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Another Paper on Baskin Robbins Marketing Plan

The introduction of the new product, Baskin Robbins ice cream Vanilla with Saffron needs the elaboration of the effective and accurate marketing plan with a particular attention being paid to the distribution strategy and distribution channels used by the company. The distribution strategy is extremely important for the overall success of the introduction of the new product because a stable supply of Baskin Robbins ice cream Vanilla with Saffron will allow the company to reach the target customer group fast and to increase its sale rates. The development of the distribution strategy and distribution channels for Baskin Robbins ice cream Vanilla with Saffron will need the clear identification of the placement of the new product, shipping of the new product to customers, and the involvement of middlemen to distribute the product successfully. In this regard, the company should be very careful in terms of choosing middlemen and shipping strategy because the choice of middlemen and shipping methods will influence considerable the costs of the production and delivery of the new product to customers. Saving costs on the shipping can help the company to decrease the price of the product, whereas reliable middlemen will help the company to gain considerable benefits because the company will supply products to customers in time and respectively to their needs. Therefore, the distribution strategy and distribution channels can define the overall success of the introduction of Baskin Robbins ice cream Vanilla with Saffron in the market and the company needs to focus on the use of large retailers to distribute the product nationwide and gain maximum profits.

On analyzing the current situation in the market, it is important to place emphasis on the fact that the effective distribution strategy involves the use of distribution channels that allow the company to supply a large amount of the new product to customers. In fact, the product should be delivered fast, sold to mass customers, and the new product should be introduced in the right time and right place. At this point, it is important to understand the Baskin Robbins ice cream Vanilla with Saffron is a seasonal product because the US market of ice-cream is vulnerable to seasonal changes in the consumption of ice-cream. What is meant here is the fact that almost entire territory but some Southern states of the US tend to consume ice-cream in summer and partially in spring and autumn, whereas winter is the worst season for the production and sales of ice cream because sale rates drop substantially. In fact, the drop of sale rates of ice cream result from seasonal changes. As the temperature of the environment drops and the weather becomes colder, clients are unwilling to purchase and consume ice-cream as much as they used to do in the summer, when it is hot and the hot whether stimulates customers to consume more ice cream than they do in winter. Such seasonal fluctuations in the consumption of ice cream will naturally affect sale rates of Baskin Robbins ice cream Vanilla with Saffron. Therefore, the company should develop its distribution strategy respectively to seasonal changes. This means that the company should increase the production and distribution of Baskin Robbins ice cream Vanilla with Saffron in summer and decrease the production and distribution of ice cream in winter. In such a way, the company will respond adequately to the demand of the market.

Furthermore, the placement of the product is another important issue that affects the distribution strategy and distribution channels of the company producing Baskin Robbins ice cream Vanilla with Saffron. In fact, the company should focus on the distribution of Baskin Robbins ice cream Vanilla with Saffron nationwide, although the company can expand its target market from the US to other countries, such as Canada, Mexico, and the EU. However, the further market expansion will need the introduction of changes in the distribution strategy and distribution channels of the company. At the moment, the company will focus on the distribution of Baskin Robbins ice cream Vanilla with Saffron within the US (Breneman & Taylor, 1996). The distribution of the product should cover the entire territory of the US but Alaska for the delivery of the ice cream to Alaska will be costly, whereas the company can hardly reach the high level of the consumption of ice cream in the Northern state, where the weather conditions are not favorable for mass consumption of ice cream for the cold weather throughout the larger part of the year is likely to contribute to the low consumption of ice cream in Alaska. Instead, the company should focus on the distribution of the ice cream on the rest of the territory of the US and probably increase the distribution of ice cream in Southern states, such as Florida or California, where physical conditions are favorable for mass consumption of the ice cream (Gwynn, 2004). The company should also focus on the localization of the production of the ice cream. This means that the company should develop its production facilities nationwide to decrease the costs of transportation and delivery of the ice cream to customers. In this regard, the company should focus on key directions, for instance to increase its production facilities in the South and to construct three plants in Southern states. In addition, the company should have one plant on the Western coast of the US, one plant should be on the Eastern Coast, and one in the Middle West. In such a way, the company will cover the entire territory of the US and supply its product to customers fast and respectively to the demand existing in the market at the moment. The development of the production facilities’ network will decrease costs of the delivery.

The shipping is another important issue that affects consistently delivery channels. The company should focus on specificities of the shipping of Baskin Robbins ice cream Vanilla with Saffron. In fact, the ice cream has its own specificities in terms of shipping and the delivery of the ice cream is quite different from the delivery of other products. To put it more precisely, the shipping of the ice cream should be fast because the product is frozen and, therefore, the long lasting shipping can spoil the product and increase the costs of the delivery substantially. In addition, the special equipment is required because the ice cream should be stored and shipped in refrigerators. Therefore, the company can use specially-equipped trucks with refrigerators to deliver Baskin Robbins ice cream Vanilla with Saffron to customers. Taking into consideration the location of production facilities of the company, the company can maintain fast and safe delivery of the ice cream to customers. The latter means that the ice cream will be delivered fast and in perfect condition with minimal risk of spoiling because conditions of the shipping match technical requirements to the shipping of ice cream.

Finally, the company should choose middlemen to sell Baskin Robbins ice cream Vanilla with Saffron to customers. In this regard, the company should choose large retailers to distribute its new product nationwide. To put it more precisely, the company should focus on such large retailers as Wall-Mart and Target. In addition, the company can negotiate the distribution of Baskin Robbins ice cream Vanilla with Saffron through the Starbucks’ network because Starbucks can be an effective middleman to distribute the ice cream. The use of the largest retailers in the US allows the company to maximize its sale rates because large retailers attract mass customers (Gwynn, 2004). Therefore, the company can reach its target customer group easily and boost its sale rates from the beginning of the introduction of the product. In such a way, the company will use reliable retailers because large retailers are renowned and contribute to the fast distribution of the ice cream nationwide. They have well-developed network and can provide the company with the possibility to increase its sale rates from the beginning of the introduction of the new product in the market.

The budget of the introduction of the new product and expected revenues and expenses of the company in the course of three years since the introduction of Baskin Robbins ice cream Vanilla with Saffron in the market are presented in the table 1:

Table 1. Budget 2012-2014

2012
(thousands USD) 2013
(thousands USD) 2014
(thousands USD)
Sales $461,900 $484,735 $508,712
Direct Costs of Goods $277,140 $282,620 $288,210
Hidden Row $0 $0 $0
———— ———— ————
Cost of Goods Sold $277,140 $282,620 $288,210

Gross Margin $184,760 $202,115 $220,501
Gross Margin % 40.00% 41.70% 43.35%

Expenses

Payroll $86,240 $88,840 $92,840
Marketing/Postage/Other $6,000 $6,000 $6,000
Depreciation $2,500 $2,500 $2,500
Legal $1,200 $1,200 $1,200
Books/Accounting $1,200 $2,400 $2,400
Licenses/Permits/Memberships $900 $900 $900
Delivery/Transportation $4,800 $4,800 $4,800
Insurance $3,600 $3,600 $3,600
Rent $30,000 $30,000 $30,000
Utilities $12,000 $12,000 $12,000
Equipment/Supplies $4,800 $4,800 $4,800
Building/Equipment Maintenence $1,200 $1,200 $1,200
Payroll Taxes $12,936 $13,326 $13,926
Other $1,200 $1,200 $1,200
———— ———— ————

Total Operating Expenses $168,576 $172,766 $177,366

Profit Before Interest and Taxes $16,184 $29,349 $43,135
EBITDA $18,684 $31,849 $45,635
Interest Expense $5,997 $5,107 $4,179
Taxes Incurred $3,056 $7,272 $11,687

Net Profit $7,131 $16,969 $27,270
Net Profit/Sales 1.54% 3.50% 5.36%

Thus, taking into account all above mentioned, it is important to place emphasis on the fact that the introduction of Baskin Robbins ice cream Vanilla with Saffron will need the development of the effective and reliable distribution strategy and distribution channels. In this regard, the company should focus on the US market and distribute its products nationwide, but Alaska. In addition, the company should develop its production facilities nationwide. The localization of the production will allow the company to decrease costs of the delivery of the new product to the target customer group. The product is seasonal. Therefore, the company should increase and decrease the production and delivery of the product respectively to the demand of the market. Finally, the company should use large retailers to sell Baskin Robbins ice cream Vanilla with Saffron nationwide.

 

REFERENCES:

Breneman, D. W., & Taylor, A. L. (eds.). (1996). Strategies for promoting excellence in a time of scarce resources. San Francisco: Jossey-Bass.
Gwynn, T. (2004). The Sweet Spot: The Story of the San Diego Padres Petro Park. New York: Routledge.