Arce Dairy Ice Cream

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CASE:ARCE DAIRY ICE CREAM

I.TIME CONTEXT
1991

II.VIEW POINT
Elsie Arce-Romero, VP Advertising and Promotions

III.CENTRAL PROBLEM
How will Arce Dairy Ice Cream compete in the ice cream industry and regain success using its new brand name?

Symptoms:Low market share, wherein, Arce Dairy Ice Cream belongs to the remaining 10% of the ice cream market.

Cause:Poor promotional and distribution strategies

IV.STATEMENT OF OBJECTIVES:

Must Objective:
To increase in one month’s time the company’s market share by 5%.

Want:
To gain favorable market control in the succeeding years.

V.AREAS OF CONSIDERATIONS

A.Internal Environment

Strengths:
1.Arce Dairy Ice Cream is made of fresh carabao’s milk (“all natural”); 2.The finished product is tastier and richer (more flavorful); 3.They have variety of ice cream flavors;
4.They use fresh ingredients like whole seasonal fruits and other natural products; 5.Arce Dairy Ice Cream has distinct taste and high quality (the firm rejects delivery of ingredients that do not pass high quality standards, no matter how inexpensive); 6.They have hundred heads of milking carabaos in the Arce dairy farm; and 7.Their ice cream product has been in the business for years (although Selecta, their former name is now being carried by a competitor, RFM Corporation).

Weaknesses:
1.Poor marketing efforts which resulted to local market share (since they seems to be contented catering to their existing customers only); 2.Low promotional and distribution strategies;
3.Limited outlet/branch; and
4.They have sold their former name “Selecta” which have already gained brand equity.

B.External Environment

Opportunities:
1.People’s acceptance to its new brand name;
2.Better company image;
3.Increase in sales once their market respond to them positively; 4.Increase in market share;
5.They could introduce new product line using their fresh milk; 6.More flavors to introduce using all-natural ingredients;
7.New markets and segments (to indulge the weight watchers and the health conscious crowd) 8.Alliances with other establishments/partnership; and
9.More opportunities for business franchises.

Threats:
1.Stiff competition with other Ice Cream factories that had gained brand equity; and 2.Emergence of other ice cream manufacturing companies.

VI.ALTERNATIVE COURSES OF ACTION

ACA #1: Come up with an intensive promotional and distribution campaign. 1.Can make use of posters which can be posted to sari-sari stores, public vehicles, and supermarkets; 2.Price-off promotions which offer consumers a certain amount of money off the regular price of a product; 3.Printed publications like newspapers and magazines;

4.Product sampling; and
5.Using premiums, offering the product at relatively low cost including items which will serve as bonus to purchases.

Advantages:
1.It obtains consumer trial of a new product;
2.It builds higher level of sales;
3.It creates brand awareness;
4.Price-off promotion induces sales which often earn preferred and special display locations in stores; 5.It attracts brand switchers;
6.Customers can come into contact with the real product; and 7.Increase outlet.

Disadvantages:
1.Limited geographical area will be covered; and
2.Will require additional expenses to be spent in promotions and distribution.

ACA #2: Create an advertisement.

Advantages:
1.Develop positive feeling and association with the brand;
2.Build or reinforce brand image;
3.Customers’ awareness of the brand; and
4.Effective at reaching wide audience

Disadvantages:
1.Cannot afford the high advertising fee;
2.A misuse or miscommunication can bring about negative impact; and 3.Not good at getting customers to make final purchasing decision.

ACA #3: Create a product-variety strategy. (They may produce smaller size of ice cream instead of pint and gallons or use of mugs or other reusable as an...
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