What is the Market Segmentation Policy of Igloo

Igloo has designed various marketing mixes according to the different products needs and preferences with regard to the consumer market and has clustered people with similar needs into selected segments namely domestic and international.

Domestic Market Segmentation

For a consumer-oriented company like Igloo, whose main operations rallies around the domestic market, a lion’s share of its resources is devoted towards serving the domestic consumer segments. After thorough analysis, behavior and demographic segments have been identified as their prime areas of focus.

Demographic Segmentation

From the viewpoint of an ice cream manufacturing company, demographic segmentation holds importance in terms of its close relation to customer product needs and purchasing behavior and the ready measurability of variables such as consumers’ age and life cycle and their income.

International Market Segmentation

Since its inception in 1964, Igloo focused solely on the domestic market. Now thirty-seven years after its pioneering venture as an ice cream brand, Igloo has engaged itself in fulfilling the demands of international market.  Expansion to such a degree has been made possible due to the steering of company profits to record levels, gaining wide range marketing experience and the usage of the state-of-the-art-technologies with standardized maintenance of quality. After extensive analysis, Igloo has decided to enter India mainly due to the ease of marketing and the similarity in cultures of both countries.  They have geographically segmented this market into Delhi, Kolkata, Malda, Mumbai, Jaipur, and Bangalore.

Target Marketing

The kind of market Igloo operates in is characterized by the volatility of its general environment, the dynamism of its competitors and most of all the varying and the inconsistency of needs and buying preferences of the consumers market, which are important consideration guiding their day to day operations. Keeping this in mind, Igloo has developed sound marketing programs, which starts with identifying the differences that exists within a market, deciding which segments will be selected and developing specific marketing mixes so as to influence intended customers, and overall perception of the brand, Igloo.

Age

This is the most important component of demographic segmentation. Over the years, ice creams were considered to as being more of a recreational product, but standing on this new century, the effect of globalization has placed ice cream as more of a regularity in our lives.  Igloo has divided its markets in segments according to different age groups such as kids, teenagers, and the family range. Different ages of people are influenced by different flavors of ice cream, different presentations of packaging and different product attributes. Kids incline more towards ice creams, which contains animated and colorful packaging, taste of sweet strawberry, fresh mango, pure vanilla, ripples, hazzle nut coating and crispy flakes. Teenagers prefer low calorie ice cream, more daring and wider range of tastes. Families are influenced more by ice creams that fulfill the general appeal and taste of all the members of the family.

Income:

Income is the key determinant of consumers buying behavior. It is the most popular demographic variable for market segmentation. For a larger part of the population to buy the product, it is very important to segment the market in different income groups. This is given utmost importance in Bangladesh where there is wide variation in the average levels of income. Igloo has divided the market into three income groups – low-income group, mid-income group and high-income groups.

Market Targeting

After market segmentation, Igloo goes for designing, implementing and maintaining marketing mixes intended to meet the needs of the target groups, resulting in mutually satisfying exchanges.

Domestic Market Targeting

The two general strategies Igloo uses for selecting target markets are differentiated and undifferentiated marketing.

DIFFERENTIATED:

In light of Igloo’s marketing approaches, differentiated marketing can be seen in light of their division of two very well defined market segments, namely, kids and family.   For the kids of medium and high end of the market, the main target product categories includes clown – vanilla, chocolate and strawberry ball gum, snowball- vanilla flavored, panda (which resembles a panda), cups such as strawberry, vanilla, and mango.  For kids at the low end of the market, delicacies offered are lolly – with orange and lemon flavors and snow ball (which after eating can be used as a ball for playing).  Igloo has wonderfully attractive, colorful and animated packaging and ice creams that take the form of Disney characters for the kids of all income groups.  For the integrated and the lucrative segment called family, ice cream includes containers- coffee, ripple, tutti fruiti and others, which mainly targets high-income earners.  For families at the mid end of the market, Igloo offers 1 and 2 liters plain box ice creams.  Sticks products such as Mega (Premium Product), Macho, Shell & Core, Cornelli Cones and ripple cakes- vanilla, chocolate and ripple, Shahi Kulfi –vanilla with nuts are all for mid and high end of the market. For high end of the market, Igloo provides consumers with parlors where they are thirty-five different flavors from which hundred different sundaes can be made.

UNDIFFERENTIATED:

An undifferentiated target strategy approaches the segment as one big market with no individual segments and thus requires a single marketing mix. Chocobar and the newly introduced Kulfi are the prime examples related to successful targeting of the mass market. Chocobar priced at TK 12/-, mini chocobar priced at TK 10/- and Kulfi priced at TK 5/- with sober colored packages enables Igloo to go for mass marketing.

International Market Targeting

After careful analysis, Igloo has segmented its foreign market and has targeted Calcutta, NorthEasternState of India and Agortola to be their areas of focus. These areas constitute of people with similar cultures and income level and where it is easier to promote the products of Igloo.

Market Positioning

Positioning refers to developing a specific marketing mix to influence potential customers overall perception of a brand, product line or organization. The marketing manager of Igloo assumes a realistic view of how customers think about their offerings in the market. At the same time, the manger also knows how he wants target customers to think about its marketing mix. According to him positioning issues are especially important when competitors in a market appear to be very similar, with the ice cream industry being a prime example.  Igloo follows several positioning strategies.

Products Attributes

Macho – Exquisite

Chocobar – Energetic

Shell & Core – Metange

Lolly – Eager

Clown – Animating

Mega – Energetic

Coffee – Refreshing

Ripple – Praiseworthy

Pralin – Puissance

Cornelli – Dual

Usage Occasion:

Usually consumers perceive ice cream as an integral part of summer. Igloo aims at positioning ice creams to as being a winter item along with its regular summer item image. Igloo is trying to position its ice cream as a item for all seasons in other parts of the country like that is perceived in Dhaka, through different promotional activities.

Against a competitor: Several of Igloo products such as Kulfi, Chocobar, Cups and box are positioned against similar products of other competitors such as Kwality, Polar and Savoy

The Marketing Mix

There are many possible ways to satisfy the needs of target customers. A product can have many different features and quality levels. Service levels can be adjusted. The package can be of various sizes, colors or materials. The brand name and warranty can be changed. Various advertising media – television, newspapers, magazines, radio, and billboard may be used. A company’s own sales force or other sales specialist can be used. Different prices can be charged. Price discounts may be given and so on. With so many possible variables, is there any way to help organize all these decisions and simplify the selection marketing mix. The answer is –

The Four P’s: Product, Place, Price and Promotion

In the above diagram the customer is shown surrounded by the four P’s. An important point to note is the customer should be the target of all marketing efforts but it is not the part of the marketing mix. Hence, Igloo follows this concept and places its customers in the center. The customer “C” stands for some specific customers – the target market of Igloo.

Therefore, Igloo creatively blends and develops the best mix for its target market. In other words, each decision works well with all the others to make a logical whole and now we will turn our synopsis to each of the components.

Product :

for Igloo the Product decisions revolve around developing the right product for the target market and this includes not only the physical unit but also warranty, brand name, company image, value and many other factors. Apart from maintaining a superior quality through its imported ingredients and bringing regular production consultants from India, Pakistan, Denmark and Holland, the units’ separate R&D department regularly analyzes new products through its market research to answer questions as:

At what price consumers would like to buy the product.

1. Flavors and essence to be used.
2. Consumers’ feedback.
3. Analyze other markets.

Igloo’s Product line includes distinctive ingredients, as some are vanilla flavor with chocolate hazelnut or milk coating, some may have crispy flakes, others include Pista nut. On the other hand, to provide a taste of refreshment there are flavors including coffee, strawberry, mango, with almonds and ripples. Each of these delicacies has positioned itself as a unique brand in consumer’s mind. As a result reckoning any of its names immediately strikes the consumer with its idiosyncratic savor, which he identifies through words as- Superb, Cloying, Mouth-watering, Refreshing, Exquisite, Energetic, Puissance, Animating!!!  These eclectic tastes have been able to exceed consumer’s expectations resulting to delightful consumers and thus to the creation of a powerful company image.

PRICE:

Price is what the buyer wants to give up obtaining the product. It is often the flexible of the four marketing mix elements – the quickest element to change. Igloo in setting its price considers the kind of competition in the target market as well as the cost of the whole marketing mix. It has developed a wide range of prices for its various segments. This includes a range starting from TK 5/- to TK 25/- for cups and sticks, TK 45/- to TK 200/- for family pack items as depicted in the table below. Need to say Igloo’s parlor, which extensively caters to the taste of the upper income consumers, has a price range of TK 75/- to TK 500/-.

Price List of The Different Items of Igloo

PLACE:

Place is concerned with all the decisions involved in getting the right product to the target market. A product isn’t much good to a customer if it isn’t available when and where it’s wanted. Hence, through implementing a channel of distribution, Igloo makes it product available to the final consumers.

The distribution network is stretched all over the country with a long fleet of refrigerated vans. Firstly, the ice cream products are stored at the central warehouse of the factory, and from there they are distributed through the haulage vehicle to the following operational centers.

Dhaka              :          Covering the Dhaka and adjacent sub-base markets.

Chittagong      :          Covers the South and South West part of the country.

Comilla            :          Covers the Western part of the country.

Khulna                        :          South and South East part of the country.

Rajshahi          :          Northern part of the country.

Apart from that Igloo also operates through ninety-five trolleys for extending its reach to various consumers at different locations as schools, alleys, streets, parks e.t.c. Also shopping malls as One Stop Mall in Rapa plaza, Agora in Rifles Square, Stop and Shop as well as departmental stores as Yusuf, Needs, Almas contains Igloo’s freezers. Its network also covers lanes and by lanes through appointing local distributors and dedicated sales teams to accompany their freezers.

PROMOTION:

Promotion is concerned with telling the target market about the product that has been designed for them through a proper channel, which includes personal selling, advertising, sales promotion and public relations.

Igloo basically follows three different promotional activities and their explanations are given below:

Trade partners and retailers – Bulk purchases are rewarded through volume incentive scheme such as cash discounts or a few liters of free   purchase.

Consumers – Availability of scratch cards through purchase of certain flavored ice creams enables consumers to obtain different types of gifts such as CD player, radio, television e.t.c. Also last year (2001) every purchase of Macho had a Kit Kat free.

Social Occasions – Even specific promotions are developed for Eid, Christmas, Friendship, Valentine and other occasions. For example this year the parlor had a package for 14^th February which included a couple buying TK 200/- worth of ice creams would get a free cassette of love songs. Also during the Eid time the prices of most of the ice creams are reduced to a certain level in the retail outlets.