In the market of premium ice cream Ben and Jerry’s have a strong rival. Haagen Dazs is currently the main competitor in the concentrated market place for super premium ice cream. Substitutes, however, are available. There are other ice creams not in the super premium category. To an extent these are real competitors. However for the market Ben and Jerry’s caters for, the 25-40s with a high disposable income, their strategies should not have a great impact on Ben and Jerry’s.
Dealing with other substitutes is not that simple. Expensive or not, chocolate, cakes, croissants and other post meal consumables are realistic options for the consumer as opposed to ice cream. Ferrara Rocha, a competitor, will assure you that their product is the perfect accompaniment to any meal. Ben and Jerry need to be wary of this. How the consumer makes the decision for ice cream as opposed to chocolate, super premium as opposed to premium or ordinary, and Ben and Jerry’s as opposed to Haagen Dazs, is essential.
Both Ben and Jerry and Haagen Dazs shared 42% of the market share in 1996. At this point and time no other seems to have the ability or financial backing to challenge this. But new entrants in the marketplace is a possibility. However there are two problems to be overcome. The brand and distribution is the first. One has to keep in mind that these are up market consumers where by cheap alternative are not necessarily sought, for then the key element is the brand. The brand and the associated image are something currently only Haagen Dazs and Ben and Jerry’s have. The emotional tie related to Ben and Jerry’s and Haagen Dazs, and everything it possesses is something that will be difficult to emulate. It is a question of I wouldnt be caught dead eating another ice cream. As opposed to This is cheaper and tastes kind of like Ben and Jerry’s so I will buy this from now on.
The other barrier concerns distribution. Ben and Jerry’s is a fresh ice cream and by nature difficult to transport. Consequently distribution to stores around the U.S. and globally will be expensive and require partners such as Dryers that have extensive transportation networks. Of course this is a concern for Ben and Jerry’s because they are having a rival manufacturer distributing their ice cream.
The weakness of Ben and Jerry’s ice cream is the pricing. At one stage their pricing strategy worked really well, however, it has become evident that demand over the recent years has shifted towards lower priced products leaving pricing strategies being a big issue for the company. Up until 1995 all of Ben and Jerry’s promotions were gained through the companies socially conscious practices. However price wars with main competitors left the company having to pull funds off advertising campaigns to fund price discounts and store coupons.
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Sources:
www.benjerry.com
www.dairyfarmersofamerica.com