MARKETING PLAN

HICO

LAHORE SCHOOL OF ECONOMICS

MARKETING PLAN
HICO
Submitted to
Ms. Tania Hassan
Submitted by
Amal Tahir
Anum Khan
Zohaib Tahir
M. Usamah Bukshi
Ahmed Habib Malik
M. Maarij Tahir
Asad Ullah Khan
This report sheds light on the reasons behind the decreasing sales of HICO in Pakistan, and marketing
plan of HICO.
Page 1

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Table of Contents
HAPPY ICE-CREAM COMPANY-AN INTRODUCTION.........................................................5
Proposed Mission Statement of HICO................................................................................6
INDUSTRY OVERVIEW.................................................................................................. 6
History of the Ice-cream Industry...................................................................................... 7
Technological Advancements........................................................................................... 9
Trends and Needs....................................................................................................... 10

Hot Weather and Need for Cold Desserts and Beverages..............................................10

Increased Advertisements.................................................................................... 10

Involvement of Children and Teenagers in Purchase Decision.......................................10

Increasing Trend of Dining Out.............................................................................10

PORTERS FIVE FORCES.............................................................................................. 10

Threat of Intense Segment Rivalry..................................................................................11
Threat of New Entrants................................................................................................ 11
Threat of Substitute Products......................................................................................... 11
Threat of Buyers Growing Bargaining Power....................................................................11
Threat of Suppliers Growing Bargaining Power.................................................................12
PESTLE ANALYSIS...................................................................................................... 12
Political Factors......................................................................................................... 12
Economic Factors....................................................................................................... 13
Social Factors............................................................................................................ 14
Technological Factors.................................................................................................. 16
Legal Factors............................................................................................................. 17
Environment Factors................................................................................................... 17
SWOT ANALYSIS........................................................................................................ 19
Strengths.................................................................................................................. 19
Weaknesses............................................................................................................... 20
Opportunities............................................................................................................. 21
Threats..................................................................................................................... 22

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PORTERS GENERIC STRATEGIES................................................................................. 24

Differentiation........................................................................................................... 24
Product Life Cycle......................................................................................................... 26
Market Research............................................................................................................ 27
Segmentation................................................................................................................ 29
Geographic Segmentation............................................................................................. 30
Demographic Segmentation........................................................................................... 30
Psychographic Segmentation......................................................................................... 31
Defining the target market segment................................................................................. 35
Level of Segmentation................................................................................................. 35
Positioning of HICO....................................................................................................... 36
1.

Determining a Competitive Frame of Reference............................................................36

Identifying Competitors............................................................................................ 36
Analyzing Competitors............................................................................................. 36

2.

Identifying Optimal Points-of-Difference and Points-of-Parity..........................................37

Points-of-Difference................................................................................................. 37
Points-of-Parity....................................................................................................... 37

Brand Mantras........................................................................................................... 38
Positioning................................................................................................................ 38
Establishing the Brand Positioning:.................................................................................40
Differentiation Strategies................................................................................................... 1
Product Differentiation................................................................................................... 2
Consistency in Quality Differentiation................................................................................2
Service Differentiation................................................................................................... 3
Image Differentiation..................................................................................................... 3
Branding Strategy............................................................................................................ 4
The Product Strategy........................................................................................................ 7
Product Classification.................................................................................................... 7
To Differentiate the Product.......................................................................................... 7
Ingredient Branding................................................................................................... 8
The Product............................................................................................................. 8
Labeling Definitions................................................................................................... 8

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HICO

Quality Segments...................................................................................................... 9
Packaging................................................................................................................. 10
Pricing........................................................................................................................ 10
Reference pricing........................................................................................................ 11
Price Quality inferences................................................................................................ 11
Pricing objective......................................................................................................... 12
Placement.................................................................................................................... 13
Marketing Channel System............................................................................................ 13
Consumer and industrial marketing channel level................................................................13
Pull Marketing Strategy................................................................................................ 13
Selective Distribution.................................................................................................. 14
Marketing Communicating Mix......................................................................................... 15
Advertising............................................................................................................... 15
Broadcast Media..................................................................................................... 15
Print Media............................................................................................................ 15
Digital Media......................................................................................................... 16
Display Media........................................................................................................ 16
Sales Promotion......................................................................................................... 17
Events and Experiences................................................................................................ 17
BIBLIOGRAPHY.......................................................................................................... 19
Appendices.................................................................................................................. 20
Appendix 1............................................................................................................... 21
Appendix 1............................................................................................................... 22

HAPPY ICE-CREAM COMPANY-AN INTRODUCTION

HICO Ice-cream Company operates in the Frozen Desert and Ice-cream industry. HICO started
its operations in Pakistan in 1956 and has the privilege of being the first industrial ice-cream
producer in Pakistan. The manufacturing plant of HICO is located in Lahore, Pakistan. It was the
first company to introduce the concept of selling ice-creams on trikes in Pakistan.

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In 1976, Mr. Inam Elahi who was a 7up bottler obtained HICO as part of the deal to acquire
Coco-Cola Bottling plant. It is now handled by Pakistan Fruit Juice Company Private Limited.
The parent company Pakistan Fruit Juice Company Private Limited is now involved in the
production and marketing of beverages, ice-creams, rice and fruit juices. HICO was mainly sold
on trikes outside schools, while some shops were also provided with the ice-creams. At many
points during the operations, Mr. Inam Elahi was faced with the dilemma of closing HICO, as it
was not contributing much to the revenue stream of the parent company. But Mr. Inam Elahi
decided to continue the operations and he realized that expanding the geographical regions
served and reorganizing the business was the only way to survive in the market. Around the same
time, it was rumored that Walls was entering the Pakistani Market, so the management of HICO
decided to expand its manufacturing capacity. (Arifeen, Frozen Food Products Marketing and
Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)
In 1992, the manufacturing capacity was increased to 300 liters per hours and also distributed
freezers in the retail outlets in Lahore. When Walls was introduced in Pakistan, the demand for
ice-cream increased due to the marketing efforts of Walls. It benefitted HICO as well as the
demand for HICO ice-cream increased as well, and they did not have to spend a lot on the
marketing activities to sell the enhanced production. In 1996, HICO further increased its capacity
to 600 liters and to 3600 liters in 1997. It was an important turning point for the company, as the
company enhanced its target market to include Multan, Islamabad, Faisalabad, Peshawar, Gujrat,
Gujranwala, Sialkot and Kharian in addition to Lahore. (Arifeen, Frozen Food Products
Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)
When the plant was acquired, it had a production capacity of 80 liters per hours and was only
sold in 3-4 outlets. Now, HICO has an annual production capacity of 9 Million liters. Moreover,
it has distributed around 8,000 freezers in the major retail shops. (Arifeen, Frozen Food Products
Marketing and Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)
Furthermore the company has gone into backward integration and owns a dairy farm. The farm
houses approx. 200 cattle which are used to provide fresh cream and milk.
HICO is a bureaucratic organization. Formal structures exist in this company. Decisions about
company policy, personnel decisions and financial objectives are made by the director himself.

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HICO

So a typical seth culture exists. HICO does not believe in Bank borrowing and thus they do not
have any debt. Pakistan Fruit Juice Company and its divisions are all independent and cross
borrowing is also not allowed between the divisions. (Ahmed, 2014)
HICO mainly focuses on the expensive take home ice-cream category and generates higher
margins. The product portfolio of HICO includes impulse articles, take home ice-creams, and
larger party packs. The company does not have any distributors. HICO drives it sales from both
the retailers (90%) and the hotels and restaurants (10%). Moreover, the company lacks a mission
statement.

Proposed Mission Statement of HICO

We will continuously strive to provide the best quality modern as well as traditional flavors of
dairy ice-cream to the ice-cream lovers in the Pakistani Market, with the management
philosophy that holds quality above profits, while providing conducive working environment to
the employees and to promote good corporate citizenship behavior in Pakistan.

INDUSTRY OVERVIEW
Pakistan has seen a huge growth in the ice-cream industry since independence. The entry of two
multinational companies i.e. Walls and Omore have created increased demand for ice-cream and
frozen desserts due to their heavy expenditure on marketing activities. For the five year time
period 2004 to 2009, the ice-cream industry has grown by a compound annual growth rate of
6.6% per year. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in
Developing Countries Case Study: Pakistan, 2012) The Ice-cream Industry involves many
players ranging from large scale ice-cream manufactures to the ice-cream parlors.
Ice-cream Industry of Pakistan includes some giants like Walls by Unilever and Omore by Engro
Group. In addition to this, there are some small ice-cream manufactures that cater to the needs of
a few cities of Pakistan like Happy Ice-cream Company, Igloo Ice-cream, Rocco Ice-cream and
Yummy Ice-cream etc. Moreover, there are many ice-cream parlors now operating in the
metropolitan cities of Pakistan. In addition to this, many bakeries operating in the country have
also started their own ice-creams like Gourmet Bakers, DOCE Bakers and Butt Bakers are also
manufacturing ice-creams.

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HICO

History of the Ice-cream Industry

HICO Ice-cream is the pioneer ice-cream manufacturer in Pakistan, which started operations in
1952. HICO Ice-cream is a product of Pakistan Fruit Juice Company Private Limited. HICO Icecream manufacturing facility is located in Lahore, and caters some of the major metropolitan
cities of Pakistan. HICO was the first ice-cream company to introduce the concept of trikes in
Pakistan and continued this sales strategy till 1990, at which point it made ice-creams available
in the grocery stores. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in
Developing Countries Case Study: Pakistan, 2012)
Polka Ice-cream Company was introduced in 1970, which was a big national player. Polka was a
brand that was sold and distributed all over Pakistan. Polka was the trend setter in the industry
of providing freezers to the retailers against a security and also started paying commissions to
retailers for stocking and selling the Polka ice-creams. Moreover, the retailers were also paid so
that the electricity costs could be covered. The mode of advertising used by these ice-cream
manufacturers was radio advertisement while television advertisement was also used
infrequently. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in
Developing Countries Case Study: Pakistan, 2012)
Later in 1974, Igloo Ice-cream was introduced which is a brand of Orient Textile Mills. Igloo
Ice-cream has manufacturing facility in Karachi and has a vast distribution network covering a
large area of Balochistan and Sindh. Yummy Ice-cream and Rocoo Ice-cream were introduced in
Pakistan in 1981. Rocco Ice-cream has manufacturing facility in Islamabad and serves these
cities. Rocoo Ice-cream also established a network of freezers in around 1,000-1,200 outlets, and
followed the same strategy as Polka. (Arifeen, Frozen Food Products Marketing and Distribution
Challenges in Developing Countries Case Study: Pakistan, 2012)
Until the early 1990s, there were only a few ice-cream manufacturers in Pakistan i.e. Igloo,
Polka, Yummy, Rocco and HICO. In 1995, Walls was introduced in Pakistan, which changed the
whole dynamics of the Ice-cream industry in Pakistan. Walls is a brand of Unilever and is sold in
almost 40 countries worldwide. Walls being an international brand, having all the resources,
started giving tough competition to all the other ice-cream manufactures of Pakistan. In 1994,
Lever Brothers tried to acquire Polka Ice-cream for PKR 600 Million, but the bid was rejected by

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HICO

Polka as they demanded PKR 1 billion. But later Polka approached Lever Brothers to merge the
two companies and the two companies were successfully merged in May 1999. Due to the vast
financial resources, vast distribution network, and marketing capabilities, the market share of
Walls increased dramatically in Pakistan. Unlike the other players in the industry, Walls started
giving freezers to the retailers for free. Today Walls is the leader in the frozen desert and icecreams. Another trend that started in this era was the ice-cream parlors. Many famous Ice-cream
Parlors entered the metropolitan cities like Lahore, Karachi, and Islamabad etc. Some of the
famous names include Hot Spot, Gelato Affairs, Marble Stone etc. Omore, a subsidiary of Engro
was launched in 2009. The market share of Omore also increased significantly due to its
intensive marketing efforts. (Arifeen, Frozen Food Products Marketing and Distribution
Challenges in Developing Countries Case Study: Pakistan, 2012)
Ice-cream Manufacturers

Year of Inception

Happy Ice-cream Company

1952

Polka

1970

Igloo

1974

Rocoo

1981

Yummy

1981

Walls

1995

Omore

2009

Ice-cream is a convenience good as people buy it often and keep a stock in their freezers
especially in the summers. They enjoy ice-cream with family and friends. HICO ice-cream falls
into the category of convenience goods and is bought often by the customers as it is available at
some of the leading stores in the town. The brand name is also well known and popular among
the consumers in Lahore. As HICO is classified as a convenience good, therefore, its marketing
team has to create brand recognition and awareness among customers on a high level to gain
their attention. HICO should make its product readily available at all general stores like walls to
gain better market share because availability is the basic requirement for a convenience good to

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HICO

be sold. It should use catchy slogans and mass advertising to reach the consumers. HICO can add
sales promotions and coupons to raise its sales. To earn higher profits, HICO will have to sell in
large volumes to a large market.

Technological Advancements
There has been huge advancement in the ice-cream industry. All the ice-cream manufactures
started supplying the retailers with the freezers for keeping their freezers. Ice-cream cant be
stored in the normal household freezers, but have to be stored in special freezers which need to
maintain the temperature between -18 degrees Celsius to -26 degrees Celsius. These freezers are
more costly as compared to the ordinary freezers. (Arifeen, Frozen Food Products Marketing and
Distribution Challenges in Developing Countries Case Study: Pakistan, 2012)
Moreover, due to the increased load shedding in the country, the ice-cream freezers could not
store ice-creams for a longer period of time. This resulted in the melting of ice-cream, which
could not be sold. Therefore, the ice-cream manufacturers brought the eutectic freezers, which
were specifically designed for use where there are long energy outages to avoid the spoilage of
ice-creams. These freezers have eutectic solution in the walls of the freezers, which can maintain
temperature for long durations of energy outages. (Friz Tech Refrigerators)
Moreover, the trucks used to transport ice-creams are having the same technology. These trucks
can be charged overnight when the truck is parked with a compressor. The next day, the icecreams can be delivered without spoilage because the walls of the trucks have the same eutectic
solution. (Arifeen, Frozen Food Products Marketing and Distribution Challenges in Developing
Countries Case Study: Pakistan, 2012)

Trends and Needs

Hot Weather and Need for Cold Desserts and Beverages

The weather in Pakistan is hot for more than half a year. In this hot weather, the demand for icecreams increase significantly. Apart from that, due to the increased advertisements that promote
eating ice-creams in the cold weather has also resulted in increased demand for ice-creams even
in the winters.

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Increased Advertisements

The ice-cream eating trends have changed tremendously over the past few years, because of the
increased advertisements in the television. These advertisements have caused increased
awareness of the new products offered by the ice-cream manufactures; thus directing the sales of
ice-cream up.

Involvement of Children and Teenagers in Purchase Decision

Advertisements are increasingly targeted towards children and teenagers. This has changed the
way the purchases are made. Previously, only the earners in the family made the purchase
decision, but now the children and teenagers are equally involved and their opinion also matters
in the purchase of products. Therefore, an important trend is the increasing involvement of
children and teenagers in the purchase process. It is because of this trend, that Walls directly
targets children in the advertisement for Paddle Pop etc. Similarly, Walls targets teenagers in
most of its advertisement for Cornetto.

Increasing Trend of Dining Out

There is also an increasing trend towards dining out. It is because of this new trend, that many
new ice-cream parlors have now started operations. Having a dessert after lunch or dinner, has
become a new trend. People love to go out to eat ice-cream with their friends and families.

PORTERS FIVE FORCES

The competition that results from all the five forces lumped together dictates the structure of an
industry and governs the nature of competitive interaction within the industry. A lot of factors
can affect the industry profitability in the short run but the five forces set the industry
profitability in the medium and long run.
Threat of Intense Segment Rivalry
The ice-cream industry contains strong competitors like Walls and Omore and other brands small
competitors like Yummy and Igloo. The industry already faces advertising battles and new

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product introductions by Walls and Omore. Walls being the market leader has a market share of
60% and Omore being the challenger has a market share of 16%.
Threat of New Entrants
The industry faces high entry and high exit barriers. With giants like Walls and Omore already
operating in the industry, new entrants will need to spend huge amounts on marketing and
advertising strategies to gain a market share. The economies at scale in manufacturing,
distribution costs, and marketing at the national level make it very difficult for start-up
companies to enter into the national market. There are substantial costs in raising the capital
needed to build manufacturing facilities that can mass-produce at the national level. Also, the
costs of packaging and storing goods such as ice-cream, at a mass level can generate high costs.
High fixed costs incurred at the time of entry reflect high exit barriers.
Threat of Substitute Products
The number of substitutes being offered by Walls, Omore, etc is already high. This places a limit
on prices and profits. HICO needs to take advantage of technological innovations and changing
consumer tastes and in order to reap profits it needs to capitalize on these changing trends.
Threat of Buyers Growing Bargaining Power
Inflation is on the rise which has led to a decrease in purchasing power, thus consumers are
likely to be affected by price changes. Whenever a buyers disposable income declines, they are
more likely to purchase cheaper brands, and if a buyers disposable income increases, then they
are more likely to buy more expensive brands. Likewise a decrease in disposable income causes
buyers to shift to impulse articles and an increase in income causes them to rely more on family
packs. Since HICO derives most of its revenue from its take home category thus it is likely to be
affected with a decrease in disposable income (economic downturn).
Consumers have become more health conscious over the years and dont compromise on quality.
They want quality products. Using vegetable oil instead of pure dairy products in ice-cream
production can lead to an increase in bargaining power of buyers.

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Threat of Suppliers Growing Bargaining Power

Milk being the basic ingredient required for ice-cream production leads to high competition
among suppliers. There are no substitutes available for milk and being the most important input
leads to an increase in suppliers bargaining power.

PESTLE ANALYSIS
PESTLE analysis is a useful technique to analyze the macroeconomic environment that impacts
an industry. It helps in the identification of opportunities presented and the threats posed by the
external environment.

Political Factors
The political factor of PESTLE deals with the effects of government policy; the decisions made
by the governments and the policies they develop for governing the markets or the industries that
are contributing to the economy of the country. It includes the extent of government direct and
indirect intervention in the business, thus affecting the way a business operates. Other political
factors include the tax policy, trade restrictions, tariffs, incentives etc. (Chidi, Oluwalaiye, &
Okwu, 2011)
Electricity is a critical factor in running machinery in factories and industrial units. The
industries in Pakistan do not get uninterrupted supply of electricity, due to which all the
industries are facing problems in production. All the industries are badly impacted by this and the
ice-cream industry of Pakistan is no exception.
There is a huge gap between the demand and supply of electricity and the governments effort to
fill this gap are negligible. (Islamabad Chamber of Commerce & Industry) Under these
circumstances, the ice-cream industry does not only have to employ expensive sources of energy
but also faces losses due to spoilage of ice-cream.
Apart from that, ice-creams have a GST of 17% on an average due to this; the companies have to
increase their prices. Moreover, there are not many incentives available to the ice-cream industry
by the Government of Pakistan which would encourage investors to invest in this sector.

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Pakistan is characterized by political instability. The violent and unstable environment results in
uncertainty which does not allow the businesses to work efficiently in the country as seen in case
of KPK where the terrorist attacks have been at its greatest frequency during the last decade
which has had a nationwide impact thus affecting individual business units. Ice-cream is one of
the products that people enjoy eating at outdoor locations like malls, parks, after meal, etc. but
political instability and terrorist attacks have forced people to stay at home instead of going out
for leisure time. So, it has disturbed household activities of consumers and now they prefer to
stay at home and this has indirectly affected sales volume of ice-cream producers. Also, the
political instability does not incentivize investors to invest in Pakistan.

Economic Factors
The economic situation includes the income distribution and consumption patterns. The available
purchasing power in an economy depends on current income, prices, savings and credit
availability. Consumer purchasing power is impacted by the inflationary trend in the economy,
hardening interest rates making credits expensive and the fear of an impending recession.
Changes in the wider economy impact businesses. The economic situation in Pakistan has been
worsening for the last few years, which directly affects businesses operating in a country.
Expansions and other investment opportunities have fallen greatly because of instability and
other terrorism issues. In 200809, the economy went into a recession. This had a negative
impact on the industry. During this period unemployment increased. Even employed people felt
the effects of the recession. Many employers were forced to cut their wages or to keep pay raises
very low which led to a decrease in disposable income. Moreover, due to political instability that
is linked with economic stability (stability or instability) and war against terrorism the economic
condition of the country has deteriorated and deprived the economy from money. All this has led
to a huge risk to the continued existence of the daily businesses and hence reduces the buying
power of a normal man.
Another important economic factor that has affected the consumer buyer behavior is the rising
prices in the country. Due to inflation, the purchasing power of the consumers has decreased; this
has impacted the sales of extravagances like ice-creams and other sweets. Following table shows
the inflation rates in Pakistan from October 2013 to April 2014. (Trading Economics)The prices

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are increasing, which has impacted not only the consumers but the producers as well. For the
consumers, the prices have gone up, whereas for the producers the prices of the raw materials
have risen, thus increasing the costs and lowering the profit margins, if prices of end products are
not increased accordingly.
Table 1: Inflation Rate in Pakistan
Month and Year
October 2013
November 2013
December 2013
January 2014
February 2014
March 2014
April 2014

Inflation Rate in Pakistan

9.08%
10.9%
9.18%
7.91%
7.93%
8.53%
9.18%

Source: Trading Economics

In business, the term margin relates to the amount of profit that a business makes on sales.
During the recession, fortunately, the margins on services such as ice-cream remained stable.
Another important economic influence on a business is the level of competition in the industry.
In the frozen food industry, there has been an increase in competition.

Social Factors
Pakistan is the home to almost 180.44 Million people (2013). The population of Pakistan is
expected to increase, which can be mainly attributed to the high birth rate and low mortality rate.
According to an estimate, the population of Pakistan will increase to 234.158 Million by 2013.
(World Population Statistics, 2013).
36% of the population lives in urban areas with a per capita income of USD 125,424 and the
bulk of production of ice-cream goes to these urban centers. There has been an increase in
disposable income within the growing urban middle class. According to an estimate in 2002,
about 6.8 million of the 50 million people living in urban Pakistan belonged to the upper and
uppermiddle class, representing a grocery market worth USD 1.7 billion. Thus, with the
increased disposable income and increased number of people migrating to the urban areas, the
ice-cream market is expanding.

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HICO

Pakistan is a country that is enjoying consumer boom for over a decade now. When we go back
to the nineties, in Lahore there were two ice-cream parlors mainly Polka Parlor and Yummys 36.
Since then the ice-cream market has evolved to a great extent. Brands like Walls and Omore have
stepped in, also frozen yogurt outlets available in many areas which has changed the whole
dynamics of the ice-cream market. There is an increased trend of dining out now, which has
resulted in increased sales of ice-creams sold in ice-cream parlors.
Not only the ice-cream market has evolved but new consumer needs and wants have surfaced. In
the eighties there were just three visible brands HICO, Polka and Igloo. Kulfi and ice gola were
available on trikes outside schools but now during summers we only hear the trikes playing
advertisement jingles of Omore and Walls. Thus, consumers awareness has improved over the
years. Even the rural class now has ice-cream instead of sweetened curd. The SEC A and B now
enjoys availability of international brands like Baskin Robbins. Moreover, people have become
more health conscious and quality is a major determinant in buying any food product. Due to
this, people prefer ice-cream made from pure milk and yogurt. Previously, ice-cream was only
eaten in summers when the weather is hot, but due to increased advertisement people eat icecream in the winters as well, which has resulted in increased sales of ice-cream.
Retailing in Pakistan is mainly confined to kiryana stores, which are run by smaller, less
educated entrepreneurs. The kiryana store is very small in size and carries very limited product
lines/brands. It is usually located in densely populated urban areas. Each locality may have a
number of kiryana stores. There is usually enough space for only one freezer. Thus with the
advent of increasing per capita income, consumerism and rampant advertisement the tastes and
exposure of people has evolved towards ice-cream.
Another social trend is the increased involvement and say of the children in the whole buying
process, which is because of the fact that marketers are increasingly focusing advertisements to
children and youngsters. As ice-cream on the sticks is an impulse article, the companies are now
targeting youngsters in their TV commercials. Thus children now go for ice-creams which are
readily available around the corner. Long gone are the days when mothers use to make jellies for
their children. Thus the tastes have drastically evolved. The major chunk of revenues of Walls

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HICO

and Omore comes from impulse articles (ice-cream available on sticks) and this can also be
linked to the fact that more than 50% of the population in Pakistan is comprised of youth.
The tastes are also affected by our culture as people here in Pakistan enjoy creamy and thick icecream. Thats evident from the fact that most elder people prefer kulfi flavor as opposed to other
new flavors. But the youngsters as they are more exposed to the advertisements and the changing
environment prefer newer flavors like oreo and blue berry.

Technological Factors
Technological advancement is very rapid in the current world. Technology plays an important
role in any economy as it helps to compete within an industry and even with other industries in
the economy. The technological factors include the rates of obsolescence, that is, the speed with
which new technological discoveries supersede established technologies. It also includes new
inventions as it might result in entering in new markets and in new businesses around the globe.
There has not been much technological advancement in the ice-cream industry except for the
increased manufacturing capacity of the companies. However, a major technological change is
the introduction of the eutectic freezers which are placed in the stores. Due to increased load
shedding, ice-cream industry had to bring in new freezer which could keep the ice-cream cold
even in the absence of electricity for up to many hours. The same technology is adopted in the
ice-cream trucks to transport ice-cream. The walls of the freezers and trucks have eutectic fluid
in them, which can maintain temperature for long durations of energy outages. Thus, it prevents
the spoilage of ice-cream. (Arifeen, Frozen Food Products Marketing and Distribution
Challenges in Developing Countries Case Study: Pakistan, 2012)

Legal Factors
Pakistan is a country where law enforcement and legal bodies are not working properly due to
economic instability, political issues and weak regulatory authorities. In such an environment
companies tend to take advantage of manipulating their products due to lack of legal bindings
since there is no check and balance and nor do the companys focus on consumer rights.
Inefficient and ineffective judicial framework also affects sales of various companies. Though

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HICO

the legal environment has improved but the fact that the economy is being run by corrupt leaders,
the fear still remains there.
However, there are a few regulations on the ice-cream industry, which include the Food Hygiene
Regulation of 2006, Ice-cream Heat Treatment Law, etc. According to the Ice-cream Heat
Treatment regulation 1959 and Dairy Products Regulation of 1995, all the ice-cream sold in the
country must be subjected to heat treatment. (Agri Hunt)
Moreover, company registrations and listings also have an impact on the sales of local producers
like HICO ice-cream.

Environment Factors
With an increase in load shedding, reliance on private generators has increased for electricity
generation, which has not only led to an increase in cost for the companies but also as a source of
damage to the environment in terms of a high carbon foot print.

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HICO

POLITICAL FACTORS
Energy Outages
General Sales Tax

ECONOMIC FACTORS
Inflation
Decreasing Disposable Factors

SOCIAL FACTORS
Quality and Health Consciousness
Increased trend of Dining Out
Increased Involvement of childrens and teenagers in buying process

TECHNOLOGICAL FACTORS
Eutectic Technology
Use of Eutectic Liquid in the walls of freezers and trucks

LEGAL FACTORS
Food Hygiene Regulation 2006
Ice Cream Heat Treatment 1956

ENVIRONMENTAL FACTORS
Increased Pollution due to High Carbon Emission from alternate sources of energy

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HICO

SWOT ANALYSIS
SWOT Analysis is a useful technique which is used to understand both the external as well as the
internal factors that impact an organization. The internal factors that affect an organization
include the strengths and weaknesses of the organization, whereas the external factors include
the opportunities and threats presented by the external environment of an organization.

Strengths
HICO has been in the ice-cream industry for a long period of time and it has enabled it to have
certain advantages over its competitors. Some of the strengths of HICO are as follows:
1. HICO is one of the oldest national companies operating in Pakistan that provides pure
dairy ice-cream made of milk and butter as compared to their major competitors such as
Walls and Omore, which use vegetable oil in their frozen dessert products. This gives
HICO an edge over its competitors and also support for their consumer base by providing
a quality product.
2. HICO exhibits highest brand loyalty. The companys research proves the fact that if a
consumer buys and consumes HICO ice-cream then he wont buy and consume any other
ice-cream. Consumers will definitely recommend HICO ice-cream to others. With such
high brand loyalty HICO can easily increase prices with the confidence that consumers
wont switch to other brands.
3. HICO generates almost 70% of its revenues from its TAKE HOME articles and is a
market leader in this particular category.
4. HICO continues to follow its heritage of delivering customer value. They continue to
supply their stock keeping units to huge buyers such as Avari, Gym Khana, Heera 36,
Freddies Caf, etc. This has resulted in a loyal customer base.
5. HICO also caters the untapped market segment of consumers who are suffering from
diabetes and obesity. It is the only producer in the industry which produces diet products,
which is also strength of the company as they are serving a segment of the market that is
not yet served by any of its competitor.
6. Another key strength of HICO is its unique flavors that it offers now. Although most of
the flavors are now in markets with other competitors like Praline by Gourment
Chocolate Chip by Walls and Omore but still there are few flavors that are specifically
part of HICO like Chocolate Fudge, Blueberry etc. It shows the broad flavor range that

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HICO

HICO provides to its consumers as its strength. It also uses co-branding strategy with
OREO.
7. They totally rely on their internal growth in order to generate profits which basically
provide the firm with a footing in the market and holding a market share. This is
primarily achieved through unique value added products to their customers. Customer
loyalty is also achieved through slow growth and market penetration thus satisfying their
customers through their taste, flavors and other features like quality and value added
products.
8. HICO generates high profitability per freezer as compared to Walls and Omore mainly
because it concentrates on TAKE HOME articles as opposed to Walls and Omore,
which concentrate on generating almost 80% of their revenue from IMPULSE articles.
9. The milk that is used to manufacture ice-cream is obtained from their own farms which
helps to keep costs to a minimum. Moreover, there are no intermediaries involved in the
distribution channel which also keeps an advantage of cost cutting. (Ahmed, 2014)

Weaknesses
Despite being a part of the frozen-food industry for a long time, HICO still needs improvement
in certain areas. Some weaknesses which HICO needs to overcome are as follows:
1. The primary weakness of the brand is low growth from IMPULSE articles that require
mass marketing. The market is already occupied by Walls and Omore for this particular
category. HICO only generates approximately 5% of its revenues from IMPULSE articles
as opposed to Walls and Omore which generate almost 80% of their revenues from this
particular category.
2. HICO only sets aside approximately 3-4% of its budget for marketing expenses as
opposed to Walls which assign almost 20% of its budget for marketing.
3. Another weakness that HICO encounters is their weak marketing strategy. The poor
marketing campaign results in poor positioning of the brands image among respective
consumers especially the youth who frequently view advertisements of Walls and Omore
as compared to HICO whose advertisements only run on City42. Thus, the brand equity
associated with the brand image is very low as compared to the other competitors like
Walls and Omore who have developed a well working marketing strategy as compared to
HICO. Walls being an international brand use proper research techniques, R&D,

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HICO

distribution channels and experience, etc. to conduct research which is not possible for
HICO and thus has failed to apply R&D techniques and research processes to test the
market.
4. Their market mainly consists of major cities of Pakistan such as Lahore, Islamabad and
Karachi with limited availability and visibility. HICO is characterized with low market
share and market visibility. This further has an impact on sales because the market in the
major cities is already occupied by giants.
5. The distribution network of HICO is not well established. Most of the time, the retailers
are out of stock and the trikes presented are not attractive enough as compared to that of
Walls with presentable trikes.
6. The distribution network of HICO is not well established. Most of the time, the retailers
are out of stock and the trikes presented are not attractive enough as compared to that of
Walls with presentable trolleys.
7. As HICO focuses on internal growth and makes their own profits, they dont depend on
public financing as Walls does heavily. Due to this, they have shortage of capital.
8. In addition to that, the product packaging is not attractive enough to gain customer
attention.
9. Another weakness resulting in their low market share and sales is that they dont provide
any incentives to the retailers. Walls has provided its retailers with deep freezers in order
to incentivize on the market which also has a hand in increasing its market share.
(Ahmed, 2014)

Opportunities
The frozen-food industry despite facing a number of challenges can take benefit from
opportunities available to it and has an enormous potential to grow. HICO Company also being
part of the industry has a number of opportunities to take benefit from. Some of the opportunities
available to HICO are:
1. HICO generates most of its revenues from take home category and the revenue from its
impulse items is negligible as compared to Omore and Walls. So, HICO has an
opportunity to tap this segment of the market that buys impulse category items.
Since HICO has a loyal customer base that are purchasing its take home category in large
quantities, so if HICO properly advertises, positions and markets its impulse category
items it can also increase its revenues from this particular category.

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HICO

2. HICO can also use different shapes for its impulse items to entice consumers especially
children to buy its product which will ultimately contribute positively to sales.
3. Generation gap is also an opportunity for HICO. Since younger generation is not aware
of HICO it can create a strong brand positioning as well as loyalty by increasing its focus
on production of impulse items and use of trikes which is been aggressively used by its
competitors.
4. HICO ice-cream is purely a dairy product and it has its own dairy farms, because of
which there is no compromise in terms of quality. So HICO can also increase its sales by
creating awareness among people by letting them know about their quality and pureness
through advertisement and marketing.
5. Similarly, HICO can create awareness among health conscious people and ensure them
that its products are purely dairy based and do not make use of vegetable oil as being
done by its competitors such as Walls and Omore. Making people health conscious will
eventually increase the sales of the company as its products are purely dairy based.
6. Moreover, HICO is the only ice-cream manufacturer in Pakistan that makes diet icecream for weight conscious and people with diabetes; it should market it properly to
increase sales of diet ice-creams also.
7. Since, the trend of eating out ice-cream in ice-cream parlors is increasing, HICO can take
advantage of this opportunity by making by its own ice-cream parlors starting with the
major metropolitan cities of Pakistan and later it can expand to other cities as well.
(Ahmed, 2014)

Threats
Although Happy Ice-Cream Company produces products that are of exceptional quality and are
of multi-national level, but due to its presence in limited number of cities HICO faces severe
competition from companies like Walls, Omore etc. Because of these giants as well as external
factors HICO faces a number of threats which are discussed below:
1. The biggest threat faced by HICO as well as by other frozen-food industry companies is
of load shedding. Uninterrupted power supply is required for continuous production
process and because of this companies now have to use generators to supply electricity to
their cold storage units which increases their per unit cost by about 150%. Electricity

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HICO

shortage also results in reduced volumes. HICO, being a smaller company as compared to
Omore and Walls is more affected by the electricity issue.
In addition to this, the electricity problem has also resulted in increased returns of spoiled
ice-creams from the retailers, which also increases the cost being faced by the company.
Likewise, house-hold consumers have started to buy in smaller quantities due to spoilage
of ice-cream as a result of load-shedding. This reduction in buying is more of a problem
for HICO than others. The reason being, HICO generates almost 80% of its revenues
from its TAKE HOME CATEGORY, (which includes 900ml brick and special packs).
HICO Companys revenue from impulse category is only 5% as compared to 70% of
Walls and Omore. Thus the impact of reduction in buying quantity of house-holds is more
for HICO as compared to others. Hence this external factor is hurting the companies
operating in frozen food industry to a very large extent.
2. Generation gap is also a threat faced by HICO. The younger generation is not really
aware of the products of the company because of the companys little focus on impulse
items. Moreover, competitors are directly targeting youth and children in advertisements
these days.
3. HICO being a local company and competing with big industry giants also faces the threat
of price competition. Although currently HICO products prices are lower than the
industry leader (Walls), but if circumstances change and Walls feels the need to compete
with HICO it can easily lower its prices as compared to HICO because of the economies
of scale. HICO is a smaller company as compared to Walls and Omore and it might not
be possible for HICO to compete on the basis of price.
4. Likewise, because of the larger funds available to other companies as compared to HICO
they can work heavily on research and development and can come up with improved
technology as well as flavors that can hurt others in the industry. Moreover, they can
spend heavily on their marketing activities as well.
5. Terrorism is another factor that is affecting almost every business industry of Pakistan.
People are afraid to go to crowded places and they prefer to remain in their houses which
eventually reduce the sales of the companies.
6. The economic conditions of Pakistan are also dreadful on businesses in Pakistan. The
purchasing power of people has reduced which ultimately affects the businesses. HICO
also has a tendency to be affected by this threat. As most of its revenues are from take
home category which is expensive as compared to other categories for a consumer,

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HICO

therefore people because of their reduced ability to buy may purchase less and eventually
the sales of the company may suffer. With the inflation rate of Pakistan in double digits, it
is inevitable for HICO to increase the price of products to meet its costs. (Ahmed, 2014)

PORTERS GENERIC STRATEGIES

Porter has suggested three generic strategies for creating a defendable position in the long-run
and outstripping competitors.

Overall cost leadership

Differentiation
Focus

Out of these three strategies, HICO only adopts Differentiation Strategy.

Differentiation
It explains the concentration of the business on achieving greater performance in an important
customer benefit area valued by a large part of the market. It means creating your products or
services different from those of competitors or making it more attractive to the customer base.
This strategy is highly dependent on various factors, like industry, market, customer base, and
the nature of the actual products or services. Whatever factor it is, it should have something that
makes the products or services prominent.
HICO differentiates itself by providing superior quality pure dairy products. HICO has always
been seeking for quality leadership to differentiate itself from its competitors. Good quality and
pure dairy products have always been the core competency of HICO since its inception. They
differentiate themselves by manufacturing 100% pure dairy ice-cream to provide its customers
with the best tasting ice-cream in the country.
Differentiation is a secure strategy for HICO in earning above average returns because it protects
it from competition by creating brand loyalty. By making customers less sensitive to price
changes, it lowers the price elasticity of demand in its products. The quality and purity factor of
HICO makes them play safe in the industry with a word ice-cream attached to them. As
mentioned by their Brand Manager, We dont compromise on quality, gives the company an

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HICO

edge over its competitors because consumers who rate quality very high would not switch to
other brands and would continue to consume HICO (hard core loyals). This results in high profit
margins and thus HICO still manages a stable sales volume without having to spend on
marketing. MNCs usually have a fixed budget of around 14-15% kept aside for their marketing
efforts. HICO only spends 3-4% on marketing efforts as compared to Walls which spends around
20%.
This strategy also diminishes bargaining power of buyers since now they have fewer substitutes
available of pure dairy products. With a differentiation strategy, HICO can command a premium
price for its products. Based on customer loyalty it can increase unit sales.
In adopting such a strategy, the perceived risk is higher than others that the product might not be
valued up to the expected level because for the product to be valued proper market awareness
strategies need to be undertaken. This will help creating brand image in the consumers mind and
allow them to take a chance. The greatest risk for HICO in pursuing a Differentiation Strategy is
the risk of attack by its competitors following Focus Differentiation strategies in different market
segments. To alleviate this risk, HICO needs to have an active product development process
where constant innovation will help in keeping specialized players at bay and thus will help in
achieving higher growth targets and profit margins.

Product Life Cycle

Product life cycle is an analysis that tries to classify a set of common stages in the life of
commercial products. Product life cycle commonly known as PLC is used to plot the lifetime of
the product through which a product goes during its lifespan. The product life cycle is an
important concept in marketing which explains about the stages a product goes through from its
inception till its complete removal from the market. The final stage is not seen by all the products
because some products have a potential to grow and others rise and fall (Kotler, Marketing
Management, 2014). The main stages of the product life cycle are:

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HICO

Introduction
Growth
Maturity
Decline

HICO is at a maturity stage in its life cycle in which it has a slowdown in sales growth because
its products have achieved acceptance by most potential buyers (Kotler, Marketing Management,
2014). At this stage of its life cycle, the profits for HICO have stabilized due to tough
competition by big brands in the market, Walls and Omore.

HICO is at its maturity stage and

at this stage it is introducing a
new premium line, HICO
Indulgence.

Moreover HICO should focus on scalloped PLC pattern in which it should manage to make its
sales pass through succession of life cycles based on the discovery of new-product flavors, uses
or users (Kotler, Marketing Management, 2014). Introduction of the new premium line by HICO
will give it a push in the growth in sales phase.

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HICO

Market Research
In order to analyze the customers demands and their purchasing behavior market research is an
important technique which is further assisted by several tools. It helps to examine consumer
preferences in the market their needs and gives insight for different features of brands they value
for.
We approached questionnaire tool for our research in which we extracted basic information
regarding consumer buying behavior, their taste preferences and some other features for HICO
and its competitors. The study was held in Lahore School of Economics with a sample size of 50
respondents for their response about the brand. The results are shown in Appendix I.
Out of the total respondents, 94% like ice-cream and only 6% do not like ice-cream.
Ice-cream is a product that people do consume often but its more of once a week purchase
(44%) followed by once a month (34%) and 3-4 times a week (20%). This basically shows
consumption frequency of the ice-cream and frozen desert industry by different respondent.
54% of the respondents purchase from convenience stores. Whatever brand is available is
available at these particular convenience stores; they prefer buying that along with other
convenience goods. They mainly focus on impulse articles (68%) which is mainly being catered
by Walls and Omore. 32% respondents purchase family packs. HICO is the market leader in this
particular category of take home articles and caters to this 32% of the respondents.
86% of the respondents had tried HICO and 17% had an excellent perception about HICO,
followed by 65% who had a very good and good perception about the brand.
When asked what is the first brand that comes to their mind when they think of ice-cream, 56%
responded Walls followed by 34% of HICO. Moreover 66% of respondents buy Walls, 24% buy
HICO, 8% buy Omore and 2% buy Gourmet. This is because of quality (60%) followed by
flavors (25%) and purchasing convenience (9%). Respondents showed 0% response to price
feature while making a purchase. This is mainly because of strong brand image of Walls which
has it has been able to achieve through diverse marketing strategies. Walls never fails to deliver
its quality and because of which 88% of weight was given to very satisfied and satisfied.

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HICO

Consumer preferences and tastes have changed over the years. With new international brands
competing with existing brands, there are a lot of choices available to consumers from which
they can choose. Walls has been able to respond to this and has come up with new flavors to
cater to changing tastes and preferences. That is why 92% weight was given to very satisfied and
satisfied from their product range. 66% weight was given to very satisfied and satisfied from
their customer service and 98% were satisfied and very satisfied from its purchase convenience.
Walls is almost available at every convenience store, grocery store and super markets, etc. This is
attributed to their wide distribution channel. Moreover Walls has also recently started its home
delivery service in Karachi and Lahore. They promise to deliver at your door step within one
hour. This has further enhanced its purchasing convenience.
Respondents gave a weight of 78% to very satisfied and satisfied from HICOs product range. As
compared to Walls, HICO has a limited number of flavors to which it has confined itself from the
very beginning. It continues to deliver the same flavors. Satisfied and very satisfied respondents
gave a weight of 80% to quality. This is mainly for those consumers who value pure dairy icecream and are fully aware of the fact that HICO provides pure dairy ice-cream as compared to its
competitors. As compared to Walls, HICO was given a weight of 60% in terms of purchase
convenience. HICO is not readily available at all convenience stores. They tend to focus more on
take home articles as compared to Walls which derives almost 80% of its revenues from impulse
articles which are readily available. HICO being the market leader for the take home category
(derives 70% of its revenues from this category) still fails cater to availability.
Out of the respondents who purchase HICO, buy it because of their unique flavors (54%)
followed by quality (38%) and price (8%). Respondents showed 0% response to purchasing
convenience. People who purchase Omore mainly do it because of price (50%) followed by
quality and flavors (25% each). Finally people who buy Gourmet ice-cream mainly do so
because of purchasing convenience.

Segmentation
Market Segmentation is the process of breaking down all consumers into groups of potential
buyers with similar characteristics. (Tanner). It is necessary for a firm or company to perform

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HICO

market segmentation so as to attract the right customer for ones product or service and to
increase marketing efficiency by directing all of ones efforts towards the right people.
Market segmentation is done usually on the basis of the following (Kotler, Marketing
Management: A South Asian Perspective, 2014):
1. Geographic segmentation
2. Demographic segmentation
3. Psychographic segmentation
4. Behavioral segmentation
Lets first take a look at how the company acts in the each of the above segmentation criteria

Geographic Segmentation
The company originally catered to only to the residents of Lahore, but after 1997, they started
catering to the residents of other cities as well such as Karachi, Faisalabad, Rawalpindi,
Peshawar etc., but their main focus has been Punjab, probably due to the fact that their factory
resides in Lahore and it decreases freight and transportation costs
But as compared to Walls and Omore, HICO is not readily available everywhere. Even in the big
cities like Lahore, Karachi and Islamabad, HICO is most usually found in some large
departmental stores and super markets only, but even they do not seem to contain all the variety
of ice creams HICO has to offer, as you only usually find the take home category type with them.
The reason for this lack of growth is that the company focuses more on an internal growth
strategy and doesnt depend heavily on public financing unlike Walls for example and the
company also does not provide any incentives to retailers.

Demographic Segmentation
Unlike walls and Omore who target demographic variables such as age and income, HICOs
main focus seems to be more income based as bulk of its revenue (80%) comes from the sale of
its take home category (which includes the 900 ml bricks and special packs), though HICO has
applied a multi-channel strategy by offering other ice cream varieties such as lollies, cones, and

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HICO

cups etc., the above figure of 80% shows how much potential the company has if it starts to
focus on other demographic variable such as age as seen done by walls (its paddle pop category
for kids and the cornetto and magnum line for teenagers and adults).
Although the price tag of HICOs products is lower than of the competition for its take home
category type, not everybody can afford the take home category of ice creams, so HICO seems to
be focusing itself on the SEC A and SEC B. (not only due to restrictions in income but also due
the erratic electrical blackouts.)
In terms of generation, the company seems to be facing a generation gap, as although it claims to
be a company which is established since 1958, the younger generation does not seem to be that
much aware of the brand, the reason being the lack of a proper marketing and advertisement
strategy for its products as compared to the giants such as Walls.

Psychographic Segmentation
Psychographics is the science of using psychology and demographics to better understand
consumers (Kotler, Marketing Management: A South Asian Perspective, 2014). HICOs focus is
also on the consumers who seek variety and want a different experience than the norm, which the
consumers get as not only does HICO offer more variety of flavors than the major competition
(Walls and Omore), the company also gives the image of health and quality to its consumers as
its made of pure milk fat and can actually be called a dairy ice cream while the products of Walls
and Omore are actually referred to as frozen desserts.
HICO not only targets those who seek variety, but their main differentiating factor seems to be
the focus on value that they create for their customers. HICO believes in creating products that
not only conform to the quality that they promise but also provides value to their customers in
shape of a product that is by its true name an ice cream, made from butter (milk fat), and is not
an adulterated version made by using vegetable oils as seen done by other brands in the market.
Thus HICOs ice cream tends to be denser and creamier in nature than its counterparts in the
market. This provision of value has made HICO a loyal supplier of huge buyers like Avari, Gym
Khana, Heera 36, Freddies caf etc.

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HICO

Behavioral Segmentation
This segmentation divides the buyers into groups on the basis of their knowledge of, attitude
toward, use of, or response to a product. (Kotler, Marketing Management: A South Asian
Perspective, 2014)
The company states on its packaging made with pure milk and fresh cream, so it offers the
benefit of being pure and good for the health, as assumed by buyers. The company also offers the
benefit of being one of the few diet ice creams available in the market, which is added bonus for
buyers who seek this product either for diabetics or for health conscious reasons. (so also
catering to market niche)
As bulk of the companys revenues comes from sale of the take home category, the consumers
seem to be buying them for the sake of bulk consumption such as regular occasions, parties,
weddings etc.
All of the above variables point towards how HICO can leverage on its present establishment to
launch a premium line of ice creams.
For its re-launch the company will have to be specific in terms of its market segments that will
meet its core competencies and resources,
According to Kotler (Kotler, Marketing Management- A South Asian Perspective, 2014) and
Keller, there are many levels of market segmentation
1.
2.
3.
4.
5.

Mass marketing
Segment marketing
Niche marketing
Local marketing
Individual marketing

The process of Market Segmentation involves the following steps (Kotler, Marketing
Management- A South Asian Perspective, 2014)
1. Choose the market
2. Apply the segmentation variables
3. Evaluate segments for targeting

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HICO

HICO will be following the above steps for the launch of its premium line.
1. Geographic segmentation
For its re-launch, HICO now needs to focus more on the urban cities of Punjab, in cities like
Lahore, Islamabad, Multan, Faisalabad etc. where there is a huge potential for growth as
these cities are not only near Lahore as long as logistics is concerned but also help in keeping
transportation costs low. These cities also show the economic development level and
population density necessary for a proper market segment.
2. Demographic Segmentation
To cater to a broader audience, HICO needs to segment its market, firstly into the young, hip
and trendy young adults and secondly into the adults
The targeted age group of HICOs premium range can be the 15-45 year old as most of
HICOs sales are from the take home category type which it can leverage on.
In terms of gender, HICO does not seem to position itself to anybody specific but whos
stopping it from doing so, why not cater to the women who want to try and have a premium
product but dont want to break the bank in the process, why limit the competitors to only
Walls and Omore, when it can also challenge the likes of Ben and Jerrys and Hagen-Dazsin
providing a premium experience.
As mentioned before, the company seems to face a problem of a generation gap, but this
problem is an opportunity in itself as history has shown that brands that disappear from the
minds of people are more likely to come back with a bang. The company writes on its
packaging, since 1958, giving a sense of nostalgia and taking pride in its roots at the same
time, but for todays generations this very same thing means something outdated and old and
this very same correlation leads them to believe in their minds that how can something so old
be innovative and come up with something new.
3. Socio cultural segmentation

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HICO

The company seems to be catering both the traditional and new western flavor lovers of ice
creams with flavors like kulfa, mango, praline etc. It needs to learn from the strategy of the
likes of McDonalds, Pizza Hut and Walls that bringing local flavors and preferences into
your product offering always boosts sales and always catches the taste buds of the locals,
For e.g. Pizza Hut with their chicken tikka flavor and Walls with their BadamiKulfiflavor.
Pakistanis seem to like rich and creamy flavors, and an experiment Wallss seems to be
doing with in its Carte Dor line with flavors like SohanHalwa and GajarHalwa flavors.
We Pakistan, as were a part of the subcontinent with India once, share a lot of preferences in
terms of flavors, making it easier for marketers to copy and paste successful products in India
into Pakistan, like Kurkure.
4. Psychographic Segmentation
The company needs to build a brand following, for which it needs to target the fashion savvy,
the people who are the trend setters and who others want to imitate. Secondly it will also
need to make the so called health seekers aware of the benefits of consuming HICO products
made from pure milk and cream
5. Behavioral segmentation
The company needs to make its products fall into the category of impulse items, it needs
people to just pick their product the moment they see it or the moment they are near it or
when they enter a store.
In terms of decision roles as compared to walls, for the paddle pop line kids play a significant
role and for the Cornetto line it is the teenagers and the adults. HICO is not really catering to
the needs of the kids, with its premium line it will be catering to the teens and adults.
As 80% of HICOs sales are from the take home category type, the product sales seem to be
more related to occasions, so HICO can also relate itself to occasions in the minds of its
customers just as Cadbury has done with its Cadbury Celebrations line in India, and Nestle
with its orange juice, why just let it be a breakfast drink when it can be consumed at so many
other occasions. Make the premium ice creams be part of ones special occasions

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HICO

To increase its sales in the winter, Walls coined the phrase thandhai to kyahua for its
advertisement to increase its usage rate in a season when ice cream sales are really low.
HICO can leverage on such marketing efforts so as to increase its own sales.

Defining the target market segment

1.
2.
3.
4.

Both adults and teenagers from age 15-45

Both genders, but women n particular.
People who seek variety, quality and something out of the norm
People of SEC A and B living in the urban cities, Karachi, Lahore Islamabad, Faisalabad,

etc.
5. People who desire a pure product free from adulteration, i.e. health seekers (mothers
could be targeted here as they are more worried and conscious of both their and the
familys health)
HICO could also target their product into the following niches (Kotler, Marketing ManagementA South Asian Perspective, 2014)
1. Image seekers, people who seek luxury, and who are more aware of their looks and
imageand want to show to the world as if they belong to a higher social class, an e.g.
from Walls page book includes its Magnum line.
2. Health seekers, people who are very health conscious and seek low calorie or pure
ingredients, e.g. include diet ice cream, a niche category HICO needs to take advantage
of by expanding its line of flavors in the category as they only produce one flavor for
now (vanilla)
3. Pleasure Seekers, people who seek only high quality products to satisfy their need for an
illustrious, refined and distinguished experience

Level of Segmentation
For its premium line HICO will have to focus on the single segment concentration in which it
will be targeting a niche market for people willing to pay a premium for a more superior
experience of flavors, quality and self-satisfaction..

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HICO

Positioning of HICO
Positioning is a very important element in marketing. The positioning strategy that a firm adopts
should be flexible and forward looking to allow the firm to achieve its potential in the future.
The sales of HICO are somewhat stagnant, therefore HICO should reposition itself. The
positioning strategy of HICO should be customer focused, which should prompt the customers to
buy HICO. Therefore, in defining a new positioning strategy, the following steps were taken:

1. Determining a Competitive Frame of Reference

In brand positioning, one of most vital tasks is the determination of the competitive frame of
reference. It involves identifying the competitors of a firm. The competitive frame of reference
does not necessarily include the firms or brands that offer similar products, but also those that
offer dissimilar products but satisfy the same needs. For defining the competitive frame of
reference for HICO, the competitors were first identified and then analyzed to determine their
strengths and weaknesses.
Identifying Competitors
In case of HICO, the major competitors include Walls, Omore, Igloo etc. Apart from that there
are many ice cream parlors which compete directly with HICO. They not only provide ice
creams, but also an ambience and experience in which people can enjoy.
Moreover, based on the product category the major competitors of HICO are Gourmet and Butt
Bakers. These bakeries make family packs and compete directly with HICO, which drives 70%
of its sales from family packs and take home category. Moreover, Gourmet has the advantage of
being available almost everywhere.
Analyzing Competitors
Based on our market research, the strongest competitor of HICO is Walls, as 66% of our
respondents buy Walls, and Walls is the brand that comes to 56% of the peoples mind when they
hear the term Ice Cream. Also, quality is one of the most important features attributable to the
huge sales of Walls; therefore quality can be regarded as the major strength of Walls. For Omore,
price is one of major factor behind the purchase. Similarly, for Gourmet, all the respondents

MARKETING PLAN

HICO

agreed that purchase convenience is the major reason. However, a major weakness of Gourmet is
its quality, as people do not buy it because of its quality or flavors.
Therefore, based on the analysis of the competitors of HICO, the competitive frame of reference
of HICO should include Walls and Omore.

2. Identifying Optimal Points-of-Difference and Points-of-Parity

After defining the competitive frame of reference for HICO, the next step is to define the optimal
points-of-difference and points-of-parity for HICO.
Points-of-Difference
One of the most distinguishing features of HICO is that it makes dairy ice creams. HICO owns
its own dairy farms that supply it with fresh milk. As compared to HICO, its competitors Walls
and Omore make frozen dessert. So, the major point-of-difference for HICO is its dairy ice
cream. Because, the products of HICO are made from pure milk, its quality is an important factor
contributing to its purchase. According to our market research, 38% of the people purchase
HICO because of its superior quality.
Moreover, another feature of HICO that can be classified as a point-of-difference is the flavors
offered by HICO. HICO is famous for the introduction of Praline flavor in Pakistan; it is because
of this reason that 54% of our respondents purchase HICO because of its flavor. Praline flavor is
not currently offered by any of the other competitors like Walls and Omore, therefore the praline
lovers only purchase HICO ice cream.
Apart from that, HICO provides diet ice cream to the health conscious and diabetes patients,
which is not offered by any of the other competitor. Therefore, it is also an important factor that
differentiates HICO from its competitors.
Points-of-Parity
Walls and Omore dont offer dairy ice creams, but their product quality is also good. So, good
quality is a point-of-parity that HICO shares with its competitors. Based on our research, a large
number of respondents select Walls and Omore because of its quality. Apart from that HICO
offers many flavors like Chocolate Chip, Mango, Vanilla, Strawberry etc. which are offered by

MARKETING PLAN

HICO

its competitors as well. Good quality and availability of ice creams in various flavors are the
category point of parity for HICO. Also all the competitors of HICO and HICO target the upper
class and the middle class, therefore, the prices charged by all these ice cream manufacturers are
quite high.

Brand Mantras
A brand mantra is a three to five words explanation which encapsulates the essence of the brand
positioning and the brand value. A good brand mantra should reflect the companys competitive
frame of reference, points-of-parity, and point-of-difference in just a few words. (Grams, 2011)
The brand mantra of HICO should also be indicative of its points-of-difference and points-ofparity. The brand mantra of HICO should be such that there is a perfect alignment between
culture and the brand HICO. The brand mantra of HICO should be as follows:
Providing pure, premium dairy ice-cream to pleasure seekers
This brand mantra of HICO indicates HICOs focus on maintaining consistency, which shows
HICOs emphasis on maintaining the quality and intolerance to anything that is not of the best
quality. Moreover, it also highlights HICOs point-of-difference of being high quality as HICO is
famous for its excellent quality. Also, HICOs point of difference of being amongst the few dairy
ice cream manufacturers i.e. ice cream made from pure milk from its dairy farms is also stressed
upon in this brand mantra of HICO. The overall brand mantra of HICO emphasizes HICOs
focus on producing high quality ice cream every time and anything which is not the best is not
acceptable at HICO.

Positioning
In order to communicate this positioning strategy to its customers, HICO would need to maintain
its high quality, hire and train employees to perform better services as compared to its
competitors and develop superior marketing strategies and messages to communicate the image
to its customers. It can do so by concentrating on three aspects:

Premium and affordability

Pure pleasure
Healthy lifestyle

MARKETING PLAN

HICO

The result of positioning is the successful creation of a customer-focused value proposition, a

cogent why the target market should buy the product (Kotler, 2014). The value proposition is as
follows:
Brand, Company &

Target Customers

Benefits

Value Proposition

Product
HICO Indulgence

Pleasure seekers;

Superior quality and

Pure premium dairy

quality and health

unique flavors

ice-cream

conscious consumers
HICO- Premium quality taste at an affordable price
Consumer preferences and needs have evolved over time in the Pakistani market and theyre
constantly looking out for exclusive and sophisticated options to try out. In such an
environment, HICO can aim at building the most appealing image by providing premium quality
dairy ice-cream to attract its target market that are looking out for quality goods as a means to
demonstrate their socio economic class. With an increase in purchasing power of the SEC A and
SEC B, it would be a perfect time for HICO to place itself in the minds of the consumers and
gain appreciation in terms of purity and self-satisfaction.
HICO should not concentrate on sales volumes and profits (price) at the moment and should
concentrate on building a strong and stable image. The ice-cream industry is characterized by an
impulse nature. Consumers dont make planned purchases of ice-cream items rather when they
enter convenience stores, grocery stores, super markets, etc a decent number of impulse icecream purchases take place. By communicating an image of premium quality ice-cream provider,
consumers should not perceive it as being snobby or inaccessible. For this reason HICO should
cater to premium quality and affordability simultaneously.
HICO- A unique experience leading to pure pleasure
HICO should aim at catering to pleasure seeking individuals, who are generally brand conscious.
HICO needs to communicate its dedication towards delivering high quality and standards. It
needs to emphasize its uniqueness as the sole provider of pure dairy ice cream product and the
blissful ice cream eating experience the pure indulgence that melts customers heart that they
cannot find in any other brand. In order to communicate this message to its target market, it

MARKETING PLAN

HICO

needs to reinforce its differentiation strategy along with commitment to deliver consistent quality
at all times.
HICO- A healthy choice for a healthy lifestyle
HICO should effectively cater health conscious young adults who are interested in desserts but
prefer natural ingredients or low fat substitutes. They should carve in the consumers mind that
HICO is the only pure dairy ice-cream provider as compared to its competitors and is free of
vegetable oil that is used to manufacture frozen desserts. In this way they would be able to
convince consumers that their product does not pose a threat to their lives.
Diet line products by HICO are the real healthy side of ice cream. By introducing such a
product line to customers, it directly caters to health seekers who are highly concerned about
their health but still want to enjoy rich and sweet desserts. It should introduce a wider product
range for such a market niche.
Lastly, HICO can promote its brand image of providing healthy products is through a calorie
display showing and explaining the actual number of calories in every scoop. This way it can
reflect that it is deeply concerned about consumers well being and fitness.
With the help of these three aspects, HICO can translate its brand mantra of Providing pure,
premium dairy ice-cream to pleasure seekers into reality.

Establishing the Brand Positioning:

The next step is to develop the brand positioning and communicating it to all the people involved
in the organization. The bulls eye for HICO is shown in the Figure 1. Figure 1 shows the brand
offerings of HICO and also shows some of the attributes of HICO that makes its a better choice
than its other competitors. To communicate the category membership, HICO should announce its
category benefits. As shown in the figure, HICO should emphasize on its superior quality and
dairy ice cream to attract the customers to consume their products.
Moreover, as HICO mainly focuses on the production on family packs which are bought mostly
by the elder people in the family; it is not perceived as a brand for the younger generation. HICO
needs to change this perception by positioning it as a brand for the youngsters too. For this

MARKETING PLAN

HICO

purpose, it should increase the production of the impulse articles and it also needs to
communicate it through its advertisement and designing the packaging of the impulse articles
with vibrant and lively colors.

Figure 1: Bull's
Eye PositioningPLAN
for HICO
MARKETING

HICO

Consumer Target
Quality Conscious
Ice Cream
Consumers

Values/Personality/
Character

Consumer Insight

Substantiators
(RTB)

Differentiation Strategies

Lack of Good
Quality ice creams
available for health
conscious people

Nurturing

Points-of-Parity
HICO
Own
Dairy
Farms to
Ensure Good
Quality of
Milk

Walls

Affordable
price
Brand Mantra

Low Need
Consumer
State

Omore
e
Providing pure,

Good
Quality

premium dairy
ice-cream to
Pure Milk pleasure seekers
High
Unique
High Quality
Flavors

Desire for Superior

Quality Ice creams
Competitive
Product Set

Healthy and
Fit

High

Consumer
Takeaway
HICO provides
best quality dairy
ice cream, while
being healthy at
the same time.

Points-of-Difference
Red Color
of Logo

Logo
portraying it
as a Happy
Brand

Walls, Omore
Low

Executional Properties/
Visual Identity

In view of the above figure, HICO should position itself in the Pakistani market in comparison to
its competitors using the differentiation strategies.
In order to differentiate your product from that of competitors a proper differentiation strategy is
required. Since positioning is not what you do to a product; it is what you do to the mind of a
prospect. Therefore for a better positioning, a well planned differentiation strategy is required to
compete over other brands. Competitive advantage can link the differentiation strategy to the

MARKETING PLAN

HICO

positioning of a brand in the mind of their consumers. Its basically the companys ability to
perform in a better way over its competitors. Depending on the competitive advantage a
company can build their differentiation strategy in terms of product, services, channels, etc.
The main stream of ice-cream industry in Pakistan is highly concentrated by two players; Walls
being the market leader and Omore being the market follower. They provide variety of products
to their customers. On the other hand the secondary level for ice-cream industry is based on
various parlors operating that have provided consumers with a variety of flavors along with an
ambiance and dcor to dine in and enjoy their ice-cream. HICO has captured a competitive
advantage in terms of providing premium ice-cream along with a purity attribute

Product Differentiation
HICO has differentiated itself in terms of premium quality; thick and creamy taste yet delicate in
its texture. Providing customers a unique taste and flavor will enhance their competitive edge.
Moreover observing the trends they should opt for introducing new mix of flavors as the industry
is now occupied with international players which provide their customers a broad range of
flavors. Therefore HICO should come up with a new flavor mix delivering their customers a
variety of options in order to increase their customer base. HICO should continuously add on to
its premium line in order to provide premium quality dessert that can be distinguished through
their unique and exciting flavors and purity.
Ice-cream is brand that is usually categorized under impulse purchases. Walls and Omore have
targeted the impulse article category very effectively. Major portion of their revenue comes from
impulse articles. Whereas HICO has totally ignored the impulse category which if looked after,
has the potential to generate more revenues than their take home category.
Furthermore HICO should promote their USP of pure diary ice-cream through advertisement so
as to increase customer awareness. This way they can achieve a better market position that will
help them differentiate from competitors who on the contrary provide frozen dessert.

MARKETING PLAN

HICO

Consistency in Quality Differentiation

HICO delivers a pure product since its inception. Superior flavor and texture are principal to
HICO and their definition of quality extends much further. Since they signify their commitment
to quality that differentiates them from their competitors, more focus should be laid on retaining
it in the long run. Maintaining the initial quality level and further bringing in new checks to their
manufacturing process can help reflect premium value to their customers. Consumers who are
health conscious and dont compromise on quality will focus on the brands that provide them
with ultimate taste and quality. HICO can enhance its competitive edge if it works on spreading
awareness among their potential consumers and others so as to make them identify the basic
differentiating factor that they provide.

Service Differentiation
HICO should come up with providing new services like it competitors. Walls recently came up
with its home delivery service for its products. Since HICO derives its major chunk of revenues
from its take home category, it should also start delivering such services since the volume in the
take home category is sufficient to meet the delivery costs and will ultimately benefit the
company. Since there is an increasing trend in ice-cream parlors nowadays, HICO also has an
option for an ice-cream parlor that provides premium ice-cream products which are rich in taste
and flavors. It can present an opportunity for increasing their brand awareness among customers
and provide them with quality service. Delivering superior services with a classy ambiance will
make the customers feel good even if its just an ice-cream parlor.
HICO can also start opening a network of their distribution outlets which will be a unique
concept in itself and will definitely add value to their customers. Since HICO suffers lack of
availability as compared to its competitors, it will be a point of service differentiation that they
can provide. Focusing on quality and service differentiation of their brand among their
competitors can help improve market share.

Image Differentiation
The word HICO that is abbreviated for Happy Ice-Cream Company doesnt portray the
meaning and the quality they provide. The image they have created in consumer minds is just

MARKETING PLAN

HICO

that of a local ice-cream provider. Providing a pure diary product is something that they should
focus on to deliver value to their customers. In order to do this successfully, they need to enhance
the image of the company. Instead of showing some sort of cartoon character in their logo, it
should be revised with some elements that represent quality symbol along with happiness that
depicts a true meaning of pure diary ice-cream for brand conscious people. It should reflect the
premium range of HICO.

Branding Strategy
Brand strategy is the how, what, when, and to whom you plan on communicating your product or
service (Sorenson, 2012) . It is not just the logo, name or the trademark that is your brand but it
is actually what perceptions people have of you and how emotionally linked you are with them.
Branding strategy is important because you want to survive and think of the long run success in
the future. All the successful companies in the world have proper branding strategies of their
products, from the iconic golden arches of McDonalds to the instantly recognizable bright green
color of Garnier Fructus products. Its done to not only build loyalty, but also to increase market
share, get better financial results, to create trust, and to eventually survive in this world of ever
increasing competition.
HICO is in a need of a proper branding strategy to set it apart from the competition and to
survive in the future. Although HICO is operating right now at maximum capacity and selling
every unit it makes, its market share is gradually decreasing over time to the likes of Walls and
Omore, and eventually one day HICO will be driven off the face of the map of the ice cream
world. This is an inevitable truth and to avoid such a case from arising, HICO needs a proper
branding strategy.
As Kotler mentions, in branding new products, a firm has three main options (Kotler, Marketing
Management - A south asian perspective, 2014)
1. Develop new brand elements for the new products
2. Apply some of its existing brand elements
3. Use a combination of new and existing brand elements

MARKETING PLAN

HICO

For HICOs launch of its new premium line of HICO Indulgence, HICO will be going forward
with the third option by using the strategy of line extension, which is itself a category of brand
extension. This decision is taken so that not only the new launch can leverage on HICOs
previous success and image of quality but also to give HICO an overall image boost as well and
to relate it with the word premium.
But as it is well known that brand extensions can lead to brand dilutions but HICO itself faces a
threat of imminent extinction in the future. For them its either to expand or die out eventually.
For a comprehensive branding strategy it needs to have the following six components (Sorenson,
2012):
1.
2.
3.
4.
5.
6.

Tie the brand to the business model

Be consistent
Connect emotionally
Reward and cultivate
Be flexible
Watch out for competitors.a little

For HICOs branding strategy it will be consistent with its previous belief in providing quality
products at an affordable price, because this has been the very belief of HICO from the
beginning and will be consistent throughout the course of the brands life. HICO will also be
tying its brand to the word premium, although it has tried to do that in the past as well but has
failed because the positioning of the word premium in peoples minds is more related with the
price, packaging and name of the product. HICO will thus be trying to connect emotionally with
its customers by making them part of the family, the brand will have to be active on Facebook
and twitter by listening and responding to customer feedbacks and giving promotions online and
on social media sites, that is to increase customer involvement. Then use these people to your
advantage, make them increase your value by not only nurturing them but also making them feel
part of a club or group and eventually harness the advantage of word of mouth promotion.
In the end, the brand will have to be flexible and be ready to take risks, for example of a flavor
fails on the market or is not picking enough customers, be ready to change it and bring and
experiment with new flavors so that to differentiate itself from the competitors in giving variety
in not only the everyday flavors but also variety in giving a premium experience.

MARKETING PLAN

HICO

In view of the branding strategy we aim to create the following brand resonance pyramid for
HICO which is as follows:

High loyalty and attachment, regular and repeat

purchases, catering to huge community, ice-cream
craving will definitely push customers to purchase
HICO Indulgence, launch of new flavors will
attract customer to go try them.

High credibility, recognizable

quality and superiority by
providing pure dairy ice-cream

Pleasure, excitement, approval,

security, healthy since it uses
finest and purest ingredients.

Super premium quality,

healthy option, finest
ingredients, reliable product,
luxuriant design, and
affordable price.

Pure dairy ice-cream,

unique premium-line
flavors and premium dietline.

Premium dairy ice-cream

providers at an affordable
price, distinctive and
recognizable logo
Figure 2: Brand Resonance Pyramid for HICO

MARKETING PLAN

HICO

The Product Strategy

According to Philip Kotler, there are five product levels each adding more customer value as we
move up the ladder which he named as the Customer Value Hierarchy. (Kotler, Marketing
Management A South Asian Perspective, 2014)
1. Core Benefit. The fundamental level our product offers is the satisfaction of consuming a
dessert, that is the ice cream itself
2. Basic Product. At the second level the product offers the ice cream in a container that is
not only appealing to the customer aesthetics but also gives a feel of loyalty and prestige.
3. Expected Product. At the third level, the consumers expect some attributes and
conditions from the product, such as when they consume the product they expect the
product to not have ice crystals in it and it should be up to specific standards of quality
and hygiene.
4. Augmented Product. To exceed customer expectations, HICO will have to provide their
product on a quality level with flavors, taste, texture and packaging that consumers will
not normally expect form a local company.

Product Classification
HICOs line of premium ice creams will fall under non-durable goods (goods that are consumed
in or few uses) and under consumer goods classification will fall under convenience good (goods
that a consumer purchases frequently, immediately and with minimal effort). But the eventual
goal is to turn the premium line into impulse goods in the minds of the consumers.
To Differentiate the Product

To differentiate itself from the competition such as Walls Carte D'Or range, HICO will not only
have to operate and deliver a high performance quality but also deliver a high conformance
quality. Achieving this will be slightly difficult feat at first but not impossible as HICO is
previously known to never compromise on the quality it delivers.
As previously discussed HICO will have to pay special attention to the delivery of its products as
it is noted in some areas that due to certain limitations its takes HICO a longer time to replenish
stock even after it has been depleted from the shops itself.

MARKETING PLAN

HICO

In terms of returns, the company is challenged by increasing numbers day after day as due to the
load shedding of electricity and heat the ice cream melts or ice crystals form in them making the
ice cream inedible or not conforming to the quality as expected by the consumer. The same or
slightly higher margins for return will have to be kept for the premium category as compared
with the take home category previously mentioned.
Ingredient Branding

Companies do ingredient branding all the time to leverage and to project the high quality of an
ingredient onto some product. HICO already has two ingredient brandings, one with Oreo used
in its Cookies n Cream flavor, and the other with using Canderel as an artificial sweetener in its
Diet Vanilla flavor ice cream.
For the launch of its premium line, ingredient branding will be needed with REESE'S Peanut
Butter Cups for its flavor of REESEs Peanut Butter ice cream.
The Product

To define what constitutes a dairy ice cream, lets first take a look at the ice cream labeling
criteria set by the U.S. Food and Drug Administration (FDA) (IDFA)
Labeling Definitions

There are all kinds of labels on ice creams in the market but consumers are not exactly told the
truth about what these labels truly mean and thus marketers make the consumers believe
differently by implying different meanings from the truth in their marketing campaigns, for
example what Nestle did with its Fruit Juices by calling them All Pure in front of the customers.
1. Ice cream is a frozen food made from a mixture of dairy products, containing at least
10% milk fat.
2. "Reduced fat" ice cream contains at least 25% less total fat than the referenced product
(either an average of leading brands, or the company's own brand).
3. "Light" ice cream contains at least 50% less total fat or 33% fewer calories than the
referenced product (the average of leading regional or national brands).
4. "Low fat" ice cream contains a maximum of 3 grams of total fat per serving ( cup).
5. "Nonfat" ice cream contains less than 0.5 grams of total fat per serving.

MARKETING PLAN

HICO

Quality Segments

The quality of the ice cream is more related to the amount of air in the ice cream called over run,
the price of the product, the positioning of the brand, product packaging and the quality of
ingredients used. According to these standards the finished product should not weigh less than
4.5 pounds per gallon. (IDFA)
"Super premium" ice cream tends to have very low overrun and high fat content, and the
manufacturer uses the best quality ingredients.
"Premium" ice cream tends to have low overrun and higher fat content than regular ice cream,
and the manufacturer uses higher quality ingredients.
"Regular" ice cream meets the overrun required for the federal ice cream standard.
"Economy" ice cream meets required overrun and generally sells for a lower price than regular
ice cream.
If we take a look at the above mentioned criteria for ice creams, then the present range of
products manufactured by HICO can be called as a Premium range with its low overrun (air
mixing) and a higher fat content, but unfortunately this does not seem to be the positioning
present in the minds of the consumers of ice creams in the market, they consider premium ice
creams according to flavors, the presentation and the price tag. Changing such an attitude of the
consumers is not an easy task so why not give them a product that not only is superior in quality
as compared to other competitors but also caters to their premium pallet.
The premium range of HICO will be named HICO Indulgence. It will come in two sizes, one
in a small 200 ml pack for mostly individual consumption and a larger 800 ml pack for the take
home category.
The premium line will initially consist of 8 flavors
1.
2.
3.
4.
5.

Chocolate Chip Cookie Dough

Fudge Brownie Ice Cream
Strawberry Cheesecake
Mint Chocolate Chip
Roasted Almond Supreme

MARKETING PLAN

HICO

6. Chocolate LIGHT (Sugar free)

7. Vanilla LIGHT (Sugar Free)
8. REESEs Peanut Butter Cup
These flavors have been chosen by keeping in mind the love of chocolate people have and its
very relationship with the word Premium. But not all consumers are chocolate lovers, for
them the flavors using almond and strawberry have been chosen so as to cater them as well.
For the really health conscious consumers who are mindful of their calorie intake, a new flavors
of Chocolate Light and Vanilla LIGHT will be introduced with less than 50% fat than the
others and made of artificial sweeteners instead of sugar. Canderal will not be used here so as to
avoid self-cannibalization with the lower end Vanilla Diet flavor.

Packaging
The importance of packaging a product is absolute to the extent that it is sometimes also referred
to as the 5th P of marketing.
Packaging of HICOs premium line of products will consist of two layers of packaging with the
first layer being the container itself on which the ice cream will be sold and secondly the
shipping package consisting of corrugated boxes containing multiple units.
In an average supermarket a typical shopper passes some 300 products per minute (Kotler,
Marketing Management A South Asian Perspective, 2014), so as to make our product unique we
must attract the attention of the shopper, make him or her stop for a second, pick up our product
(increase customer involvement), and eventually place it in their basket.
So to conclude, the packaging of the product will consist of a primary packaging with the use of
the colors gold, brown and orange. With the lid of being an orange color around the rim and the
use of gold and brown colors showcasing loyalty and superiority.

Pricing
One of the important Ps from the four basic Ps is pricing. Price is not just a tag on the product,
it signals out much more than just its price. The price is an indicator of products quality, category

MARKETING PLAN

HICO

membership and exclusivity. To develop an optimum price for our premium line we would focus
upon three key variables:

Reference pricing
Not every consumer buys a premium product, but those who do have a fairly good knowledge of
the range of prices involved. In the case of ice cream the price band ranges from Rs300-Rs400,
where Carte Dor by Walls is charging upto a maximum of Rs 380. Thus the price should not be
less than Rs 300 and not more than Rs4000.we can charge a price greater than that of the walls as
they use vegetable oil and HICO produces pure dairy ice cream. Furthermore the 200 ml pack
would be priced lower than premium products like Magnum by walls which cost Rs110.

Price Quality inferences

As mentioned earlier price is also used as an indicator of quality and thus it is important for
positioning too. A new customer after taking a look at the packaging would see the price in case
of ice cream as at that moment he couldnt taste it. Thus price would then be a single most factor

MARKETING PLAN

HICO

to buy the product or not. The means end model (Zeithaml, 1988) better explains this

Most experimental studies related to quality have focused upon price as the key extrinsic quality
signal.
Pricing objective
The price objective which HICO will pursue is that of product quality leadership. The price
should be just enough to be within the reach of customers and be an affordable luxury. The
psychological discounting method would not be used and secondly the price for sugar free

MARKETING PLAN

HICO

flavors is a bit higher as the artificial flavoring used in it is costly. If it were close to hundred
then we would have used it .the following would be the pricing
Flavor

Price in Rs 800 ml pack

Price in Rs 200 ml pack

Chocolate Chip Cookie Dough

300

80

Fudge Brownie Ice Cream

300

80

Mint Chocolate Chip

300

80

Roasted Almond Supreme

305

80

Chocolate LIGHT (Sugar

310

85

free)
Vanilla LIGHT (Sugar Free)

310

85

REESEs Peanut Butter Cup

305

80

Strawberry Cheesecake

80

Placement
The third P of marketing mix is related to the distribution of the product and the selection of
appropriate integrated marketing channels in alignment with the other three Ps of the marketing
mix.
The marketing channel system that is being proposed for HICO for the distribution and
placement of the premium product in the take home category is as follows:

MARKETING PLAN

HICO

Marketing Channel System

The marketing channel system is basically a set of distribution networks that a firm adheres to
place its product in the market and it is one of the most critical decisions that the management of
the company has to make.
HICO is not utilizing the services of third parties or intermediaries to deliver and distribute its
ice-creams to the retailers. It has its own distribution channel and uses its own trucks to deliver
the ice-cream. As mentioned earlier, HICOs distribution network is not well-established and
most of the times its retailers are out of stock. So, this is the first thing that needs to be improved
and will be focused upon in the marketing channel system.

Consumer and industrial marketing channel level

The consumer and industrial marketing channel level that is being advised for HICO is the Onelevel channel, which is also being employed currently. The only selling intermediary of HICO
will be the retailers that will be selling eventually to the customers. This approach will be most
suitable for HICO. The reason being, the company has already made a lot of investment for
establishing its distribution network, so utilizing those networks will be prudent instead of hiring
any third parties as the distributor.

Pull Marketing Strategy

As mentioned above, that the only intermediary of HICO will be the retailers, so for managing
this intermediary, HICO will need to devote its effort towards pull marketing strategy. In the pull
strategy, the manufacturer basically uses advertising, promotion and other forms of
communications to persuade customers to demand the product from intermediaries, which
eventually induces the intermediaries to order the product from manufacturers. This strategy
benefits the most when the brand has high customer loyalty.
The pull strategy will work for HICO because the companys research proves the fact that if a
consumer buys and consumes HICO ice-cream then he may not buy and consume any other
brand. This indicates that HICO has a high brand loyalty and so the promotional strategies that
are being proposed for HICO will eventually induce customers to demand the product and so
does the retailers to increase their orders. Provided the loyal customer-base of HICO, the pull
strategy will be the most suitable and will eventually help increasing the sales of the company.

MARKETING PLAN

HICO

Selective Distribution
Since the product that is being launched for HICO is a premium product in a take home category,
therefore, selective distribution will be the most appropriate marketing channel in determining
the number of intermediaries. The premium product will be made available only on the selective
stores based on the segmentation and targeting that has been explained earlier. The reason being,
the premium product will be slightly expensive than the currently available ice-cream and since
it will be in a take home category; so making it available at all small and large stores will not be
prudent. The product will be made available in all the large super stores and shops which are
being visited by our selected target market. Moreover, this strategy will also help to overcome
the problem of stock outs that are being currently faced by the retailers, because delivery of
products will be to only selective retailers.
For the distribution of our product we will be focusing on the high end markets of Lahore and
Karachi since these two markets are segmented under the geographic regions. In Lahore we will
be focusing on the major retailers like Jalal sons, Greenvalley, Alfatah, Esajees, Metro Cash n
Carry, Hyperstar, Sawera and many other retailers that include little low level retailers or small
grocery shops that are small enough to be categorized as convenience stores but large enough to
provide their customers with a variety of household items along with diversity of product range.
These stores can be in cavalry ground like best buy, CSD shops, Rahat store and other stores in
DHA like ESAJEEs, Hypermart in Bahria Town. In Karachi we will ne catering to DHA area in
which Clifton markets will be the major ones like Naheed superstore, Zamzama, Dolmen City
Mall, and areas of Gulshan e Iqbal where Metro , The Forum will be in the distribution channel.
Similarly we will be distributing our product at some small grocery stores as well like Aghas
Super Market in Clifton, EBCO etc.

Marketing Communicating Mix

Currently HICO has allocated a 3-4% of its budget for marketing out of which it hardly spends
anything on promotion. HICO can gain the opportunity to communicate the brand image through
a marketing communication mix. Using different modes of communication makes a marketing
communication mix. Presently there are a limited number of communication channels available
to HICO thus it should use the following to promote its premium line.

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Advertising
It is the demonstration and promotion of ideas, goods or services using broadcast media, print
media, display media, network media, and electronic media (Kotler, Marketing Management ,
2014). The premium line of HICO will be using broadcast media, print media, digital media and
display media for its advertising activities.
Broadcast Media
It consists of advertisement on radio and television. Broadcast media will include pip scroll logo
which is also called visual flex and will be made by a designer agency. Pip scroll will cost
around 35-40 thousand depending upon the nature of the logo. After its completion, it will be
given to the cable operators of DHA area to display them while they play movies on cable. The
cost includes the cable operators fees as well. It will be displayed on the cable networks of DHA
area only for three months.
Print Media
It consists of advertisement via newspapers and magazines. It is considered to be the most
attractive and effective form of media because it has the most access. Only Sunday Daily Times
magazine will be considered for the promotion of HICOs premium line via print media. Sunday
is published every Sunday morning by Media Times Ltd. which is a weekly fashion and lifestyle
magazine. Sunday is past its 600th issue of being the supreme English magazine in Pakistan and
grips the trust and interest of people around the world. Each issue covers a range of topics from
fashion and lifestyle to celebrities, community events, cultures, beauty and more (Sunday, 2014).
A full length page ad will be giving which will cost around PKR 20-25 thousand for one page ad
per issue. The ad will be given for two consecutive issues. This ad can be very useful for HICO
because most of the people follow this magazine.
Digital Media
It consists of advertisement via audio tape, video tape, social media and web page. This is the
least costly marketing technique and HICO will be focusing on social media and web page for its
promotion.

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To increase the brand awareness in the younger generation as HICO should focus some of their
marketing to the new media that the younger generation is using such as mobile marketing,
social networks, etc. An official forum, or fan page on Facebook under the name of HICOs New
Premium Line would serve well as a place for discussing, feedback, and promoting upcoming
events.
HICO does not current hold a local web page. HICO should create a web page for Pakistani
market to inform the Internet users about its existence, upcoming events, new promoting
programs and product launches, etc. Internet users are allowed to view, gather the needed
information on the different products available at HICO. This channel will draw consumers
usage, as it is convenient and is evidence that HICO keeps up with the technological
advancements. When designing this web page, HICO should aim to build a good information
center that allows a 2-way feedback between HICO and its potential and current consumers. The
website will give customers information of company highlights which ultimately adds on to a
growing relationship between the company and its customers.

Display Media
Since HICO has always kept a low profile on advertising and has not developed expensive and
loud advertising campaigns till now thus display media is suggested. It consists of billboards,
signs and posters. It is a bit expensive as compared to other advertising strategies. HICO will go
for shop branding only to promote its new premium line via display media. It is relatively
cheaper as compared to other components of display media like TVC and large billboards. HICO
has chosen Bismillah Store for this purpose which is located in main DHA area. It will make a
sign board for their retail shop on which the name of their shop will be written along with the
logo and picture of HICOs new premium line. It will help draw attention of the daily commuters
of this area. HICO will be able get maximum attention from the consumers through such a
display. This will cost around PKR 1, 50,000/- to make the sign board. Moreover the cost
depends on the length of the board and this is a onetime expenditure.

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Sales Promotion
HICO can sell coupons to corporations and companies at bulk price. In addition to this HICO can
collaborate with other luxury brands on several occasions and cater to their VIP customers with
coupons. This will help build a symbolic relationship because it will support the premium line
and help to increase brand awareness since they both share the same customers. Moreover HICO
should also offer membership programs because this will help to create a relationship between
themselves and the customers at an early stage. This will help customers feel loyal about their
brand instead of customers. With an increase in purchasing power and a greater demand for
premium products, HICO will be the chosen brand.

Events and Experiences

These are the activities and programs sponsored by companies designed to create daily or special
brand related interactions with consumers (Kotler, Marketing Management , 2014). HICO has
planned to perform an activity in the basement (activity area) of the Mall of Lahore and Park
Towers in Karachi. The activity will last for three days. The cost of activity per day is around
PKR 35,000/- and it will cost a total of PKR 1, 05,000/- for three days. The activities will include
a free sample testing of the new premium ice cream introduced by HICO. Moreover face
paintings and indoor games will also be arranged for the kids. The same activities will last for all
three days with the addition of puppet and magic show at the second activity day. A clown
similar to HICOs logo will also be present on all the three days of activity who will give
balloons and candies to kids. A Flash mob will also be arranged at the last day of the activity
which will be done by the HICO employees including girls in which they will perform on
different songs wearing shirts and caps with HICO logo. At the end of their performance, they
will serve free ice creams to all the audience present at the last day, thus launching the product
for the first time in the market. By this, the activities will come to an end.
This promotion program has high hope to succeed because it will result in improved customer
engagement and interaction with the brand itself. This will further help customers to associate it
in the form of HICO moments. This will surely help in increasing the sales of HICO. On these
activities, the new premium line for HICO will be physically launched for the first time.

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BIBLIOGRAPHY
Agri Hunt. (n.d.). Ice Cream Industry in Pakistan. Retrieved May 2014, from Agri
Hunt: http://www.agrihunt.pk/agri-news/50/1364.html
Ahmed, B. (2014, May 8).
Arifeen, S. R. (2012). Frozen Food Products Marketing and distribution challenges
faced in a developing country. International Growth Center .
Arifeen, S. R. (2012). Frozen Food Products Marketing and Distribution Challenges in
Developing Countries Case Study: Pakistan.
Chidi, Oluwalaiye, & Okwu. (2011). External and internal environments of
businesses in nigeria: An appraisal. Euro Journals , 18-19.
Friz Tech Refrigerators. (n.d.). Eutectic Coolers. Retrieved from
http://www.friztech.com/products/eucetic_coolers.htm
Grams, C. (2011). The Ad-Free Brand.
IDFA. (n.d.). Ice Cream Labeling. Retrieved from International Dairy Foods
Association IDFA: http://www.idfa.org/news-views/media-kits/ice-cream/ice-creamlabeling
Islamabad Chamber of Commerce & Industry. An Overview of Electricity Sector in
Pakistan. Islamabad.
Kotler, P. (2014). Marketing Management A South Asian Perspective. Pearson.
Sorenson, L. (2012, March 08). 7 Components That Comprise a Comprehensive
Brand Strategy. Retrieved 06 26, 2014, from Hubspot:
http://blog.hubspot.com/blog/tabid/6307/bid/31739/7-Components-That-Comprise-aComprehensive-Brand-Strategy.aspx
Sunday. (2014). Retrieved from http://www.sunday.com.pk
Tanner, J. F. Principles of Marketing and Business Communication.
Trading Economics. (n.d.). Pakistan Inflation Rate. Retrieved May 2014, from Trading
Economics: http://www.tradingeconomics.com/pakistan/inflation-cpi
Wikipedia. (2014). Retrieved from www.wikipedia.com
World Population Statistics. (2013). Pakistan Population 2013. Retrieved May 15,
2014, from http://www.worldpopulationstatistics.com/pakistan-population-2013/

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Zeithaml, V. A. (1988). Consumer Perceptions Of Price, Quality, And Value. journal of

marketing .

Appendices

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Appendix 1

HICO

MARKETING PLAN

Appendix 1

HICO