Arun Ice-cream

Parent company Hatsun Agro Products Ltd

Category Food processing

Sector Food and Beverages

Tagline/ Slogan Life’s Happy moments

USP Exclusive franchise parlors in India

Segment Ice-cream for Quality conscious kids and adults

Target Group Kids and youth

Positioning Exceptional service through exclusive franchise parlors

History and strategy: Established by R Chandramogan, son of vegetable

wholesaler from Tamil Nadu. The suggestion given by his maternal uncle- he went for the

ice cream business. Chandramogan started its business into ice-creams from a

small room in 1970 next to his uncle’s textile shop. Up market segment was dominated by the leading Brands-

Dasaprakash, Joy, Kwality.

He started with a small premise in busy locality of Madras with which he got succeeded and moved to three fold expansion in just second year of its commencement and delivering the customer’s fresh ice-cream from the factory Arun banged the profit of 40,000 in the first year of its business.

The fact that one could get “fresh” ice candies right across the factory counter - major selling point in promoting in-factory sales.

With sharply increased costs & sales not keeping pace, Arun fell into the red: Input costs were rising sharply and manufactures decided to increase the retail price from 10 paise to 15 paise a piece but Arun remained sticked to their decisions, vendors slowly began returning to the fold.

“Arun” upgraded the product quality and supplied homogenized ice cream and also increased the range of product offering and flavors.

With vastly improved quality and larger number of flavors in its offering, Arun was able to break into the tough hotel market.

Enrolled with Davar’s college, an institution offering specialized short duration programs for working executives, and took courses in marketing and personnel management.

Market for ice-cream in madras city & Arun’s search for a niche:

Implementation of Cold Chain Model. Arun captured 5% of the market that includes two segments: 1. Educational institutions. 2. Supplies to ships calling at the Madras Port(ship chandler).

The rest 95 % of the total Madras market, represented by other three segments:

1.General provisions and departmental stores with deep freezers. 2.Hotels and Restaurants.

3. Social events, mostly wedding parties. This market was occupied by other big banner competitors (Dasaprakash, Joy, Kwality).

1. Educational institutions: Typically the college canteen and the hostel mess was virtually

ignored by the leading ice-cream manufacturers such as Dasaprakash and Joy.

He started with IIT Madras and went on signing contracts from different places and felt that college students were more than willing to experiment with a new brand or new flavors.

2. Supplies to ships calling at the Madras Port(ship chandler): He accepted the JIT concept: particular about delivery of ice-cream

just in time for onward transshipment to ships. Chandramogan felt that this segment while fastidious about

Quality, was not that brand driven. “Arun” tried to also capture the interior market of Tamil Nadu : Ice-

cream majors of the time practically ignored the district towns because of sheer logistics problems.

Brand & Promotion Strategy The main advertisement were newspapers & magazines but now the

brand “Arun” was heavily promoted through colorful banners, posters

or flyers and even began investing in technology as well.

They focused sales promotion activities :-

1. “Eat All You Can” ice cream mela scheme

2. “slow speed driving competition” scheme

3. “Phone and Have an Ice-cream” scheme

4. “The Home delivery” scheme

Approach To Pricing & Franchisee ManagementApproach to Pricing: Followed a Cost Plus Approach. Decided to follow a single-tier distribution strategy,

directly supplying ice-cream to the point of retail customer sales.

Then three-tier distribution structure, added substantially to their overall cost of distribution in areas such as packaging, transportation and distribution margins.

Franchisee management: Arun’s factory took orders from franchisees by phone. Upcountry Franchisees were expected to make advance

payment by demand draft to Arun. Franchisees were required to display in the parlors the

price list issued by Arun.

Management & OrganizationExecutive Director: Chairman and Managing Director- R.G. Chandramogan.

Non executive Directors: Ice-cream Technologist: Shankar Stellar role in completing Salem Project- Adinarayan Professional management team: R.Chandramouli (financial controller& company secretory) V.Jaganathan (Marketing manager) Prasannakumar Menta (Head of Production)

COMPETITORS:

KWALITY in the North and the East

KWALITY and VADILAL in the West

DASAPRAKASH in South

JOY in South

SWOT AnalysisSTRENGTHS:

1. Unparalleled service to customers through exclusive franchise

parlors

2. More than 70 mouth-watering ice cream flavors and combinations

3. The first Indian ice cream brand to be certified ISO 9000

4. Attracting more children by offering various schemes along with

ice creams.

5. High quality products with good attractive packaging and

distribution.

WEAKNESS:1.Stronger competition stifling its growth.2. Brand visibility lower than other major players.

OPPURTUNITIES:1. Explore the premium segment and come up with

varieties, which cater to the adult population.2. Increase the distribution network to other parts of the

country.

THREATS:1. Other competitor's also offering products at similar

quality and price.2. Most people are not really brand conscious, so loyalty

might be an issue.