18 Jan 2010

Sample Essay: Defining Segmentation And Marketing Mix

Introduction:

Ice creams have usually been taken as desserts or sweet dish and a luxury for the ordinary or poor people. However as people are becoming more health conscious and owing to fast life, increasing the habit of fast food intake, the ice cream market is gaining prominence as the various marketing techniques are used to make the product saleable all around the year instead of being a seasonal food. For the sake of marketing the market is segmented broadly into two parts – Impulse ice cream and Take-home ice cream. According to the Mintel report on the ice ream market in U.K. impulse ice cream may be defined as, “single-serve ice creams purchased for immediate consumption” (Mintel, 2007) while take-home ice cream is defined as “any product that comprises primarily ice cream and is intended for consumption in the home, as opposed to an impulse purchase for immediate consumption.” (Mintel, 2007) Therefore the products that find place in the impulse ice ream segment are chocolate bars, cones, chocolate sticks, tubs and cups. These are essentially hand held products and also include a somewhat differentiated set of products like water lollies and water ices. Among the container based products we have bulk scoop ice cream and soft ice cream, which are also sold unwrapped by the multiple retailers and other convenience stores. Take home ice creams include essentially the packaged products especially the handheld multipacks including the chocolate snacks, filled cones and even refreshments for adults. Thus it includes all dairy and non-dairy ice creams of all flavors sold in different packs. Yogurts and sorbets are also not ruled out.

A brief market overview

The market for ice cream increased in UK at an average annual rate of 1.7 percent. The market is lead by Richmond Food and followed respectively by Unilever and Mars. Between 1990-92 impulse ice cream formed 60 percent of the market share and hence ice cream business was seasonal in nature. (Competition-commission, 1994) The ice cream market reached its peak at £1.33 billion even after a hot summer. This shows the gradual departure from the impulse concentration to take home products. Currently the market is worth around £1.25 billion. (Mintel, 2007)

Marketing mix in the two segments: an analysis

In this fast moving era of competition, the promotion of the products will require the use of marketing mix. First and foremost the industry needs to show the consumers how the eating occasions can expand in order to cover most of the year. The children might be engaged in the consumption of ice cream by communicating with their parents. Innovative packaging and flavors will add to the attraction and make it altogether a lucrative package. When it comes to impulse ice creams, packaging is not given much importance since it is for instant consumption and need not be carried. However in case of take home products, flavors and packaging are allotted more time and importance. Indulgence factor has also been kept more in the mind of the manufacturers and retailers. Manufacturers are therefore inclined towards take home ice creams especially in UK where the summer months do not always indicate hot weather. Adult oriented products with premium offerings have helped ice creams find a place in the weekly shopping list. (Benkouider, 2003) This is enabled by the increasing indulgence of the consumers. Introduction of new flavors continue. An instance is Karamel Sutra, which increased the market share of Ben & Jerry’s take home products.

Elements of marketing mix: a comparison of the two segments

The different factors that determine the quality of ice creams are fat content, ingredients (include fruits, flavors, etc), packaging, price (depends on the other factors) and overrun (amount of air incorporated while freezing). Premium products designed mainly for the adults have a less proportion of overrun and high fat content in order to add to the taste. These are designed for the take home products. This is essentially based on the idea that impulse ice creams, which are mainly seasonal, shall in any case find a place in the consumption list of people. However it is the take home products, which can be offered all the year round and thus, requires more attention than usual. This also follows from the specification of a minimum 5 percent milk fat and 7.5 percent milk solids by the Ice Cream Regulations and that of the Milk Marketing Board which specifies a 10 percent dairy fat for the dairy ice creams.

Conclusion

The marketing mix has gained importance during the designing of the products for the UK markets. While importance is increasingly given to the indulgence factor, this is also leading to a rise in pricing as more adults are drawn into the consumer circle. However the impulse segment might just be in need of more packaging and flavor based products since the impulse consumers consist mostly of children who are more attracted to the brightness of packages and colors. (Armitage, 2004) This would help maintain a balance between the two segments.

Reference

  1. Armitage, T. 2004, “Ice cream packaging concept to lure impulsive UK consumers” [online], available at: http://www.foodproductiondaily.com/news/ng.asp?id=55924-ice-cream-packaging [accessed on February 14, 2008]

2.      Benkouider, C. 2003. “Sofa snacking and indulgence drive ice cream growth in the UK” [online], available at: http://www.euromonitor.com/Sofa_snacking_and_indulgence_drive_ice_cream_growth_in_the_UK [accessed on February 14, 2008]

3.      Competition-commission, 1994. “Ice cream: A report on the supply in the UK of ice cream for immediate consumption” [online], available at: http://www.competition-commission.org.uk/rep_pub/reports/1994/351icecream.htm [accessed on February 14, 2008]

4.      Competition-commission, 1994. “The market for impulse ice cream” [online], available at: http://www.competition-commission.org.uk/rep_pub/reports/1994/fulltext/351c3.pdf [accessed on February 14, 2008]

  1. Mintel, 2007, “Ice Cream – UK – December 2007” [online], available at: http://oxygen.mintel.com/sinatra/oxygen/display/id=313418 [accessed on February 14, 2008]
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