PRICING PROJECT 2

GROUP 7
Harshit Agarwal B16081
Lakshay Malkani B16086
Eshan Shailendra B16078
Amarnath Dixit B16067
Shreya Agrawal B16109
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1. Product Category:
The product category chosen is Ice Creams.
We have considered 5 Ice Creams brands in our study, which are the following,
 Amul
 Vadilal
 Cream Bell
 Kwality Walls
 Baskin Robins

2. Project Methodology:
1.) Identification of important parameters for Ice Cream category:
We conducted a focus group of 10 ice-cream consumers and came out with 5 important
attributes that are considered by consumers for purchase. These attributes are a mix of
intrinsic and extrinsic attributes. The respondents also came out with relative weightage
for these attributes. The attributes with relative importance are:
Table 1 :-
S. No Attributes Importance
1 Taste 40%
2 Brand Value 30%
3 Ingredients1 10%
4 Nutrition 2 10%
5 Appearance 10%
1. Ingredients refers to the quality of raw material used to make the ice cream (milk based/non milk
based)
2. Nutrition refers to the nutrition chart (Calorie, Proteins, etc.)

2.) Survey and response collection:

We conducted a survey asking the respondents to rate all the 5 brands on the 5 attributes
that we got after the Focus group discussion. The respondents were also asked the
reference price for all the 5 brands.
For the reference price, the respondents were asked to consider 1 scoop of vanilla ice-
cream of each of the 5 brands. (They were shown a standard size of the scoop; proxy was
Rs. 20 cup ice-cream)
We got a total of 59 responses of which 4 were discarded because of incomplete
information provided by the respondent.

3.) Analysis 1: Understanding scatters for all 5 brands:

Basis the responses, we plotted a plot between quality (measured by the weighted
average of the 5 attributes) and reference price given by the respondents. The plots are
as follows:

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In the plots, reference price is on the X-axis and average performance is on the Y-axis

Price - Performance | Amul Price- Performance | Vadilal

6 5

5 4
4
3
3
2
2

1 1

0 0
0 20 40 60 80 100 0 20 40 60 80 100

Insights:
 ‘Reference price’ for Amul shows a very high
deviation amongst the respondents (Rs.15 to
Rs.60).
 This may be attributed to the sales & distribution
team doing an inefficient job of setting uniform
prices between different channels and geographies
Insights:
 Vadilal sees a relatively moderate dispersion in
‘reference price’ (Rs.10 to Rs.40), while
dispersion in ‘performance’ perception is slightly
on the higher end (2 to 4)
 Although a control on reference prices translates
to good distribution practices, dispersion in the
reference price range reflects poorly on the
distribution management

Price- Performance | Cream-Bell Price - Performance | Kwality walls

5 6
4.5
5
4
3.5 4
3
2.5 3
2
2
1.5
1 1
0.5
0 0
0 20 40 60 80 0 20 40 60 80 100

Insights:
 Both ‘Performance’ and ‘Reference Price’ for
Cream-Bell show significant dispersion between
‘2 to 4’ & ‘Rs.10 to Rs.50 respectively.
 The wide dispersion bands can be jointly
attributed to shoddy brand management (for not
being able to create a consistent image about the
brand), and inefficient distribution management
(different reference prices amongst varied
channels and geographies)
Insights:
 While Kwality-Walls has uniform ‘performance’
perceptions (3 to 4.5), indicating a great brand
management, the relatively moderate ‘reference
price’ band (Rs.20 to 50) indicates a less than
perfect price management across different
channels and geographies.

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Price - Performance | Baskin Robbins

6

0
0 20 40 60 80 100 120

Insights:
 Baskin-Robbins is easily the best brand in terms of
‘performance perception’; hence pointing to a well-
managed brand with consistent quality image amongst
the respondents
 However, the dispersion in reference prices for the brand
is huge (20-90), which can either be attributed to lack of
first-hand purchase experience by the respondents, or
different pricing strategies across the geographies

3. Results:
3.1. Statistical Results
Brands Correlation Standard Deviation - Price Standard Deviation - Performance
Amul 0.154622 17.05408 0.650843
Cream-Bell 0.444583 15.42727 0.87089
Vadilal 0.392094 16.39587 0.87089
Kwality Walls 0.25343 20.20191 0.825063
Baskin Robbins -0.18935 22.60004 0.539079

3.2. Interpretations and comments

 Cream–Bell & Vadilal have relatively high positive correlation which means that people who
perceive the quality of these ice-cream is better have higher willingness to pay. This
effectively indicates that if these brands focus improving their quality perception then that
would translate into increase in sales revenue proportionally.

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 For other 3 brands the correlation is low, and for Baskin robbins it is coming out negative,
this might be because of lack of first-hand shopping experience and also shows there is
significant scope for trial generation.

3.3. Price Performance Curve

We have then drawn the price performance curve using regression (by taking the average of
price and quality). We have also plotted the fair Price line. The graphs look as follows:
The price is kept on the X axis and quality is kept at the Y axis.

Price-Performance
BASKIN ROBBINS
4.5 AMUL
4
VADILAL
3.5
PERFORMANCE

3 KWALITY WALLS
2.5 CREAM-BELL
2
1.5
y = -0.0032x2 + 0.298x - 2.8168
1
R² = 0.8586
0.5
0
0 10 20 30 40 50 60
PRICE

Zone of
Unmet Needs

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3.4. Price Performance Curve : Interpretations & recommendations:

 Baskin robins lies on the extreme right end of the price performance curve, signifying that people are
ready to pay a higher price per scoop of Baskin Robins ice cream as they consider it to be of higher
quality.
 Looking at Vadilal and cream bell, we see here that these two different products don’t undergo value
dispersion, since they are priced similarly, and also perceived to be of similar quality.
 We can also see a zone of unmet needs (marked in red), referring to an ice cream which is considered
superior in quality viz-a-viz Kwality walls, but not priced as high as a Baskin robin. This is a huge zone
where we see players like Giani’s and Havemor operating profitably nowadays.

3.5. Market Share : Interpretations & Recommendations

As per the secondary research, we calculated the market share of all the 5 brands. The values are
as follows:
S. No Brand Market Share*
1 Amul 35.4%
2 Vadilal 11%
3 Cream Bell 8%
4 Kwality Walls 19.4%
5 Baskin Robbins <5%
*Source: Business Standard, 2015 report

The interpretation of this market share and our analysis goes as follows:
 The brands we have considered for analysis cumulatively occupy nearly 80% of the total
market, this enhances the reliability of the interpretations that have been derived.
 The high market share of Amul can be attributed to the consistency in the brand
communication and reference price, this can be observed in Table2, which shows Amul
has relatively low standard deviation in terms of price and performance in comparison
with other brands.
 The low market share of Baskin robbins can be explained from Table2, wherein it shows
they have negative price performance correlation and highest standard deviation in
terms of price. The reason as highlighted before could be due to lack of first-hand
experience with the brand.

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