Presented by

NAME: Sunanda Sinha Biki Dipu Nyamen Jini Jhuma Das Bijando Singh ROLL NO. 22 26 27 25 24

1. Introduction 2. Early history and strategy 3. Market for Ice cream in Madras city and Arun search for Niche 4. Breaking into upcountry market4.Manufacturing operation and logistics 5. Brand and promotion strategy 6. Approach to pricing and franchisee management 7. Emerging competitive scenario 8. Ownerships structure and finances 9. Strategic challenges and dilemmas

 Established by R.Chandramogan , Chairman

and Managing Director Popular brand in South India Owned by Hatson Agro

 Son of a vegetable wholesaler

Set up Arun Ice cream in 1970 in Madras. Invested Rs 15,000 and RS. 21,000 through

bank loan. Opened small ice candy unit in a rental premises. Existing competitors 350 in market, not competing leading brands Dasaprakash, joy, kwality.

 95% ice cream vendors engaged in

supplying departmental stores with deep freezers, Hotels and restaurants and social events like wedding parties. Focus in uncovered 5% market educational institutions and supplies to ships at Madras Port.

 Inclusion of district level colleges

Business regaining financial flexibility Business emerging phase of stagnation

Search for new market

Breaking into upcountry market

Initially, Chandramogan targeted towns like Pondicherry , Madurai , Kumbakonam and Sivakasi in Tamil Nadu. Use of banners and hoardings. Had mailers posted to potential upmarket customers.

 Avoidance of

successful traders. Avoidance of elderly and highly educated persons. Preference to youngsters. Preference to persons with average family income and person who failed in the early business endeavors.

 Seventies Learning , Eighties Earning

Efficient Management of inward and outward

logistic. Procurement of Milk - Cost efficient - Seasonal demand and supply imbalance - Direct from farmers - Higher pay for peak season

Month
April-June July-September October-December

Percentage of Annual Sales

34% 22% 19%

January-March

25%

 Low volume do not justify expensive

refrigerator. - Regular passenger train service of the Indian Railway. - 1995 purchased 1st refrigerated vehicle - 250-300 km radius maximum

 Another spanking new Ice cream plant at

Salem(320 km south-west madras & also close to both Kerala & Karnataka border). 22 million in 3 months. Build for peak seasonal prediction.

 Spending large amount of money on .

Promotion and Advertising. Whether Madras city college campus or high traffic jam. Colorful banners, posters or flyers. Through newspapers and magazines. Visual medium for advertising

 7-10 new flavor every year.

30-35 flavor on offer. Madras plant upgradation.

Capacity of 15000 liters of ice cream mix

day. Cost 45 million. Became operation in july1995. Investment restriction on individuals SSI unit Separate firm- The Hutson milk Products

 Eat All You Can Ice Cream Mela.

Slow speed driving competition Phone and have Ice Cream.

Home delivery Scheme

 Entrepreneur managed organization.

CEO actively involved in personnel and

Human Resources management. Maintain Direct line of communication. Key functional positions are controlled by professional management team. Employee relationship is cordial though strike/lockout in 1995.

 Appointing franchisees focus on personal

profile and business background of candidates. Franchisee were given margin t 20% o 25% of maximum retail price. Follow the cost plus approach. Follow single-tier distribution strategy. Discouraged sale except in pre-packaged factory packs with MRP.

 In India had been historically controlled by

strong regional player. Such as Kwality in and East

the North

Kwality and Vadilal

in the west

Dasaprakash,

joy and later Arun in the south

 More over most hotel,resturants also made limited

range of Ice cream flavor in house for their captive need.

In the late eighties MNC, Cadbury India enter the

ice cream market with brand name Dollops.

Ice cream market in India was completely shaken

by Brooke Bond India Limited (BBIL).

Leading international brand such as walls and India

leading brand such as kwality in its port folio, BBIL emerge as a major player in the ice cream market overnight.

 In Feb. 1997 India govt. announce de-reservation of

ice cream manufacture.

Even as Arun emerged to the top spot four

southern states.

 Chandramogan entered the ice cream buss.

In 1970. it was through a partnership firm styled Chandramohon & co. In march 1986 Hatsun Foods Private Limited (HFPL) was incorporated in Madras. On April 30th 1986 HFPL took over the Chandramohon & co as going concern.

 The ownership of the brand name ARUN was also

transfer to HFPL whereby, the company was allowed to register the brand name arun in its own name, subject to royality payment of 1% on gross ice cream sales. In august 1995 the company name was change to Hutsun Milk Food Private Limited (HMFPL) and was also converted into a public limited company Hutsun Milk Food Limited (HMFL) very soon thereafter.

 In jan.1996 HMFL was taken public through an

initial public offering of 1.80 million shares at an issue price of Rs. 45 per share. By march 1996 HMFL paid up to capital increased to Rs.38.4 million. In the year 1997 nearly12% of its fiscal 1997 sales of Rs.184.1 million. The spending in rupee terms represented a near 100% increase over the previous year

 The principal worrying factor for Arun

management was the dramatic developments in the market place. For Chandramogan it was clear that he had to quickly rework the competitive strategy for Arun The key question was whether to agrressively reinforce Aruns competitive profile.

 Further expand its franchisee network in the face

of HLLs competitive onslaught Pursue alternative business opportunities woven around Aruns limited strengths and competencies. He was certainly determine that unlike several other Indian entrepreneurs in the FMGC sector, he would not sell out to the MNCs.

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