ECO600: Movenpick and Ben & Jerry's Ice Cream Market Analysis Report

This report provides a comprehensive analysis of the competitive dynamics within the Australian ice cream market, focusing on two major players: Movenpick and Ben & Jerry's. It examines the market structure, identifying it as a monopolistically competitive environment with significant barriers to entry. The report delves into the competitive strategies employed by each company, including Movenpick's focus on acquisition, expansion, and franchising, and Ben & Jerry's emphasis on franchising and expansion. It further evaluates the pricing strategies, highlighting Movenpick's use of psychological pricing and Ben & Jerry's adoption of anchor pricing. The report also proposes strategies for improving competitiveness, suggesting social media marketing and enhanced customer service for Movenpick, and vertical and horizontal growth for Ben & Jerry's. The analysis draws on information from company websites, online retailers, and magazines to provide a detailed overview of the market and the competitive approaches of these two ice cream giants.

Running head: MOVENPICK AND BEN AND JERRY'S ICE CREAM PARLOR MARKET 1
Movenpick and Ben and Jerry's ice cream parlor market
Name
Affiliation
Date

MOVENPICK AND BEN AND JERRY'S ICE CREAM PARLOR MARKET 2
Movenpick and Ben and Jerry's ice cream parlor market
Abstract
The report gives an analysis of two rival businesses of Ben and Jerry and Movenpick.
The companies both operate in the Australian ice cream market with almost similar competitive
strategies. as per the report, the ice cream market in Australia comprises of a monopolistic
competitive market structure with large sellers who make the competition stiff. This stiff
competition blocks new entrants into the ice cream industry. The growth strategies employed by
Movenpick include acquisition, expansion, and franchising. Ben and Jerry's use franchising and
expansion strategies of growth. Regarding the pricing strategies, Movenpick uses psychological
pricing while Ben and Jerry's uses anchor pricing.
1. Introduction
This report gives a detailed analysis of two rival businesses in the ice cream industry. The
major goals are to give an analysis of the competition within the industry and take a decision on
whether one can join it or how one can compete favorably. Besides, the report aims at
determining whether the industry has a growth scope and how growth can be created in the ice
cream industry. Furthermore, the report gives an evaluation of the strategies of both pricing and
non-pricing employed in the sector. Lastly, the report established practical and creative strategies
for pricing, competing, and growing that one can give to clients or bosses in the proposal form.
The companies to be investigated are Ben and Jerry and Movenpick. Movenpick was
started in the year 1948 in Zurich (Nestle, 2016). It operated as a restaurant. In the years 1960,
ice cream was introduced to the business. However, it was majorly for sale in only restaurants. In
the year 2016, the company opened up an ice cream branch in Australia. Ben and Jerry's is a

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company based in the United States and deals in ice cream, Sorbet, and frozen yogurt. The
company started in the year 1978 in Vermont. As of today, the company worked as a Unilever
subsidiary and operated in numerous countries across the globe. In Australia, the company
opened up its branch in 2010.
The research about the companies was carried out on their websites, online stored that
retail the products, as well as magazines. Section 2 of the report covers the competitive strategies
and the structure of the market, as well as the industry of ice cream. Section 3 gives the strategies
of growth of the selected companies, the last section gives the strategies of both pricing and non-
pricing employed by the two companies, and the conclusion gives the summary of the major
concepts covered in the report.
2. Market structure and competitive strategies
The ice cream industry comprises of a monopolistic competitive market structure. Under this
type of market structure, there exists are several firms that manufacture differentiated products
which are near substitutes for each other. Firms in this industry are large sellers who sell similar
products but not identical and usually compete for market share on several other factors apart
from price.
2.1. How the businesses are currently competing
The stiff competition in the ice cream industry forces manufacturers to differentiate their
products by using innovative and unique techniques (Research and Markets, 2019). Movenpick
and Ben and Jerry's have multiple numbers of competitors both in domestic and international.
These include Haagen-Dazs, Breyers, Baskin-Robbins, Blue Bell, Dairy Queen, Friendly's,
Turkey Hill, Cold Stone Creamery, Blue Bunny, and so many others. Because the ice cream

MOVENPICK AND BEN AND JERRY'S ICE CREAM PARLOR MARKET 4
market is characterized by a monopolistic market structure, there is a free entry in the market.
There are, therefore, several new entrants in this market (Research and Markets, 2019). Reports
indicate that the global market for ice cream is rapidly expanding and is expected to even grow
further due to the increased profits obtained from this product and increased indulgence for
unique and sweet dishes, (Research and Markets, 2019). Additionally, the growth of the ice
cream industry is attributed to the rising popularity of ice creams, which can as well be served as
take-home products (Agarwal, 2019).
Several factors are hindering the entry of new firms in the ice cream industry. First, there are
higher levels of product differentiation in the ice cream industry. This is accomplished through
excellent customer service and great brand recognition. As per the current ice cream market
structures, customers perceive the available ice cream products as high-quality products. Any
business entering this market will need to invest more in educating customers about the benefits
and uniqueness of the new ice cream products the company wants to provide to them.
Additionally, limited distribution channels and access to suppliers and lack of access by a new
firm to access the unique raw materials needed in the manufacturing of high-quality ice cream
also acts as a barrier to entry in this market, (Research and Markets, 2019). The already existing
companies may have made long-term contracts with their suppliers, which poses a barrier for a
new entrant to work in that industry. High start-up costs also greatly prevent new entrants in the
ice cream industry. The higher prices of flavors such as chocolate, vanilla, and strawberry as well
as other ingredients, which can be used to produce unique products different from the ones
already produced in the market, specifically bring this about. More so, new entrants in the ice
cream market are hindered by the strict government regulations. Because ice cream also lies in
the food and beverage industry, the rules and regulations on this industry are very strict, making

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it difficult for new entrants to join the industry. All new businesses looking to starting a business
in any industry are always required to obtain an operating license to start operating. These
licensing requirements and other government approval requirements also discourage multiple
individuals willing to enter the ice cream industry (Hayes, 2019).
Considering the market share in Australia, the companies have the following shares:
Ben and Jerry's 35%
Movenpick 20%
Using the Herfindahl-Hirschman Index;
HH1 = 352 +202=1225+400=1625
Therefore, the HHI of 1625 indicates that the Australian market place of Movenpick ice cream
company and Ben and Jerry's is moderately concentrated.
There are several strategies of competition employed by Movenpick Ice Cream Company as
well as Ben and Jerry's to cope up with the increasingly growing competition in the ice cream
industry. Ben and Jerry employs extra quality and ingredients that are all-natural in nature as
well as flavors that are innovative and able to facilitate the differentiation of products to gain a
super competitive lead in the market of ice cream. The company uses quirky flavors such as

MOVENPICK AND BEN AND JERRY'S ICE CREAM PARLOR MARKET 6
Phish Food, Chubby Hubby, Chunk monkey, and Wavy Gravy to differentiate its products from
the traditional and common names of ice cream products used by its competitors, (Hayes, 2019).
Additionally, Ben and Jerry's has employed extraordinary efforts in developing brand loyalty,
which has greatly helped the company gain a favorable image and reputation from its buyers by
carrying out several promotional campaigns. Like Ben and Jerry's Movenpick ice cream also
uses unique flavors such as Mango Crème Fraiche, Pannacotta, crème Apricot, and so many
others to gain a strategic competitive advantage in the ice cream industry. The high level of
innovativeness expressed by the company has greatly contributed to its reputation following the
several awards it has been winning, including ice cream of the year, (Hayes, 2019).
2.2. Proposals for improving the competitiveness of the business
As a consultant in Movenpick, several competitive strategies one would advise the company
to undertake exist. First, the company can use social media as a major marketing platform. In the
modern world, the use of social media platforms such as Facebook, LinkedIn, and others are
rapidly increasing at a very fast rate. Advertising on such platforms has greatly contributed to the
growth and development of several companies, including Ben and Jerry's market rival.
Therefore, the use of social media will help Movenpick to develop brand loyalty and awareness
of its customer base, which is the young generation. Besides, the company can offer great
customer service to its buyers. Excellent customer service is one of the strategic ways through
which people pick interest in a particular product (Jackson, 2016).
3. Growth strategies
3.1. What the two businesses have done/or are doing so far to grow/expand

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Both companies are employing different growth strategies to attain a sustainable competitive
status in the industry. Movenpick is focusing on the core competencies of ice cream production.
The firm is employing acquisition, expansion, and franchising strategies to broaden its market as
well as a distribution base. Movenpick is opening numerous retail stores across major cities in
Australia to ensure the growth of ice cream production trends in Australia (Research and
Markets, 2019). Besides, the company is in plans of acquiring smaller ice cream companies in
the country to boost its market base. Furthermore, numerous retailers and distributors are being
licensed to sell, market, as well as distribute Movenpick products. With this strategy, the
company is sure that its products' marketability and popularity are growing at an extremely
higher rate. Through the franchising strategy, smaller ice cream companies are permitted to use
Movenpick's logo on their ice cream products in their respective markets.
Ben and Jerry's mainly uses franchising and expansion growth strategies. The firm is
franchising smaller companies at a lower cost compared to other firms employing the same
strategy. For instance, the firm's franchise can be granted at a fee ranging from $156,000 to
$486,700. Initially, the franchise fee ranging $16k to $37k can offer one a license to use Ben and
Jerry's trademark, (Research and Markets, 2019). Through this strategy, the company can widen
its market and grow at an extraordinary rate. Furthermore, the company is also opening
numerous stores in different parts of Australia to ensure that the ice cream is within the
customer's reach. Moreover, to ensure that it covers a wider market, Ben and Jerry's also deals
with different related products like Sorbet and yogurt.
3.2. Proposals for growing the business

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The company chosen earlier is Ben and Jerry's. The company should grow. The firm has
reflected a high level of focus across America, Europe, and Asia markets. Besides, the company
produces high-quality products across all of its production branches (Jackson, 2016). This is
explained from the perspective that the company has numerous smaller business interested in
securing franchises (Research and Markets, 2019). This implies that the smaller companies are
sure that once Ben and Jerry's logo and trademark are used on their products, a bigger mass of
customers will be pulled from across the countries of operation. The company should grow both
vertically and horizontally. Vertical growth will enable the company to concentrate on the local
market, maintaining its products to deepen its current market base. Through horizontal growth,
the company will be able to expand and operate in different geographical locations; thus making
its product is known globally, (Jackson, 2016).
4. Pricing and non-pricing strategies
4.1. Pricing strategies of Movenpick and Ben and Jerry's
Most of the strategies of pricing of Movenpick and Ben and Jerry's are the same.
However, the companies are also different in several ways. When pricing its products, an anchor
pricing strategy is used by Ben and Jerry's. The company sells its products at fixed rates.
However, its pricing decisions are dependent on the initial price information in the market
(Jackson, 2016). The prices charged by Ben and Jerry's for its products are relative to the nature
of the ingredients used while manufacturing its ice cream. Because the company uses all natural
ingredients, the prices charged are higher than the ones charged by their competitors such as
Movenpick. On the other side, Movenpick uses psychological pricing strategy since the company

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is still in its growth stage. The company sets the prices of its products basing on the prices of its
competitors (Nestle, 2016).
Table 1: Comparing the pricing of the most commonly known products of Movenpick and
Ben and Jerry's.
Product Price and strategy of
Movenpick
Price and strategy of Ben
and Jerry's
Chocolate $4.99/liter
(psychological pricing)
$5/liter
Strawberry $4.49/litter $4.5/litter
(Anchor pricing) dropped
from $5/liter
Most of their pricing and non-pricing strategies are similar. Both companies use
advertisements as the most effective marketing strategy to reach their target market. However,
because Movenpick is still at its growing stage, the company invests less in advertising.
Additionally, Movenpick uses a cost-based pricing strategy in setting prices for its products
whereas Ben and Jerry's uses competitor orientated pricing strategy since the company has
already prospered in this industry, (Hayes, 2019).
The two companies are using the above pricing and non-pricing strategies because of
their status. Movenpick is currently at its growth stage. This is the main reason as to why the
company is using cost-based pricing. Now, the price of its products can only be determined by
calculating the cost of the manufacturing process to determine the number of profits obtained on

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each product. On the other side, Ben and Jerry are one of the biggest ice cream companies in the
United States (Hayes, 2019). The company is already earning millions of profits. Therefore, the
use of competitor-orientated strategy is one of the ways through which the company can remain
on top and as well still earn abnormal profits.
4.1. Proposal on pricing strategies
Movenpick had a capacity of benefiting more through changing its strategy of pricing.
Use of cost-based pricing strategy will lead to the company to charge higher prices for its
products, which will chase away its customers. Movenpick should instead use penetration-
pricing strategy to help the company increase awareness of its products to the public and hence
increase in its profits. On the other side, Ben and Jerry's should maintain its premium pricing
strategy.
4.2. Non-price strategies used by Movenpick and Ben and Jerry's
Although the two companies use pricing strategies to cope up with the stiff competition
in their market, they also use non-pricing strategies to help them reach more customers and
compete with their rivals in the same industry. Ben and Jerry's uses promotional strategies such
as making extensive advertisements on its website and social media platforms such as Facebook,
Twitter, LinkedIn, and so many others. On the other side, Movenpick has also invested in
making its products available to several groups of people in over 40 countries by ensuring
efficient distribution of the products through its parlors, retail channels, and hotels. Movenpick
also invests more in ensuring good packaging of its products (Hayes, 2019).
4.3. Proposal on non-pricing strategies

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Because the company has already developed its brand, the only thing it should put extra
efforts in is improving its packaging and marketing as well as producing high-quality products to
provide support to its premium price, (Research and Markets, 2019). Movenpick should adopt
the e-commerce advertisement campaign with online portals and apps to attract a bigger mass of
customers.
Conclusion
Considering the facts discovered in this investigation, it is obvious that the ice cream
industry is easy to enter through, there are several barriers that discourage new individuals from
entering the industry. This is because the industry operates under a monopolistic market
structure, which is characterized by free entry and exit. Movenpick and Ben and Jerry's are some
of the companies operating in this industry. However, there are several other companies in the
industry, which have contributed to the rapid increase in the competition in the industry as well
as its overall growth and development. It was discovered that Movenpick and Ben and Jerry's use
similar non-pricing strategies but comprise of different pricing strategies. This is accounted for
their different stages of growth. In the investigation, we observed that use of penetration
strategies is one of the ways through which Movenpick can penetrate the ice cream industry,
even more, considering its growth stage. On the other side, Ben and Jerry's can maintain their
current status through maintaining their premium price while supporting it through improving
their packaging, and production of high-quality products. As per the current reports released on
the ice cream industry, the future is exciting. The industry is growing at a very fast rate and is
expected to even grow more in 2024.

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References
Agarwal, P., (2019). Monopolistic Competition Market Structure. Retrieved from
https://www.intelligenteconomist.com/market-structure-monopolistic-competition/
Hayes, A., (2019). Barriers to Entry. Retrieved from
https://www.investopedia.com/terms/b/barrierstoentry.asp
Jackson, K., (2016). Ben & Jerry's. Retrieved from
http://katjackson5972.blogspot.com/2016/02/chapter-2-strategic-planing.html
Nestle, (2016). Mövenpick launches the largest boutique in Australasia. Retrieved from
https://www.nestle.com.au/media/newsandfeatures/m%C3%B6venpick-launches-largest-
boutique-in-australasia
Research and Markets. (2019). Global Ice Cream Market Trends, Share, Size, Growth,
Opportunity, and Forecast 2019-2024. Retrieved from
https://www.globenewswire.com/news-release/2019/03/01/1745314/0/en/Global-Ice-
Cream-Market-Trends-Share-Size-Growth-Opportunity-and-Forecast-2019-2024.html