Marketing

11 Pages 2676 Words

Ben & Jerry¡¦s was experiencing a steady growth within their sales figures from 1990 to 1993. However, In March 1994, Cost of Sales increased approximately $9.6 million or 9.5% over the same period in 1993, and the overall gross profit as a percentage of net sales decreased from 28.6% in 1993 to 26.2% in 1994. This loss might have been a result of several reasons, such as high administration and selling costs, a negative impact of inventory management, and start up costs associated with certain flavours of the new ¡§Smooth, No Chunks¡¨ ice cream line.

Ben & Jerry¡¦s selling, general and administrative expenses increased approximately 28% to $36.3 million in 1994 from $28.3 million in 1993 and increased as a percentage of net sales to 24.4% in 1994 from 20.2% in 1993. This increase might reflect the increase in marketing and selling expenses and the increase in the company¡¦s administrative infrastructure.

Ben & Jerry¡¦s loss was not solely due to their employee orientated approach, but they appeared to have taken out a vast amount of capital lease in their aim to automate their production to keep up with the intense competition.

As reflected in the balance sheet, Ben & Jerry¡¦s had reinvested huge amounts of property and equipment in 1994 increasing their long-term debts by almost 45% in 1993.

Alternatives available to the consumer now, and in the foreseeable future

Haagen Dazs is currently the main competitor in the concentrated market place for super premium ice cream. Substitutes are however available. There are other ice creams not in the ¡¥super premium¡¦ category. To an extent, these are real competitors. However for the market B&J caters for {the up market 25-40¡¦s with a high disposable income} their strategies should not have a great impact on B&J. The frozen yogurt lines which B&J now provides, has a number of direct competitors to deal with.

Dealing with other substitutes is not tha...