Competition in the Uk Ice Cream Market

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Competition in the UK Ice Cream Market

SYNOPSIS

The UK ice cream market has undergone something of a transformation over the last fifteen years. It used to be dominated by Wall’s Ice Cream and Lyons Maid, and was perceived to be a mature and relatively dull market. Substantial changes to the market have occurred as a result of broad environmental changes, and the entry of new competition. A demographic shift (fewer children) left ice cream marketers searching for new growth segments; they responded by developing premium products targeted at adult consumers. The market grew faster in value terms than in volume terms as the unit price increased. However, aggressive new competition, from Mars in particular, has brought about the demise of Lyons Maid and caused a substantial strategic rethink at Wall’s. Wall’s has tried to maintain its position in the impulse market by preventing retailers from stocking other companies’ products in the freezer cabinets that are supplied by Wall’s. Mars has challenged this policy on legal grounds, arguing that it is anti-competitive. LEARNING OBJECTIVES

- Rejuvenation of an industry, and a product, which was perceived to be mature and stable - Marketers facing an environmental challenge respond by identifying and developing new market opportunities

- New entry competition radically alters the rules of the competitive game - Brand extension by confectionery manufacturers, taking much-loved confectionery products and converting them into successful ice cream brands

- Legal and regulatory action can form a key part of a marketing strategy designed to undermine the position of a key rival
- Application of simple breakeven analysis to a marketing problem. QUESTIONS FOR DISCUSSION

1. The case study contains examples of strategic marketing. List as many examples as you can find of this type of decision. 2. Imagine that you are a strategic analyst working for Nestlé SA in Switzerland. You have been asked to prepare a brief...
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