ARUN ICE CREAM

1) Discuss the various strategies of Mr. Chandramogan to build M/s Hatsun Milk Food Limited, as per the case material. In 1970 Chandramogan started Arun Ice Cream with a capital of Rs 36,000 (15000+21000). He started his own factory for producing ice creams, and started over the counter sales initially with low profit margin and low selling price. The shop was placed in busy locality so Arun was able to attract the customers to the full extent. First year arun clocked a turnover of about Rs 150,000 and he was able to get a profit of Rs 40,000. So he thought of relocating plant in the city outskirts. But after that company saw the stagnant growth cost of production was increasing and the sales were decreasing. Chandramogan thought of extending the shop which is his first strategy but that strategy was not good enough as the old because it didnt give the proper sales as it had from the previous one. He decided to take the risk to go into the hotel market. He improved the quality of the ice cream and increased the number of flavors. Mr. Chandramogan then followed niche marketing. Arun ice cream divided the segments into Departmental stores with Deep freezers, Hotels & restaurant and Social Events, mostly wedding parties. Also Mr. Chandramogan with lot of research decided to segment in the Educational Institutions and Supplies his competitors which was ignored byto Ships calling at Madras Port run by their respective mess secretaries. He managed to capture 95% of the market quickly. The target was the upcountry towns other cities like Pondicherry, Madurai, Kumbakonam and Sivakasi as good quality ice cream was not available in these places. Mr. Chandramogan advertised about Arun Ice Cream using banners & hoardings. The test marketing strategies followed was in various ways like; Order booking customer would get Ice cream only when they order in advance. He then followed franchising strategy Mr. Chandramogan came up with the theme called Sit and Eat Parlor with the assistance of an agent.

Logistics also played an important role in building up of business. The most challenging aspect was procurement of milk, a key input in ice cream manufacture. As demand increased, logistics problem was a problem so he planned to start another factory in Salem and Red Hills under the name Hatsun Products. More promotions and offers were given to increase the sales during off season. Participant pay entry charge of Rs 8 and are allowed eating any amount of ice cream on display and the one who consumes the maximum quantity will be declared as winner. Dial a number was conducted in 20 towns attracting over 12000 participants. He also decided to follow a Single Tier Distribution Strategy by directly supplying Ice cream to the point of retail customer sales. The overall distribution cost of Arun was about 3-4% of sales compared to 8-9% for other leading ice cream manufacturers. 2) Analyze the developments at M/s Hatsun Milk Food Limited, from the case Period 1997 till date.

The name of the Company has been changed with the approval of the Central Government from Hatsun Milk Food Limited to Hatsun Agro Product Limited effective from 7.4.1998

In the year 1998, Hatsun Milk Product Limited (formerly known as HFPL) amalgamated with Hatsun Agro Product Limited.

The ISO 9001:2000 certified company produces ice cream marketed as Arun Icecreams; fresh milk as Arokya, Komatha and Santosa milk packs; milk powder and milk fat. The company is a market leader in ice creams across South India with over 70 varieties.

Manufacturing facilities are located in Tamil Nadu and Karnataka with production capabilities of 20,000 MTPA milk powder and 11,000 MTPA milk fat.

Stopped its Rural Retail operations on March 28, 2011 Besides India, the company also has presence in Seychelles, Sri Lanka and the Middle East markets.

Hatsun Milk Product Limited (formerly known as HFPL) amalgamated with Hatsun Agro Product Limited.