Marketing and Ice Cream Essay
The political and financial instability had greatly impacted Russian ice cream industry. The financial crisis in 1998 and the devaluation of the ruble had greatly reduced Russian market’s consumption ability. It also increased the production cost of Russian ice cream producers who relied on external market for raw materials. The shrinkage of frozen import market heavily impacted by the financial crisis forced the wholesales entered the ice cream market, which intensified the competition in the market. Russian government’s value-added tax further decreased the profit of ice cream producers. Beside …show more content…
Q2.Explain what industry participants need in order to compete successfully in the Russian ice cream industry? (Hint: what are the market segments? What resources and capabilities do on need for the more important segments?) (390 words)
According to Russian managers’ perception, an ice cream product line would qualify them to succeed in the market. However, different segment of the market had its special key success factors. Basically, according to different consumption behaviours, the whole market could be divided into three segments: spontaneous, impulsive consumption segment; family consumption segment; café, restaurant consumption segment.
Currently most Russian producers focused on the impulsive consumption segment. Two competencies were crucial to survive in this segment. Firstly, strong distribution ability was a must. Since the consumption was impulsive, the end customers were not loyal to any brands. The coverage of distribution channel was playing an indispensible role in generating revenue. Who could control the Kiosks and Minimarkets would control the whole segment. Secondly, Low cost was