Ben and Jerrys Case Study

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Ben and Jerry’s Ice Cream
1997

Ben and Jerry’s
Perry Odak
1997

Background
Ben Cohen and Jerry Greenfield were childhood friends born four days apart in Brooklyn, New York, in 1951. You could say that ice cream runs in their veins. During his senior year of high school, Ben drove an ice cream truck. After high school, he attended and dropped out of various colleges in the Northeast, eventually leaving his studies altogether to teach pottery on a working farm in New York's Adirondack region, where he also dabbled in ice cream-making. Jerry started on a more traditional path. After graduating high school, he attended Oberlin College to study medicine. Jerry worked as an ice cream scooper in the school’s cafeteria. Upon graduating, Jerry returned to New York to work as a lab technician, while applying to medical school without success. During his lab tech days, he shared a Manhattan apartment with Ben. After moving to North Carolina for a few years, Jerry reunited with Ben in Saratoga Springs, N.Y., and they decided to go into the food business together. At first the pair thought about making bagels but decided the necessary equipment was too expensive. Instead, they settled on ice cream. They decided Burlington, Vt., was an ideal location for a scoop shop because it was a college town without an ice cream parlor. They took a $5 course on ice-cream making and in 1978 opened the first Ben & Jerry’s in a converted Burlington gas station.

Summary
Ben & Jerry’s Homemade Inc. (B&J) is one of the two major players in the superpremium ice-cream market in the United States of America. B&J had been very successful throughout the 1980s; controlled by Ben Cohen and Jerry Greenfield. It currently holds 42% of its market. It benefits from its high product quality, social image and marketing strategy, high employee satisfaction, and overall good financial situation while it suffers from high costs of sale, poor policies towards distributors and suppliers, and lack of international focus. While the company made a net loss of $1.9 million in 1994, this was due to an asset write-down of $6.8 million and the introduction of a new line of ice-cream which both can be regarded as nonrecurring events. Debt ratio and liquidity indicate that this financial crisis is temporary. Even with a slowing American economy and with it reduced ice-cream sales, B&J, with its highly differentiated product with luxury character is not as affected by the downturn. However, the company faces the risk of falling behind strong competition. In order to strengthen its competitive position it will have to drive down the cost of sales, expand internationally, and expand domestically. The purpose of this strategic plan is to identify and suggest the optimal solution for B&J to gain a strong competitive position in terms of market share and profitability in its business area. The study team believes that B&J should adopt ways to (1) defend its current market position, ( 2) expand total domestic as well as international market demand, and (3) at the same time drive down production costs.

Objective
The objective of this case study is to develop a conventional marketing plan to put together a marketing campaign for entering the foreign markets.

I.Central Problem
The central problem of this case is the marketing plans needed to capitalize upon the opportunities to double the sales of Ben and Jerry’s in the global markets.

II.Areas of Consideration
On the basis of the analysis I suggests for Ben & Jerry to adopt ways to expand total market demand, and at the same time protect its current market share through good defensive and offensive actions. As B&J suffers from a high cost structure, this situation can be improved through strategic internal and external changes. Part of B&J’s long-term strategy should be to become a market leader, using its competencies in R&D, new production plant and...
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