Ice Fili Harvard Case
1 - How attractive is the Russian ice cream industry in 2002?
The main data about the attractiveness of this market are:
- The consumption is about 6 times lower than in France, Canada, US because of a different mode of consumption. Indeed, Russians consider Ice Cream as an “on the go” snack and not as a dessert they can have at home.
- producing in Russia implies a certain adaptability of recipes since traditional Russian ice creams contain less fat and are made with natural ingredients plus one must take into account the high seasonality of consumption.
- While the demand for beer, soft drink and confectionary industries is increasing, the demand for ice cream and therefore its production keep on decreasing.
2 - What …show more content…
than for Ice cream. It is exemplified by the fact the demand of Ice Cream is the only one decreasing in 2002.
¤ Buyers’ propensity to substitute: the high level of advertising for substitute products tends to raise the buyer’s propensity to substitute. That is shown by the following figures : “In 2000 the production of ice cream was down 3,5% from the year before; In contrast, the production of confectionaries was up 8%, soft drinks 25% and beer 23%.
3 - What is Ice-Fili’s strategy? How sustainable is their position as market leader?
Objective of the firm: Raise $50 million capital to diversify geographically into eastern Europe and Germany and also potentially taking advantage of a “cash cow” opportunity for producing dry ice and selling it abroad for construction purposes, medical uses and beverages.
Products’ innovation at the heart of the strategy: 20 new products a year
Price strategy: Ice-Fili priced its ice cream products at approximately 6 rubles, placing it in the medium-level category
Distribution strategy: Kiosks account for 70% of sales the remaining 30% are mainly sold (by order of importance): in Minimarts, Gastronoms, Supermarkets and Restaurants
Advertising strategy: Ice-Fili does not spend much on ads while Unilever and Nestlé stand for 75% of ice scream TV ads. And if the brand launched its first TV ad in 2001 it does not use the right method as the company or product name were not even