Ice Cream Market in India: Changing Tastes Introduction The ice-cream market in

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Ice Cream Market in India: Changing Tastes
Introduction
The ice-cream market in India has witnessed a steady growth over the years. The players in the
organized sector have slowly eaten into the market share of the players from the unorganized
market. The per capita consumption of ice creams in India is still a dismal 106ml per annum
against the consumption of 22litres in the USA. The low consumption on the Indian market
provides fresh avenues to ice-cream manufacturers to expand the market. The total volume of
sales in the ice-cream market is projected to touch 380 million liters by 2018.
Leading players in the Market
Amul, marketed by the Gujarat Cooperative Milk Marketing Federation (GCMF), is the leading
brand in the ice cream market in India. The company has expanded the market with a host of
new launches, and created brand new segments with ice creams in order to meet its goal of
becoming a Rs. 15,000 million brand by 2020. Kwality which joined hands with Hindustan
Unilever Ltd in 1995 to introduce the brand ‘Kwality Walls’ is also a key player in the Indian ice
cream industry. Hindustan Unilever has focused its business in the four metros as well as
Bengaluru and Hyderabad. These 6 cities claim 65% of the total market share (Table 1).
In order to meet its vision of becoming an ‘Indian MNC in frozen foods’, Ahmedabad-based
Vadilal Industries Ltd has consolidated and expanded operations to strengthen its network.
Mother Dairy, Delhi, which was set up in1974, is the wholly owned subsidiary of the National
Dairy Development Board. It launched its ice creams brand in 1995 and has secured 62% of the
market in Delhi NCR. Arun, a leader in south India, markets through its brand Hatsun Agro
Products Ltd. The company controls 56% of the Tamil Nadu market and has a share of 33% in
the southern market. Dinshaws, a key regional force has also established a sound footing in west
India. Table 2 depicts the market share of the leading players in the ice cream market. The
product variations in the ice cream market are depicted in Table 3.
Entry of Multinationals
Unlike the market for other products, the Indian ice cream market is completely dominated by
national payers such as Amul, Kwality, Vadilal, and some regional players like Arun in south
India and Dinshaws in west India. Multinationals are also trying to make their presence felt inthe market. Among them are the Swiss brand Movenpick, Cream Bell, and Baskin Robbins.
However, high prices and some other global factors have restricted the brands’ visibility in India.
The ice cream market provides plenty of challenges and opportunities to national as well as
multinational players.
Suppose you have joined an organization as a market research analyst. Using the information
provided in the case, discuss the following:
1. As per Table 1, branded ice creams have captured 40% of the total ice cream market.
There is a possibility that heavy advertisement and market penetration might have
changed this figure. Suppose you took a survey of a random sample of 2000 consumers
from the entire country. The consumer response showed a purchase of 1650 units of
branded ice cream and 1860 units of unbranded ice creams. Test whether there has been a
significant change in the demand for branded ice creams as an aftermath of the
advertising campaigns.
2. Table 2 gives the information that 35% of the consumers in the market prefer vanilla
flavour. Many new players have entered the market with new brands and flavours.
Suppose from the sample that you have collected, 420 prefer vanilla flavour over any
other flavour. Test the hypothesis that 35% of the consumers prefer vanilla flavour.
3. Table 3 gives the information about the market shares of the major players in the market
in the branded ice cream segment. Suppose Dinshaws believes that its market share will
grow significantly after it adopts a creative advertising campaign. A researcher has taken
a random sample of 2200 consumers and exposed them to the advertisement. Their
preference after the advertisement has been summarized in Table 4. Test whether there
has been a significant change in the preference post exposure to the advertisement. Give
your recommendation whether Dinshaws should go forward with the campaign based on
the consumer response.
Consider 5% level of significance to test the above hypotheses.

Explanation / Answer

1. Here the polulation propotion will be normally distributed because number of sample is 2000 which is sufficient enough to hold CLT.

H0=null hypotheses: there is not any change of the demand of branded ice cream after the marketing campaign

Ha=alternate hypothese: there is a significant change of the demand.

We will do a two tailed test because we don't know on which direction marketing campaign can change the demand.(though there is prior believe thet it will increase demand).

Now ...

p0=hypothesized value=0.40

pbar=sample propotion=1650/(1650+1860)=0.4700855

n=sample size=2000

z=(pbar-p0)/ sqrt(p0*(1-p0)/n)=6.397899

Now at alpha=0.05 two tail critical value zc=qnorm(1-alpha/2)=1.96

so here z>zc that means probability of getting our result is very unlikely and not because of random chance.

so we will reject the null hypotheses.

Conclusion: Marketing campaign has changed the demand for branded ice cream.

2. The answer methodology will be same as the Q1.

Here

H0: 35% people like vanila ice cream

Ha: More or less than 35% people like vanila ice cream

p0=hypothesized value=0.35

pbar=sample propotion=420/2000=0.21

n=sample size=2000

z=(pbar-p0)/ sqrt(p0*(1-p0)/n)=-13.1266

alpha=5%=0.05

zc=qnorm(1-alpha/2)=1.96

Here mod(z)>zc, so we will reject the null hypotheses.

Conclusion: Percentage of people prefer vanila ice cream is not 35%

3. Please post the data for table4. Without the data in table 4 we can't answer that.

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