profit of Rs.40,000

• He had gone for thrice the expansion than his existing capacity with
relocation in the outskirts as existing location couldn’t be expanded.
EARLY PHASE
3

PROBLEMS FACED
1)Shifting leaded him to selling the hugely expanded capacity during
offseason made it very tough.

Resumption of sales from the old outlet.

2) Higher capacity meant higher fixed costs and company came under
losses.

3)As the Input costs increased so manufacturers decided to increase

retail price from 10 paise to 15 paise a piece

Leading to revolt and boycott by ice-candy vendors

EARLY PHASE
4

PROBLEMS FACED
4) Deteriorating volumes and low profitability made the business
position unpleasant .
•He decided to move upwards into ice cream segment from ice candy
•Increase volumes through bulk institutional sales like selling to hotel.

5) But required upgradation in quality and increase in product offerings.

• Required new equipment's and qualified and experienced persons to

oversee production

6) Arun ice-creams break into hotel market but finances didn’t improve
and faced liquidity and profitability problems

•Because of bargaining power of hotels profitability was very low

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SEARCH FOR A NICHE

1. Searching for a space to fit his business he first targeted
brand conscious deep freezer segment that he failed to
achieve.
2. He then targeted the rest 5% segment. of educational
institutes and ships at the Madras port.
3. Then targeted the ignogred segment like college
canteen and hostel mess segment
As a result by continuous visits finally he got big orders
for supplies to large and prestigious institutes like IIT,
Madras
4.Then he focus to interior parts of Tamil nadu and in a way
captured growing upcountry market
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HITTING RIGHT
BUTTON
1. While serving in upcountry market Arun ice cream began
expanding in Pondicherry ,kumbakonam and Madurai as
absence of good quality of ice cream.
2. Beagn advertising through banners for pre booking
orders
3. As walk in customers were being turned back An agent
KANAKRAJ invested in own freezer and sit and eat
tradition was born which later other agent done the
same. Later 2 were franchise added every month with
strict norms.
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Competitors
1) Kwality

2) Joy

3) Dasaprakash
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UNIQUE SELLING PROPOSITION

Arun ice cream's “sit and eat parlors”

STP(three-step approach to
)
building a targeted marketing plan

• Educational institutions –Hostels & Canteens

• Supply to ships calling at Madras port.
• Focusing Upcountry towns- Madurai,
Pondicherry, Sivakasi, Kumbakonam as there
were no good quality ice-creams were available
at that time
STP(three-step approach to
)
building a targeted marketing plan

• Ice-cream majors ignored District towns which

are virgin, absence of serious competition there
is a chance of striking it big.
• Wedding and other social events.
STP(three-step approach to
)
building a targeted marketing plan

• First tried establishing brand name among

students who were willing to experiment later
after recognition
• Exceptional service through exclusive franchise
parlors.
 Marketing Mix
• Product-
Ice candies to Ice creams
• Price
• Place
• Promotion
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PRICING
COST PLUS APPROACH
• Franchise were given at 20-25% of MRP based on
cost borne by them.
• Single tier distribution strategy by directly supplying
to retail customer sales
• The overall distribution costs of Arun Ice Cream was
about 3-4% of Sales, compared to 8-9% of
competitors
• Such measures resulted in high profitability as
compared to its competitors.
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PLACE

IN TERMS OF FACTORY LOATION

-Established new plant SALEM 320km from madras
also close to Kerela and Karnataka to cater their
requirements.

IN TERMS OF CONVINIENCE
-Sit and eat parlours

IN TERMS OF SUPPLY
-Transportation of icecream boxes in trains for
outstations.
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Promotion

-IN TERMS OF CAMPAIGNS:

1. “Eat all you can”-campaign
2. “Slow speed driving competitions”-campaign

-IN TERMS OF ADVERTISEMENTS:

1. Banners and hoardings
2. Posters and fliers
 SWOT ANALYSIS
Strengths Weaknesses
• Most people are not really brand
• First to trigger the upcountry
conscious, so loyalty might be an
market. Early entrant .
issue.
• Unique service to customers
• Growing competition from
through exclusive franchise
international and other brands
parlors.
….means limited market share.
• Good quality and packaging

Opportunities
SWOT
Analysis Threats

• Increase the distribution

• Health conscious people
network.
refraining from sweets.
• Tie-up with food chains,
• Local ice creams and
restaurants.
sweet dishes.
• Mobile vans for better visibility.
• Kulfi in rural markets.
Thanking you