...Analysis Carvel Ice Cream – Developing the Beijing Market Problem (Monica) How to increase sale in Beijing with limited budget while rivals, such as Haagen-Dazs and Baskin-Robbins, are better known in Beijing? Issues: How to introduce cold dairy products to lactose—intolerance customer base who believes that cold food is bad to consume in general? How to increase primary demand of dairy products especially their flagship product, ice cream cake? How to implement purposeful strategies with limited budget? Marketing Mix (Zehra) Product Carvel Beijing has 3 categories of products; fountain ice cream that includes soft and hard ice cream, ice cream novelties that is single serving size ice cream and ice cream cakes. The manager Wang is thinking to bring 2 new types of ice cream cakes from the US; they are Little Love and Piece of Cake since Chinese people eat small size cakes. Price Carvel ice cream cakes are more expensive than local ice cream but cheaper than the main competitors. Flour-based cake that Chinese people prefer for their special days is cheaper than ice cream cake. In order to decrease the cost, Wang plans to change the level of over-run from 30 to 40 per cent to 45 to 50 per cent so he will be able to lower costs by five per cent. Increasing the percentage means people eat less ice cream and more air and it would reduce the quality, however, Chinese people like the ice cream that has more air. Place (Distribution) Carvel Beijing has 10...
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...sales and presence of Carvel in the Beijing Market by educating customers and distributors on a limited advertising budget. * ISSUES: Market-Bob- We can see that Carvel choose Beijing as it first regional market in China to develop, because it’s large population and in which the residents’ income had increased fast. (Average annual base incomes had risen by 75 per cent over the past three years to 161,00Rmb). However, we find that Beijing might not be the best city for Carvel to start its business: first, residents in Beijing are insistent at keeping their old life style and reluctant to try new things, so that they may not very welcome carvel and its products, which might be considered a novel food and a symbol of western life-style. Actually, it is very difficult to change Beijing’s old life style, which has been forged over hundreds years since the city became the capital of China in Ming dynasty. Second, Beijing is in the northeast of China, where is usually very cold in winter- the lowest Temperature in winter may below 10 degrees Fahrenheit. So, the demand to ice cream products in winter in Beijing might be low. * Industry-Bob- We find that there are two categories of ice cream products in Beijing: standard product, which is lower quality, sold in a low price; and premium product, which is customized high quality product, sold in a relatively high price. We did not see that Carvel took much effort to Position itself in either market. * Consumer: JENNA ...
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...must consider. 2. Carvel has a very limited ($20,000) advertising budget for the year. Radio and television advertising are ruled out by the low budget. 3. Several segments of the Beijing population are potentially promising to Carvel. The three most attractive segments are (1) middle and upper class Chinese professionals, (2) "little emperors" (children in one-child homes, who tend to be spoiled by parents and grandparents), and (3) expatriate residents. 4. Costs of Carvel products could be reduced by 5% by whipping more air into the ice cream, but this might compromise Carvel's image for quality products. 5. Wang is considering introducing a new product, the "Piece of Cake" (a small, single slice of ice cream cake) to provide an inexpensive introduction to Carvel's cakes to Chinese consumers. • Carvel's products are available in Carvel retail stores (4 full-service and 6 scaled- down outlets), high-end supermarkets (25 accounts), local supermarkets (25 accounts), bakeries (40 accounts), and restaurants and bars (60 accounts). Case Questions 1. Carvel's new Beijing manager, Steven Wang, has not yet formulated his pricing and product policies. What advice would you give him? Should Wang reduce Carvel's prices, perhaps by reducing product quality? Wang needs to carefully consider the position of Carvel's products vis a vis Baskin-Robbins and Haagen-Dazs products. This is key, developing appropriate product and...
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