Carvel Ice Cream: Factors the Most Important Their Decision (Case Study Sample)

Carvel Ice Cream (Case Attached)
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1 Based on case data, outline why Carvel entered into China in the first place. Please indicate which factors would have been the most important to their decision.
The idea towards entry into China by Carvel was to come up with an establishment that would act as a holding company for Carvel’s operations in Asia, mostly in Beijing. Carvel named his new company, Carvel Asia Limited. The new firm collaborated with China’s Ministry of Agriculture and developed Beijing Carvel Food Company Limited, which was a joint venture between the two.
The main reason as to why Carvel entered into China was that the economy of Beijing was growing at a good rate, which meant lower inflation, and thus the company could continue with its operations without the fear of having to increase its prices now and then, something that could make it lose its customers and hence destabilizing its returns. Income levels had also risen by 75 per cent over a period of three years. This meant that the average person had enough money to spend and so setting up an ice cream business here would attract more sales since people have money to buy these kinds of products that are mostly considered to be luxurious. The government had also subsidized costs of important services like education, housing and medical which ensured more income to the residents of China as they do not have to pay a lot of money for the services.
2 Outline what the marketing objective(s), target customer(s), and an overall marketing strategy for Carvel in China should be. Be clear in outlining both what they are and why?
Carvel Beijing’s marketing objectives should be to expand to other areas of China. This can be made possible by ensuring that they create a marketing and training base. This would mean targeting new customers which would lead to increased sales. Other objectives include; growing their market share, launching new product lines and building brand awareness to ensure that more people in the country know about their products and what kind of benefits they can achieve from them.
The target customers for Carvel Beijing should be upper and middle earning professionals. This group of people is aged 25 to 45, in search of new experiences. These people have more income than they did some few years back and are hence willing to buy new products for unique experiences. They are therefore a must target group for Carvel.
Another group to focus on is children and teenagers. The imposition of the "one child policy" has provided a market opportunity. It is believed that, the only child of the family is spoiled by many gifts from parents and grandparents. Carvel Beijing should hence reach out to this market and tap it. According to statistics, urban households use over 60% of their income on their kids. This means that, the kids can get anything that they want and since kids love cakes, then this is definitely a market that they should consider exploiting.
The marketing strategy for Carvel Beijing should be based on the targeted segments which are children, teenagers and middle aged persons. Another marketing source will be establishments that have similar consumer demographics as those of Carvel. An example is Baskin-Robbins Company. A strategic relationship with this company will be beneficial for the two as they will grow visibility for each other. The other marketing method will be giving customers coupons to give to their friends to try out Carvel Beijing for the first time. This will provide the newcomer some motivation to try out the firm’s products.
3 Develop a marketing plan (i.e., the 4Ps) to improve Carvel’s performance. For each "P" outline your marketing strategies, tactics, and rationale.
A marketing plan describes the current market position of a firm and the marketing strategy it is using to attain its goals. The 4 P’s are tools that aid firms to be better placed in the market.
The marketing strategy for the product should be to introduce more products and segment each product accordingly. Carvel should target mothers because they love to surprise their families by purchasing a piece of cake on their way home. One of their products, a "Piece of Cake" is very unique since it provides an ice cream cake concept, which the competitors have no idea about. This product should be advertised more and marketed in Beijing so that as many people as possible can know about the product leading to increased sales. The product marketing tactics that can be put into use are; giving customers incentives. This can be done through the use of coupons where a customer is given a coupon to give to a friend who enjoys a reduced price on the product. The company can also integrate with its customers on social networks to ensure that their customers used their product and get the feedback about it.
Pricing is the most important part of a marketing plan since it is the only part that brings returns to the firm. To improve Carvel’s performance, the company should consider increasing their prices or lowering the cost of production. The best strategy here would be to lower production cost and keep the price constant since an increase in price will affect the company’s image when compared to its competitors. The company can use the competition pricing tactic to ensure that their prices are around the same range as those of the competitors so as to keep up with competition. The price rationale here is, Carvel’s prices are the lowest compared to those of competitors and customers are happy with this price are will continue to buy the company’s products.
Carvel need to have a better place and distribution strategy by setting up more stores that will be serving their all their products. They should also expand existing stores so that they can carry more people in them. The company should concentrate more on the Chao Bai store, which is their smallest but provides the highest returns. They should expand it, so as to increase more sales. The presence in wholesale outlets should be increased by talking to more supermarkets, bakeries and bars about adding their products in their establishments. Sales representatives and prospectors should be hired to educate vendors about the products, ho...