Marketing Industry Analysis

Executive summary

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Situation analysis

Industry analysis

After entering into the Chinese market, carvel find out that, in china, no official consumption data numbers for ice cream exist whatsoever, and what data that are available are notoriously unreliable.

The city’s overall economic growth rate for 1998-99 and 1999-2000 was forecast to be about eight per cent, with inflation expected to be -1.4 per cent. Average annual base incomes had risen by 75 per cent over the past three years to 16100 Rmb; about 300000 people were considered upper-middle or upper income earners based on average annual base income exceeding 29800 Rmb. Subsidized housing, transportation, medical services and education provided the average resident with an estimated total income equal of 80000Rmb per year. By 1998, Beijing Carvel had established 10 retail stores and 150 wholesale accounts throughout Beijing. The company had experienced losses every year since its inception; however, its financial performance had steadily improved. In 1997, sales exceeded 6000000Rmb and the company was forecast to break even within the next year.

The city’s literacy rate was about 90 per cent. Residential freezer ownership amounted to about 15 for every 100 households. China’s consumption of dairy products was among the lowest in the world. Over the previous decade, overall dairy product consumption had tripled in China and that ice cream was the most popular dairy product consumed.

Company

Beijing carvel was established in 1994, it is joint venture equally owned by Carvel Asia Limited and China’s Ministry of Agriculture.

By 1998, Carvel has established 10 retail stores and 150 wholesale accounts throughout Beijing.

Of Beijing Carvel’s 10 retail stores, 4 are full-service, offer all Carvel product lines, and each can accommodate 15 to 20 customers;6 are scaled-down outlets---serve only hard ice cream and cakes and have little or no seating. 5 of them are on the east side of the city but none of them are actually in a foreign-dominated neighborhood. The other 5 are scattered throughout the other sections of the city where few expatriates or tourists ever travel.

The company has 150 wholesale accounts in Beijing now, with 25 in high-end supermarkets, 25 in local supermarkets, 40 in bakeries and 60 in restaurants and bars.

The products in Beijing Carvel fall into three categories: fountain ice cream, ice cream novelties and ice cream cakes.

In 1997, Beijing Carvel sales exceed 6000000 RMB. And the company is about to break even 1998. While 45% of Beijing Carvel sales come from ice-cream cakes, 55% comes from the other products.