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Company Background
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Distribution Strategy 595
For instance, one flavor ofConscious Concoctions is
Chocolate Fuclge Brownie ice,cream and frozen yogurt,
Marketing Strateg!
Distribution Strategy
Ben &Jerry's markets its pint ice cream, frozen yogurt,
sorbet, and novelty items at the retail Ievel primarily
Supermarket Distribution
Ben & Jerry's has a reputation for producing gourmer
quality natural ice cream, and for creating innovative
Iighthearted promotions. Most of Ben &Jerry,s marketing revolves around sponsoring peace, music, and art festivals all over the country. During these events, the company draws attention to many social causes as it promotes
its products. Ben &Jerry's uses a mere 6 percent of its
earnings to advertise, and most of this is used to fund
music festivals. The primary goal is to use advertising dollars to return something to the consumer and promote
consumer activism.
to city performing
Ben & Jerry's concentrates heavily on national distribution through supermarkets. Supermarkets are a growing
business, accounting for much of the company's sales
growth, from $97 million in 1991 to gl55 million in 1995.
Most of these supermarkets are reached through wholesalers selected by Ben &Jerry's.
as
cream at proper temperature ranges. Second, wholesalers must demonstrate that they operate socially conscious businesses. As one executive stated, "We have an
opportunity not only to create alliances with busrnesses
Lha[ shar e our social vision, we also seek to influence and
596
Case
13
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Franchislng
As of December 1991, ttrere were three company-owned
and 737 North American franchised Ben & Jerry's ice
cream parlors. The franchised "scoop shops" are located
throughout the United States from Vermont to Califoras well as international markets.
Ben &Jerry's particularly supports franchisees with
a special interest or social focus. For example, in lg90 it
nia,
DiscussionQuestions 597
Mail Order
One distribution strategy that Ben &Jerry's uses is quite
different from other superpremium ice cream companies: The company offers customers the option of buying
ice cream by mail. Ben &Jerry's packs its ice cream and
frozen yogurt in dry ice and ships it anywhere in the
United States. Customers are able to pick from six flavors.
International Licensing
In 1987, Ben &Jerry's began to expand internationally.
The company granted an exclusive license to manufacture and sell its ice cream in Canada and Israel. The international licensee can license new franchisees to sell
Ben &Jerry's ice cream and can also sublicense the manufacture of the ice cream. The licensee must pay an initial fee, plus royalties on the franchises. The agreement
is for a ten-year period with the option to renew. Ben &
Jerry's has a different renewal policy for each country,
and the company reserves the right to terminate an
agreement if the licensee does not abide by the terms.
. In 1990, Ben &Jerry's entered into a joint venture
agreement, called Iceverks, in what was then the Soviet
Union, to establish a Ben & Jerry's ice cream parlor in
the state of Karelia. The goal was to provide a model of a
small-scale private enterprise in the Soviet Union while
fostering international cooperation and global understanding, with profits from the joint venture to be used
for cultural student exchanges. Most of the raw materials
were purchased in the Soviet Union, but some dairy ingredients were purchased in Finland. Twenty-five percent of the finished ice cream products are shipped back
to Finland for resale.
However, Ben andJerry's has come across some distribution crbstaclcs in thesc emerging Russian markcts.
tem that will deliver products to stores on time, consistently, and in good condition. Also, disuibution in Russia
is
often controlled by
Discussion Questions
1.
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