...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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...nhận định rõ thực trạng về sản phẩm và giá của kem Carvel nói chung và bánh kem Carvel nói riêng khi phát triển tại thị trường Beijing, nhóm 5 xin đưa ra gải pháp nhằm giúp Wang đưa ra quyết định về hình thành chính sách sản phẩm và giá như sau: * Điều chỉnh giá và sản phẩm Carvel : * Sản phẩm: + “Little Love Cake” – Bánh tình yêu nhỏ - bánh cổ điển nhỏ tròn 6 inch, nặng 600g. Trong khi chiếc bánh cổ điển là 8 inch + “Piece of Cake” – Bánh miếng. * Giá: Bán hai loại bánh nhỏ hơn này với giá rẻ hơn * Nên giảm giá Carvel nhưng như vậy sẽ làm giảm chất lượng sản phẩm. Nhưng nếu làm như vậy sẽ giúp giảm rủi ro mua hàng và thu hút khách hàng mới. Phân tích (không đưa vào silde, chỉ để thuyết trình tại sao chọn phương án và để tham khảo) - “Little Love Cake” – Bánh tình yêu nhỏ - bánh cổ điển nhỏ tròn 6 inch, nặng 600g. Trong khi chiếc bánh cổ điển là 8 inch -> Nhắm tới đối tượng khách hàng còn đang lưỡng lự, cũng như đánh đòn tâm lý vào những bà mẹ muốn thoả mãn “Ông vua con” của họ. + “Piece of Cake” – Bánh miếng. -> Hướng tới thị trường có thu nhập thấp và những người chưa quen với khái niệm bánh kem. Hơn nữa sẽ làm khách biệt hoá giữa sản phẩm của Carvel với đối thủ vì họ không có sản phẩm như Carvel bởi lẽ, với những mẫu bánh nhỏ như vậy có thể ăn ngay tại cửa hàng. Hơn nữa, điều đó sẽ kích thích người dùng muốn mua bánh nguyên ổ khi họ đã biết mùi vị của những mẫu bánh nhỏ. - Giá của Carvel hiện tại đắt hơn giá của bánh kem bản địa, nhưng rẻ...
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...PROBLEM: How to increase 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...
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...Key Points 1. Dairy products are not very popular in China. Health concerns and a large lactose intolerant population are obstacles Wang 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...
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...plans and target the expatriate community, Beijing Carvel has taken the opposite approach. Group three disagrees with Beijing Carvel's decision to deemphasize expats. Latest figures from the Ministry of Labor and Social Security show about 150,000 foreigners working in China, a rise from 120,000 in 2005 (Catering for expatriates). Combined expenditures of expats in China is estimated at 10.8 billion yuan (US$1.35 billion) to 16.2 billion yuan (US$2.03 billion) (Catering for expatriates). Expats are diverse, so the market is vast and the profit potential is unlimited. Ice cream and yogurt are the two most lucrative sectors in the dairy industry and has developed an annual growth rate of about 105% since 1987 (Walls China Ice). Statistics indicate the annual consumption of ice cream is one liter per capita in China (Walls China Ice). Easy storage of ice cream makes it easier for firms to enlarge their presence in the expat customer segment. Nestle has kicked off its marketing campaign with 20 new ice cream products in Beijing. Expats spend one-fourth of their salaries on luxuries such as shopping and eating (Ice Cream Brands). Most expats in Beijing are highly paid senior executives and professionals transferred by their employers to China. Most enjoy generous pay packages, which include subsidized housing, education for children and transport, so spending money is not a problem. Expatriate salaries are higher in Beijing than most Asian countries. A high level executive...
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...alternatives 1. Heavily market product toward youth aged 5-12 by reaching them through schools, parks, children’s activities etc. because 20% of China’s pop. Is under the age of 15. Since there are 1.5 million children in China, we think Carvel could reach between 10% and 25% of that population. With 10% of them buying 2 cakes a year, at an average cake cost of 110 Rmb. Carvel could make 3.3 million Rmb. in revenues. With 25%, they could make up to 8.25 million Rmb. 2. Direct Carvel’s marketing at middle-upper class working professionals age 25-45 by opening stores only in high-end locations (ie. restaurants) to build exclusivity. With 1.9 million people in this market, we think Carvel could reach between 5% and 15% of their population. If 5% were to buy 2 cakes a year at an average cost of 110 Rmb. Carvel could make 2.1 million Rmb. in revenues. If 15% were to do the same, they could make 6.27 million Rmb. 3. Begin our marking process in Beijing with a short-term focus on the expatriates. There are not many of them in comparison to the two other markets we could target, which suits our current marketing budget. They will recognize the brand and we will have easier sales. In the future we could expand to reach other markets. If Carvel were able to reach 20% of this market, with each of these people buying two cakes a year at 110 Rmb. they could have revenues of 4.4 million Rmb. If they were able to reach 30%, their revenues could reach up to 6.6 million...
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...Carvel must go after the “little Emperor” market segment and drive its Marketing strategy There is scope to create a new demand driven by the kids and disrupting the existing confectionary market segment for ice creams and cake ice creams in specific. First we shall eliminate the other 2 segments and then derive the fact as to why the segment of our choice is a clear winner. The below mentioned 2 segments have several benefits, such as existing knowledge, higher purchasing power, open mind for novel items and experiences but all of these would be diminished keeping the long term view in mind. Middle & Upper income working professionals: (drawbacks only) * Conservatizm , preventing risky purchases arising from the cultural opinion of cold being bad for health and with growing health awareness, thus thinking twice about their purchase. * Upper limit to market/ product development and lesser scope for innovation for expanding the market potential. * It is difficult to change existing mind-sets that are culturally driven. Expat Market: (drawbacks) Limited in population (100,000) No scope for further increasing the market or being able to capture other market segments because of focused marketing strategies for this group (ads in English which other segments might not understand) Focus Marketing resources on positioning in the “The Little Emperor Market” Behavioral: Kids are the center of parent’s universe; with growing awareness, accessibility...
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