Ice plus dairy company, strategic partnership

Ice plus dairy company, strategic partnership

 

 

Strategic Partnership

Client: Ice plus LLP, Aktobe

Ice Company is a leading milk processing plant in Aktobe Region with a full cycle production “from the farm to the shelf”. The company has involved our Agency for its strategy development due to the production capacity expansion.

Task: The project goal was to boost the company’s competitive position on the local market and increase sales margin. Despite production facilities and significant turnover the company’s profit was insufficient as well as returns on investments.

Having analyzed the market we identified the real market position, actual reasons of the situation and prospects for the future. Being a regional leader the company offered its consumer “the best prices” but harmful for the business.

The analysis showed that the company was short of 10-15% margins on certain products even their quality was superior to the goods of other Kazakh companies and importers in the market.

This shortage resulted from the company’s pricing operated by Production and Accounting Departments (without any marketing) as well as the fear of losing consumers due to price increase.

The market research also revealed the reasons influencing profits and market share although the company deserved more. We have found numerous “trumps”, however, the consumers perceived the company as

  • a local company (Ice plus LLP was established on the basis of the former soviet dairy plant. Whether it be better than the brands sold Kazakhstan wide?)
  • an old acquaintance, aging family member. This fact brought to the decrease of the target audience (mostly it was represented by the women of 35-40+) supported by retro products portfolio and passive communications.

 

Solutions:

Ice Company is the case when there is no need to invent anything. All it needed was selecting a distinct direction from the arsenal of opportunities and following it. Together with our client we prepared a Three Year Strategic Plan including the following:

  1. Усиление торговой команды и развитие дистрибуции в каналах
  2. Company image building with an emphasis on origin, freshness, location;
  3. Consistent product quality and its control;
  4. Gradual price increase for all products and their alignment with the prices of other Kazakhstan producers and importers;
  5. Introduction of company’s brands and product lines in the price segments currently not occupied by the company;
  6. Development of branded retail;
  7. Sales team building and channel distribution development.

Company’s image improvement constituted the foundation for further changings. Ice Company employees were first to become confident in the distinct competitive advantage before the consumers could also do so.  Thus special attention was given to consistent quality assurance.

 

A revised message to consumers “Always fresh milk made by nature” emphasized the benefit of the local origin (always fresh milk) and demonstrated the actual company scale: own farm, its own milk and comprehensive control over all production phases which ensured high quality of the end product.

The company’s modernization has actually begun with new products development.  During two and a half years 7 branded product lines were launched: BioLatta yogurts, BioIce bioyogurt, Nagyz, Slivochnaya Dolina, as well as new ice cream brands Martukskoye, NomNom and Frosta Rica.

In the same time the company raised the prices for its basic products to the market level.  The prices of these products were increased by 12% within the first 12 months. Now Ice Company is the market price leader regarding certain products without any loss in physical output.

With the view of the planned initiatives implementation the Agency selected and recommended 2 employees to enhance Ice Company’s team, i.e., a new Sales Director and Marketing Department Director.

After this project was successfully implemented Ice Company and the Agency entered into a partnership agreement making by this GOOD! Agency actual Ice Company’s Development and Marketing Department. We have been working in this format for more than 2 years.

Partnership results:

GOOD! Agency’s cooperation with Ice Company resulted in the achievement of the shareholder’s goals. Ice company became a dairy industry leader in Aktobe in volumes, in values, in minds.  This gave numerous opportunities for the company’s future development and active expansion in West Kazakhstan.

For the 2 years of cooperation we attained some performance indicators:

  1. 30% sales growth (in volume);
  2. 70% turnover growth (in value).

Our short-term plans include strengthening of the company’s position in ice-cream market and its expansion in West Kazakhstan and Russian neighboring regions.

P.S. It is pleasant to work with the clients whose motivation to launch new initiatives and projects is based on their love of people and country. Now the company produces fresh and healthy goods from 22 tons of farm milk every day. The customers’ choice of Ice company products is founded on their trust, but not on the price.

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