Strategic Marketing Management- EFO210
Ben and Jerry Case :
The ice cream company Ben and Jerry has been created in 1978 in Burlington, Vermont by Ben Cohen and Jerry Greenfield. Since the beginning the two Brooklyn school mates have decided that the company would be social responsible and would have an objective of “caring capitalism”.
The icecream produced (and still produce) by the company were very rich and dense and those characteristics explained that the Ben and Jerry have been classified from the beginning as “super-premium ice cream”. The main competitor of the company has always been “Häagen-Dazs” (classified as super-premium as well). The difference between the two companies is the image promoted (sophisticate vs funky andcaring).
To respond to a difficult beginning finding shelf space in supermarkets, Ben and Jerry did a marketing operation with a demonstration in front of Pillsbury’s headquarters. This action enabled them to gain the press and to have a relevant publicity throughout the US territory. This event was the beginning of the company’s grown up and in the 1980’s there ice creams were available in all thestates.
1. The fallen profits: 1994-1997
In 1994 the company started to face a loss of its profits and something has to be done in order to improve the situation. Ben and Jerry which never had a professional CEO decided at this time to look for one.
So in 1996, Bob Holland arrived to the board of the firm and the relations did not work well and he left it eighteen monthlater. After this failure Cohen and Greenfield had to find an other CEO for their company. In 1997, Perry Odak was hired as Ben and Jerry’s CEO.
2. The situation of the ice cream market in 1997: the reason for Ben and Jerry’s decisions
In 1997 the ice cream market was dominated by the brand Dreyer’s (Nesltlé), following by Breyer’s, BlueBell and Häagen-Dazs. At this time Ben and Jerry had thefifth highest country sales (4%) and 34% of the sales shares of the “super-premium” market behind its main competitor (Häagen-Dazs with 44%).
Both companies have had more or less the same developing way, starting selling in supermarkets and continuing opening stores.
In the 1990’s the level of sales of the company was good but appeared to be limited by the market. Moreover the producingcapacities of the company’s factories were only half used. At this time there were only two possible ways to improve the company’s sales: new products or new markets.
3. Ben and Jerry and their International experience
When Häagen-Dazs was growing internationally (850 stores in 28 countries for a total amount of sales of $700 million in 1997), Ben and Jerry was more hesitating growing abroad ($6million). The problem appeared to be that the Häagen-Dazs’s position in the international market started to be a competitive problem for Ben and Jerry.
Between 1986 and 1997 has entered several markets (Canada, Israel, Russia, UK, France, Benelux) with more or less success. In 1997 the Japan market appeared as being a opportunity for Ben and Jerry. Indeed the ice cream market in Japan was thesecond of the world.
Japan market scoring:
a. Positive points:
- Japanese customers were looking for high quality and wide variety of products
- 42 kilos annual per capita consumption of milk
- Animal based food was commonly accepted at this time
- Häagen-Dazs highest margins
- No need to teach the market
b. Negative points:
- Highly complexdistribution system
- Late entrant (Häagen-Dazs since 10 years and having half of the market)
- Extremely long negotiating process (Japanese culture).
Thinking about entering the Japanese market, the board started to explore possibilities, opportunities and problems. The main problem appeared to be Cohen reluctance entering (does not fit with the social part), the size of the company...