Investigating E-commerce Benefits in Ice Cream Industry (IMAT5211)

This report analyzes the potential benefits of e-commerce for the ice cream industry in Queensland, Australia. It begins by establishing a research question and methodology, focusing on how online platforms can help regional ice cream companies expand their reach and increase revenue. The report discusses the current state of the Australian ice cream market, highlighting its growth potential and the dominance of major players. It then explores the advantages of e-commerce for organizations, retailers, and customers, including increased market access, reduced operational costs, and improved customer satisfaction through online ordering and feedback. The report also acknowledges potential challenges such as initial implementation costs and the need for specialized skills. The research method involves gathering information from existing marketing research, industrial reports, and research papers, providing a comprehensive overview of the e-commerce benefits in the Queensland ice cream market.

e-commerce
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Table of Contents
Part – A......................................................................................................................................3
Part- B........................................................................................................................................5
The ice cream industry of Australia...........................................................................................5
The benefits of E-commerce in the regional ice cream industry of Queensland.......................8
Reference list............................................................................................................................13
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Part – A
In order to define the problem a research question is synthesized that aims for solving the
research problem:
Investigating the benefits of e-commerce in the ice cream industry in the region of
Queensland
The purpose of this assignment is to discuss the benefits of the e-commerce in the Ice cream
industry of Queensland. After analysing the research papers, a gap has been identified that
deals with the ice cream industry of Queensland that is big but it only serves the local people
because the companies are operating only in physical format and hence the problem is to
reach the potential customers with wide range of frozen desserts.
The rationale of the research is discussed thoroughly in this section stating the need for
conducting this research. According to the report of ice cream industry of Australia, most of
the ice cream stores are located in the state of Queensland, Victoria and New South Wales
and are not located in high population areas that have shopping malls. Due to this, the ice
cream companies comprise of lower traffic in the weekdays and along with that, the revenue
of the industry is noticed to drop by 0.3 percent. According to a study, the ice cream industry
of Australia is scooped up with high profit margins because the market is considered to be
premium market. There are many ice cream companies in Queensland which can only offer
their services to the localised people due to the lack of usage of E-commerce, in other words;
it can be said that most of the ice cream companies of Queensland are known to operating in
a physical format that is, consists of local stores.
In short, it can be said that the ice cream companies of Queensland cannot enjoy the growth
of the industry because the companies cannot reach the customers as the companies are not
operating their business in online mode. As the people of Australia view the frozen desserts
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as a luxury item at affordable price, in this context the ice cream companies seems to face a
great loss due to the limited reach to the potential customers.
The e-commerce in the ice cream market of Queensland will enable the regional industry to
enjoy the overall revenue of the ice cream industry of Australia and hence will bring the wide
range of frozen desserts to the door step of the customers. The research will be interesting
because it will explain different aspects of e-commerce that can be utilized by the regional ice
cream company in order to provide services nation-wide. The research method of this
assignment is considered as a pure research that is, various literatures will be studied for
critical analysis of the benefits and usage of e-commerce in the ice cream industry (regional)
of Queensland. This will shed light to the practical relevance of the issue along with the
creative insight. The research methods for the assignment will include:
 Gathering information from the existing marketing research on the ice cream industry
of Australia along with the industrial report of Australian ice cream market.
 Gathering information from existing research papers.
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Part- B
The ice cream industry of Australia
According to the Global Ice Cream market, Australia is considered ad the most attractive
market for the ice cream manufacturers. The report revealed that more than ten percent of the
food market of Australia is concentrated with the ice cream market. Australia ranks highest in
the Global Ice cream market in terms of market growth and market attractiveness.
Figure 1: Global market position of Australian Ice cream industry
Source: Global Ice Cream marketing report, 2019
As per the industrial report of Ice cream industry of Australia the industrial location of the ice
cream stores are mainly in the Victoria, New South Wales and Queensland. In other words it
can be said that the main distributors of the ice creams are from Victoria and New South
Wales because the respective companies utilizes e-commerce along with operating in the
physical format. The report also reveals a contrasting fact about the ice cream stores that
tends to be located in the densely populated areas with high traffic but still comprises of
lower traffic in the weekdays. Thus, the annual growth of the industry from the financial year
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of 2014 to 2019 has only been 0.9 percent. According to the Payments company Square
( 2019), the ice cream market of Australia is ranked number one in terms of sales and revenue
because the study revealed that at Christmas eve the sales of ice cream was seventy percent
high as compared to other months. The sales falls in the month of January by twenty five
percent despite of being the summer holidays and the sales in the month of February totally
became flat despite of being the summer month.
Figure 2: Sales report of Ice cream in Australia
Source: Payments company Square, 2019
From the above discussion a clear idea about the ice cream market is drawn which will enable
the researcher to understand the scope and benefits of the implementation of the e-commerce
in the regional market of Queensland. The ice cream companies of Queensland are located in
an interior location and hence can only serve the customers locally or to the tourists. The ice
cream companies of Queensland like Daintree Ice Cream Company and many other
companies which serves their customers with wide range of frozen desserts using organic
products are only limited serving regionally because they only operate in the physical format.
The ice cream industry is a capital intensive industry and the industrial report has shown a
negative trend in the growth rate of regional market due to customers’ reach and has
increased in the cost of the operations.
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The benefits of E-commerce in the regional ice cream industry of Queensland
A wide range of products and services are sold on e-commerce ranging from financial
products to health products or services, in this context the ice cream manufacturers are not to
be left behind. In order to gain a competitive advantage for the respective industry, the
regional ice cream makers of Queensland should implement an e-commerce business in their
business to expand from a particular region to nation- wide. E-commerce in ice cream
industry means serving the customers at door step with wide range of frozen desserts and
along with that supplying the frozen desserts to the ice cream parlours of the various
shopping malls of Australia which gather traffic in weekdays as well as in the weekends. E-
commerce can serve benefits to the regional ice cream industry of Queensland and hence the
benefits can be classified in three major categories:
 Benefits to organization
 Benefits to retailers
 Benefits to customers
Benefits to organization
The global report of ice cream industry 2013 states that the ice cream industry is capital
intensive industry with large numbers of market players who are competing in order to
maintain their global market position. The usage of E-commerce in the regional ice cream
industry of Queensland will enable the companies to expand their market from regional to
national with minimum capital investment. In other words it can be said that the companies
can locate their customers or track their customers easily by the monitoring the e-commerce
website of the companies. In addition to that, the companies can also approach for suitable
business partners across the country such as, favourable ice cream parlours whereas; the
frozen desserts of the companies are served to the people. However, the usage of e-commerce
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will enhance the brand image or awareness of the company due to the increased reach to the
customers (Gupta, 2014).
It is evident that the ice cream industries especially regional one cannot forecast the demand
properly and as a result of that there is wastage but e-commerce supports the pull strategy of
supply management wherein the business process initiates as the request comes from the
customers. In other words it can be said that the pull strategy of supply management in the
regional ice cream industry of Queensland will enable the organizations to reduce the
wastage (Hajli et al., 2017). However according to noted scholars, the initial cost of
implementing e-commerce in the ice cream industry is high because it includes the cost of
creating an application of e-commerce and hence there could be another problem like lack of
experience in handling the e-commerce application (Sin et al., 2016). Along with the increase
in the operating cost the cost of labour will also increase because technically talented and
qualified workforce are required by the regional ice cream companies of Queensland in order
to grab the opportunities of the e-commerce. The ice cream companies of Queensland can
increase their reach to the potential customers but the traditional users of physical stores
might mistrust the virtual stores (Paris et al., 2015).
However, it is evident that the legal requirements of Ice cream business claims licensing and
commercial leasing and many other business related paper works (IBISWorld, 2018). In short
it can be said that before starting an ice cream business the regional companies of Queensland
had to face some legal business related paper works. The implementation of e-commerce
business in the regional ice cream market of Queensland can enhance the business process
and can eventually reduce the paper works for starting a business (Kabanda and Brown,
2015). Though e-commerce enhance the process of business for the regional ice cream
companies of Queensland there are legal issues regarding the implementation of e-commerce
because the cyber laws varies from industry to industry and as there is limited usage of e-
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commerce in the ice cream industry of Australia the cyber laws are not clearly defined in this
context (Kurnia et al., 2015).
Benefits to customers
According to the market research report (2018), the annual growth in the take home and bulk
ice cream market in Australia is more than three percent from the financial year of 2012 to
2017. The market has achieved the strongest performance in the year of 2016 in this segment
of take home of ice creams in Australia. From the above stated facts it is clear that the
customers want the food services all the time and hence they prefer the services at doorstep.
In this context the implementation of e-commerce in the regional ice cream companies of
Queensland can provide services to the customers nation-wide however, the customers can
also avail their services of regional ice cream manufacturers anytime from any location. The
customers can be satisfied with this implementation and hence can provide feedback in the
forms of e-review of the frozen products. The regional ice cream manufactures are facing
competition from the global or national ice cream and frozen desserts brands and hence they
cannot reach out to the potential customers (Triandini, Djunaidy and Siahaan, 2017).
A study revealed that the main players in the ice cream industry includes Nestle S.A,
Unilever Group, General Mills, Inc., Blue Bell Creameries, Mars that is in other words it can
be said that the Australian ice cream market are leaded by these market players (Grand View
Research, 2018). In this context due to lack of the usage of e-commerce the regional ice
cream companies of Queensland are unable to reach its potential customers (Khan, A.G.,
2016). The usage of e-commerce application in the regional ice cream industry of Queensland
will provide an opportunity to the customers to compare the products range offered by the
regional ice cream companies and along with that the customers can avail services at
affordable price (Choshin, and Ghaffari, 2017). A contrasting view has been shared by a
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noted scholar, that the food companies can deceive the customers in terms of product
suitability because the people blindly rely on the electronic images of the ice creams or other
food items and when the actual items are delivered to the customers, they tend to feel
deceived (Chiu et al., 2014). However, the lack of touch and feel often prevent people to rely
on e-commerce especially when it comes to food items. This perception of customers also
affect the regional ice cream manufacturers of Queensland and hence they are not encouraged
to operate on the online mode. Despite of numerous benefits the regional ice cream
manufactures are afraid of the uncertainty of e-commerce business because the
implementation of the e-commerce strategy involves huge investment (Ghandour, 2015).
The e-commerce analytics report, 2016 reveals some insights about online business which
states about the peculiar consumer behaviour that is the visitors of the e-commerce site rarely
make any purchase for the first time, in other words it can be said that the visitors generally
look for the rage of products and the reviews about the product and then accordingly they
make decision for purchase (SEMrush Blog, 2016). In short it can be said that the e-
commerce business readily provides information about the products that is the customers can
avail the information about the products from the e-commerce website within seconds (Yu et
al., 2016). The population of Australia are dramatically shifting their preference towards
healthy products and in this context the regional ice cream manufacturers of Queensland like
Daintree Ice Cream Company that use complete organic products in their frozen desserts can
easily share their ingredients and range of healthy yet tasty products through e-commerce. In
other words the customers does not have to rely on the frozen desserts international brands
for organic frozen desserts (Lacka et al., 2014).
Benefits to retailers
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The analytical report of e-commerce, states that e-commerce business does not only provides
services to the customers but the online business has also indulged itself with B2B
organizations (SEMrush Blog, 2016). In other words it can also be said that e-commerce
helps the companies to boost their brand awareness. The regional ice cream companies of
Queensland can be benefited by e-commerce as along with the increased reach to the
potential customers it can also provide services to the retailers like ice cream parlours in the
shopping malls or in any other populated areas which in turn will enhance the brand
awareness of the regional companies (Makki and Chang, 2014). The development of the
pages that can be recorded the search engine crawlers is considered as the most suitable way
that can enhance the search engine optimisation of the website of the regional ice cream
companies of Queensland and hence can target the audience on the site (AlGhamdi, Alfarraj
and Bahaddad, 2015).
However, recent statistics states that the more than 42 percent of the B2B customers are
technology savvy and sophisticated and expect more personalised services from the
organizations just like other customer driven websites. In other words it can be said that the
regional ice cream manufacturers of Queensland can achieve long term growth if they
properly serve those ice cream retailers who are directly serving to the customers. According
to some critiques, though e-commerce can benefit that organizations especially regional
companies by indulging them into B2B segment but despite of all the benefits of long term
growth and enhanced brand awareness the regional manufacturers are subjected to some risks
(Caboni and Bruni, 2015). As compared to B2C model if the ice cream manufacturing
companies are serving to the retailers only the market would limited for them and hence will
be considered as a risk factor for small and medium ice cream manufacturing companies.
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From the above discussion it can be concluded that the facts and the critical analysis supports
that the problem of the regional ice cream manufacturers can only be solved if they indulge
themselves serving the customers in both physical format and online mode.
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