Evaluation of Entry into Ice cream Business - BRAC University ...

Among the retail shops, there are about equal numbers of branded and unbranded freezers. This is a
normal scene in Dhaka where all shopkeepers require freezer to keep other cold products. However,
basic distribution policy is that, if a shop has branded cabinet of a company, they cannot keep
competitor ice cream in that cabinet. Thus, penetration can be made possible in shops where
unbranded freezers are available.
General branded freezer contract policy with Igloo and Polar is that traders have to pay BDT 5000 to
take a freezer. Maintenance of branded freezers is responsibility of the company but electricity bill is
paid by shopkeeper. However, Polar is not currently giving any new freezer. Kwality gave away their
freezers for free; however, they ensured safety of their freezers by checking background of the
shopkeepers.
Cart sellers: Cart sellers collect required amount of ice cream from nearby distribution house or
company showroom (Igloo has one showroom in Panthapath) on a daily basis. They also have to buy
cartons of products, not pieces. Kwality carts collect their ice cream from factory (Tejgaon) or nearby
distribution house. Cart sellers contribute around BDT 3000 sales in a day and generally sell at BDT
1-2 higher than set price of each product.
The cart sellers generally keep at least a two-day stock so that they can meet sudden upsurge in daily
demand of ice cream or if they get the opportunity to sell at parties, programs or any open air event
(Wedding at community centres or outside cultural programs at auditoriums). If cart sellers need
replenishment of stock, they even take service more than once in a day either revisiting showroom/
house or they call up company delivery people to serve them at their location if there is opportunity for
selling more ice cream.
Policy regarding Damaged Ice cream: All the ice cream producers have very good relationship with
the shopkeepers. If the retailers have refrigeration problem, company takes ice cream back until the
problem is fixed, whether it is stored in branded freezer or not. Also if any ice cream gets damaged or
there is bacterial formation, company takes them back. Usual return time varies from 15-30 days. For
large sellers however, they take less time.
Payment Method for Ice cream Purchase: All the companies give credit of around one month to
large volume contributing retail sellers and try to maintain good relationship with them. This trend is
seen in all channels. Also all the SMMTs and MTs are given credit of one month and payment is
made by cheque. Other small shopkeepers have to purchase with cash. However, according to
shopkeepers Igloo is currently trying to cut down on credit sales as they believe there is a consumer
pull for their brand. Companies like Polar and Kwality also give special commission to large sellers.
Polar gives 5% commission on every bill.
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