Popularity

without
promotion

Dr Amit Rangnekar
www.dramitrangnekar.com
 Case learnings
• Marketing strategies of a local brand going
national
• NPD of Natural
• Scaling up strategies
• Insights into the dynamics, competition and
consumer behaviour in the ice cream market
 Defining moments
• Raghunandan Srinivas
Kamath
• 1960s- Failed Class VII, in
Mangalore, packed off to
Mumbai
• 1984- Fell out with
brothers, opted out of ice-
cream business ‘Gokul's’
• 1994- Lost everything in
tax arrears to IT Dept,
lesson learnt led to
expansion
 Indian Ice cream market
• Indian ice cream market Rs 2,000 crore @ 20%
• India PC ice-cream consumption 106 ml pa, US 22 liters, scope
• Organised players 45% share (Rs 900 crore)
• Gujarat 18% share- Rs 162 crore, Ahmedabad Rs70 crore
• Vanilla+strawberry+chocolate=70%; Butterscotch+dryfruits= 20%
• Catchment- After dinner, movies, malls; home delivery growing
• Unorganised sector- Kulfi, candy, ice fruit reign
 Players
• West 39%, North 28%, South 18% and East 15%
• Highly seasonal- Apr-Jun 47%, winter sharp fall
• Maximum promotional campaigns
• Takeaway and impulse (spot buying) segment
• Mothers Dairy 10 crore ad spend, 2000 TV spots
• National majors- Amul (39%), Walls (11%), Mother Dairy
(10%), Vadilal (9%), Baskin Robbins (3%)
• Regional majors- Pastonji & Dinshaw- Maharshtra, Havmor-
Gujarat, Arun- South, Nirula’s- North
• Metro majors- Natural, Gelato
• Price insensitive
 Amul
• 1996 Gujarat, 97 Mumbai, 98 Chennai, 02 National
• 2001- No 1 in India, now 39% NMS, 4X Walls
• 220 products (flavours, packs, SKU)
• Positioning- Real Milk. Real Ice Cream
• SKU- sticks, cones, cups, family packs, catering/institutional pack
• Competitive advantage- cost leader in milk, national cold chain
• Penetrative price + relentless promotion+ Amul brand equity
• 2007- Sugar free & ProLife Probiotic Wellness Ice Cream
• India’s largest food brand
 Walls
• Kwality- National leader, acquired by Walls
(HUL)1995
• Kwality- in-depth knowledge of Indian market
• Unilever- largest global ice cream maker- $5bn
• Promoted as frozen desserts to be competitively
priced, no milk
• Batterred by Amul on price & milk front
• The Global Scoop
• Unilever is the world's biggest ice cream
manufacturer, with an annual turnover of €5
billion
 Vadilal
• Focus on ice creams
• Gujarat based, local to national player
• Reasonable prices, exclusive ingredients, easily available
• Daily production capacity 1-lakh liters
• 200 products (flavours, candies, cones, cups, party and
family packs and bulk packs SKUs).
• Launch 1 new flavour every month
• NPL- low fat desserts
• Flavors- regular strawberry, vanilla, butterscotch and
chocolate, + exotic Fresh Fruit Fantasies, Nutty Delights
and Romantic Ripples
Mother Dairy
• Mother Dairy growing @30%
• NDDB subsidiary, milk & curd major
• Focus on premium range of ice-cream Rs 170-210 for
1-litre tubs
• North, AP, Mumbai and Kolkata
• Own retails outlets, booths, carts and kiosks.
• Traditional flavours- Firdausi Kaju Kishmish, Zafrani
Kesar Pista and Shahi Meva Malai (mix of kheer and
basundi flavours)
• NPL- vitamin C-enriched Lic Lolleez
• Penetrating distribution and cold chain
 Ice creams- perceptual map
Traditional Industrial

Haagen Dazs
Expensive

Gelato
Baskin Robbins
Nirula’s
Vadilal
Arun Havmor Walls
Pastonji Dinshaw
Affordable

Mother Dairy

Natural

Amul
 Natural- Origins
• 1984- Fell out with brothers, opted out of Gokul’s
• On his own, focus on traditionally made ice creams
• Completely natural, no artificial flavours or preservatives
• Industrial ice creams- 2 key players- Kwality & Vadilal
• Investment- Rs 3L (Settlement+ Own+ friends), Juhu outlet
• "Mumbai gives everyone a chance, so I was not scared to experiment
here. I hired 3 people and insisted my just married wife also join me
in the business. I did not spend too much doing up the interiors; I
kept my outlet simple. I had faith that my products would speak for
me.”
 Ice cream insights
• ‘Whenever Indians wanted to embellish a
seasonal fruit, they often poured milk on it.
Why not do the opposite, embellish my
traditional milky ice cream with fruit? I knew
about fruit, and it was easy for me to choose
the best ones as my father dealt in fresh
seasonal fruits and had taught me about the
fruit trade- how to check fruit ripeness, where
to get quality fruits. So I decided to add
slivers of whichever fruit the customer asked
for, to my traditional, natural ice cream, in
effect, kulfi + fruit. Thus the brand ‘Natural’
was born.”
 Spreading sweetness
• 1994, decade of success, expansion
• Childhood friend, Girish Mallya (SBI) joined
• "The customer is a good teacher. Some of my
customers would give suggestions about flavours,
even tell me how people are getting innovative
with fruits and ice creams in places like Africa and
Singapore. I took all the suggestions seriously.”
 Manufacturing sweetness
• Traditional ice cream making- manual, slow &
laborious
• 3 steps- Boil milk in a kadai, make rabri and cool
it
• TQT method- taste, quality and traditional
method
• No stabilisers or artificial colours
• Challenge- consistency, taste
• Resistors- automation and scaling up
 Manufacturing facility
• Sole factory- Charkop, Kandivili- 4500 sqf
• No equipment to make traditional ice cream or peel fruit
• Developed equipment to enhance the process
• “Sitafal was the biggest challenge as it has to be manually
deseeded. One person can deseed only 2 kgs in a day
manually. Eventually, we developed a machine to do it, and
now we deseed over 500 kg sitafal everyday.”
• “As we use lots of fresh fruits in our ice cream but do not use
any preservatives, distribution is a key challenge as fresh
stocks only have to available at our outlets.”
• Batch production to ensure freshness
 Sourcing
• Dedicated suppliers for
milk and sugar
• Exotic fruits from fruit
growers
• Sitafal-Saswad, Mango-
Ratnagiri
• Regular fruits and dry
fruits from major
markets
• Local sourcing
Flavours

• 15 fruit flavours in 3 months

• Combining traditional ice cream with fruit- super hit
• Instant hit- Sitafal, first sunday after launch- 300 scoops
• Extension- tender coconut, chikoo, jamun, musk-melon, papaya,
apricot, water melon, melon, pineapple, jack fruit
• "We became popular purely by word of mouth”
• 2009- 100 natural flavours, now combinations
• NPL- raw mango flavour 'Pickle‘- lapped up
• Consistency in flavours- biggest challenge
 Pricing strategy
• 1984- Value for money pricing
• Rs 8 for 2 scoops, high value
• 2009- Rs 25/cup, Rs 28 a scoop, VFM
• ½ kg Tubs @Rs 135
• Waffle cone- Rs 4, Amul Rs 4, Baskin Robbins Rs 11
• Round the year flavours- chocolate & dry fruit range, badam,
kesar pista and anjeer, apricot, tender coconut
• Seasonal flavours- chickoo, sitaphal, pineapple, Lichee, jack
fruit, mango & water melon
• All flavours priced the same, except for fresh fruit toppings
 SKUs (Check Menu)
• Special packs
• Tubs
• ½ litre packs
• Cups, cones , waffles
• Seasonal sundaes
• No Family Packs, Candies
• Scope for value addition
 Service
• Tasters
• Friendly service
• ‘Happening’ ambience
• Home delivery- Numbers to avoid delays
• Special storage boxes for trips & picnics
• Crowds- cues
 Franchising
• For faster expansion, better
penetration
• Less investment ensures more
management focus on key areas
• Exclusive outlets
• Rs 12-15L deposit + commission
• Mumbai/ Maha outlets catered from
Mumbai facility
• Ahmedabad outlet- special packaging
(Railways)
• Delhi, Bangalore (airlifting explored)
 Key drivers
• Unique traditionally hand-made taste
• Creamier and richer but distinctly Indian taste
• 100% vegetarian ice creams- pan community
acceptance
• Eatable any day of the year
• Fruity flavours– instant acceptance
• Natural (sans preservatives) appeals better
• Constant innovation with fruits & combinations
 Competition
• Differentiated brand
• VFM pricing
• No advertising, pure WoM
• “When Natural came on the scene, Yankee Doodle and Vadilal
were already established players. We created a stable niche.
Mumbai is receptive to changes, they like to try out new
things, but they are also very loyal customers. Even though
the market is flooded with new products, there will always be
customers, including new ones everyday. Many try to imitate
us but we stay ahead by continuously launching new flavours,
innovative and convenient packaging, and efficient service.”
 Financials
• 1984- Rs 3L
investment
• Lean set up
helped manage
initial hiccups
• 1st Sunday-
Rs1400 from 1st • 2009- Sales Rs
300 scoops 25 cr
(12kg) Sitafal
• Rs 10L from 3.5T
ice-cream sold
ice cream daily
• Net profit Rs 1.5
cr, to double to
Rs 3 cr in 2010
 Geo-Spread
• Franchisee model
• 52 branches- Mumbai, Pune,
Thane and Ahmedabad
• 2010- Delhi and Bangalore
• Juhu Scheme branch still big
money-spinner, Rs 3.5 crore
pa
• Tap home delivery- 33% sales
• Start all-India phone/net
service
 Limca Book of Records
• Ice cream slab (strawberry)
12 feet L*12 feetW*5 feet
height*2.5 feet thickness,
weighing 3,000 kg
• To celebrate silver jubilee
anniversary of Natural’s
• NPL jack fruit to celebrate
Mangalore’s contribution to
Natural’s
 Idol
• Dr TMA Pai of Manipal
• “ Dr Pai collected small
savings from every
household, even 50
paise, and promised a
Medical College and a
bank (Syndicate Bank) in
return. His vision was so
clear from the point he
decided to undertake the
journey.”
 Sweet ambitions
• Now called ‘Our Times Ice Cream’ Pvt Ltd
• Stay focussed on ice creams
• 25 years to open 50 outlets, now opening 50 in 2010
• Penetrate most Indian cities
• Scale up factory from 4,500 to 20,000 sqf
• From 10,000 to 15,000L daily in 2010
• “Being a technical person, it is not very difficult for me
to supervise such an expansion, we are ready to take
the next step forward.“
• NPL- Sugar-free kulfi ice creams
• Son Shrinivas joined the family business
 Diversification
• "For the past 5 years, I have been successful. I
have learnt several lessons, and now know whom
to trust. I have developed a resort at Mangalore,
where I have recreated the life of south India and
the rich traditions of Mangalore. Spread on a 5
acre plot, the resort is set in a natural habitat.
Fruit trees and vegetables grown everywhere. It
will be open soon.“
• Nature lover, ‘Lands Flavour Resort’, Mangalore-
Bantwal national highway in Adyar village
 4Ps
Product- Fresh and pure,
traditionally made ice cream

Price- VFM

Promotion- Word of Mouth

Place- Franchised
outlets
 Natural- STPD

Segment

Urban middle+ fly Target

who celebrates Traditional &
fruity ice
Positioning
cream lovers
Fresh, natural &
fruity ice creams
Differentiation
Unique taste,
exotic fruity
flavours
 Brand Natural- value
proposition
Emotional- pure & natural

Economic- Functional-
VFM fresh, taste,
quality

Brand personality-
simple, fun, innovative, specialist
 Brand Identity & Image
Natural,
fruity,
Brand ice
Position
cream-
unique
taste
Identity
Image Natural
(Perceptio Fruity
Fresh
Traditiona n)
l
Fruity
100% Veg

Customer’s Mind
 POP & POD

POP POD
Ice cream
Traditionally
Milk rich made
Dry fruit flavours
No preservatives
Regular flavours
Fresh
Multi packs
Waffle cone
Fruit
combinations
Own outlets
 Aaker’s Model- Natural’s
Extended

esh Av
F r Core ail
ab
ilit
y
Value Taste
Brand Essence:

Traditional, pure ice

cream
Quality Fruits
Sp
ec
ia lis ot ic
t Ex
 Natural- Kapferer’s Brand Identity
Prism
Physique (Purpose)- Personality (Soul)-
Taste, Quality Pure, Traditional, Fresh
Externalisation

Internalisation
Relationship Culture (Brand in
(Brand to customer)- customer’s conscience)
Social, family, ethical Sharing, Indian, unique

Reflection (Customer Self-Image (Customer

identifies wrt brand)- identifies brand wrt self)-
Value oriented, focused Cool, Fun
 Keller’s CBBE /
Brand Equity Pyramid
Building blocks

t
ec
nn
In
te

co
ns

st hip
er
e

om
cu ns
lo
Active loyalty, connect, ya
nd tio
uBra la lt
engagement, y
yo R e

attachment

P
os
bo e

it
t a ns
ut

iv
ha p o

e
re
u W es

ac
R

Quality, credibility, Cool, fun,

t
io
ns P
innovation excitement
ar ing
yo
ho n

O
e
W ea

P
Fruity, tasty, value, exotic Pure, natural, fresh,

/P
M

O
flavours, traditional

D
good service, satisfaction
Identity

ess
Awaren
High recall, awareness,
range, reach
 Testimonials
• “Natural Icecreams is an all time favourite” Sanjeev Kapoor
• “I recommend anjeer, dry fruits and sitaphal flavoured icecreams from
Naturals” Anup Jalota
• “Naturals tender coconut icecream with hot rasgullas - that’s my
recommendation to the truly reckless” Bipasha Basu
• “My fridge is incomplete without icecreams from Naturals” 
Shilpa Shetty
• “Natural icecreams; every flavour you can think of, plus several you
never dreamt even existed” Busybee
• “I like Chickoo & Custard Apple icecream at Naturals, Juhu” 
Viv Richards
 Case questions
• Word of mouth publicity (buzz) made them popular, would
advertising help penetrate deeper and wider
• Traditional ice cream making method made them acceptable,
would expanding scale and scope affect quality and consistency
• Would exclusive outlet franchising be a hurdle to deeper
penetration, are they missing out on MBOs
• Should they leverage popularity at high footfall places- malls,
multiplexes, railway stations and airports- through ‘bare’
formats
• Tapping the Indian diaspora in UAE, UK & US?
 References
• Nuzhat Aziz, Hindustan Times, Mumbai, July 15, 2008
http://www.hindustantimes.com/StoryPage/Print.aspx?Id=db0863
• Cold is gold November 27, 2008 India Today UNUSUAL
ENTREPRENEURS—TRAIL BLAZERS- Jhilmil Motihar
http://indiatoday.intoday.in/index.php?issueid=112&id=21118&o
• MEDIA articles link
http://www.naturalicecreams.in/company/media.asp
• Recession will not melt ice cream sales Ankur Parikh / DNA
Monday, April 6, 2009 11:01 IST
• Mother Dairy aims for Kolkata ice cream market, western
India 2007-05-09
http://www.mangalorean.com/news.php?newsid=104990&newst
• NMIMS website- VC Cases Natural ice cream
http://www.nmims.edu/whats_new/VC_CS_Natural_Ice_cream.pdf