Read and analyze the simple case presented and answer the questions concisely.

Hokey Pokey is Born in India

It was a foggy Monday morning in early February 2008. As Rohan walked into the breakfast cafe of the Leela Hotel in Bangalore, he was deep in thought about the email he had just received from his boss back in the United States. He had been inBangalore, Indiaforaweekandwasconductingduediligenceforaninvestmentinarecyclingfactory in the outskirts of town. He gazed at the email on his laptop. The email and an attached report were from Raj, The Ross Group's Chief Operating Ofcer and Rohan's boss: "Please pack up and get on the next ight toMumbai."

To: Rohan From: Raj

Subject: Hokey Pokey ice cream

Asaprivateinvestmentgroup,youknowthatwehavebeenactivelylookingtopick upastakeintheIndianFood&Beverage(F&B)sector.Iwentthroughtheresearchreport on the Indian F&B sector compiled by our colleagues in Mumbai. The team hadalso analyzedabusinessplanbyalocalIndianChef'snewstart-upcompanythatwouldfocus on opening up ice cream parlors all over the nation. The goal is to establish outlets throughout a metropolitan city and then rapidly expand all over India. I seethis as a valuableopportunitytoenterthissegment.I'msurethisopportunitytoenterintotheF&B sector would not only provide an excellent ROI possibility, but also enable us to diversify into the other product categories within the F&B sector. As of now, the recycling project inBangalorehasbeenputonhold.PleasepackupandgetonthenextighttoMumbai. I'll expect a memo with concrete suggestions within aweek.

Even in his previous job, Rohan had always wanted to see how new products are developed and launched. With The Ross Group being one of the leading private equity rms in India, and with operations across several countries, he got hooked onto this challengeasheknewthiswouldbeagoodcanvastoseehowthingswork.However,he didn'tknowwheretogetstartedfrom.Hethenturnedhisattentiontotheattachedreport.

Food & Beverage Industry Background

The Indian Food & Beverage sector is an estimated Rs.4.66 trillion market (US$105 billion), of which the ice cream industry is an estimated Rs. 22 billion market (US$500 million) growing at a rate of 12 percent since 2001. Ice cream consumption in India is much lower than other countries with a yearly per capita consumption of 0.12 liters.However,themajorityofgrowthisattributedtoanemergingmiddleclassequipped with spending power. The industry is divided into an unorganized and organized sector with 50 percent attributed to each. Within the industry, there are two types of models, wholesaleboxedandparlorretail,ofwhichwholesaleboxedmakesupthemajorityofthe organized sector. Amul, Kwality, and Vadilal are the three brands that dominate the fragmented wholesale boxed sector, which has yet to see an international player successfully enter. The parlor retail model is divided amongst neighborhood parlors like Bachelor's ice cream in Mumbai, comprising the unorganized sector and international chainssuchasBaskinRobbins.Pricingintheparlorretailmodelvariesdrasticallyasthe unorganized parlors tend to price their product at a very cheap price due to lower quality in the range of 10-15 Rupees. On the other end of the spectrum, offering higher priced items due to better quality are gelato parlors, some of which are organized chains, and BaskinRobbins.Initially,whenBaskinRobbinsenteredthemarketplace,theirpricepoint was averaging 80 Rupees. However, due to lack of success, they have revamped their pricing structure to now average 55Rupees.

Key Product Attributes

Product quality was a key focus and the goal was to make super premium ice creamlocally.Icecreamqualityisprimarilycharacterizedbythepercentageoffatcontent and percentage of overrun that exists. Overrun is dened as the amount of air that is trapped within the ice cream during the production process. When more air is trapped, there is more overrun and the quality of ice cream is lower. The four main categories of ice cream quality are economy, standard, premium, and super-premium. Economy brands tend to have minimal fat content, in the range of 8-12 percent fat, and very high overrun (larger amount of trapped air), around 120 percent. On the other end, super premiumbrandshaveaveragefatcontentintherange of15-18percent andoverrunthat ranges from 25-40percent.

The Business Plan

The businessplanstated thattherewasgreatpotentialforgrowthintheIndia nice cream industry, specically in retail parlor outlets. The USP (unique selling proposition) wastoofferhighgradesuperpremium icecreaminadistinct fashionfromthewayithad been traditionally served in the country. The ice cream would be mixed at the parlors on a frozen stone with mix-ins (assortments of nuts, candy bars, cookies, brownies, fudge, etc.) and customers would have the option to design their own creations. This concept had seen success in international markets such as the United States and even other countries with similar spending habits, such as the United Arab Emirates andSingapore. Additionally,theconceptwouldbeservedinanewage"lounge-like"atmosphere.During therecentgrowth intheeconomy,Indianconsumershavespentmoreoftheir disposable income towards eating out than ever before. "Lifestyle concept" eateries such as coffee shops were gaining in popularity and catered to the new emerging middle class. The business planfocusedoncreatinglifestyleparlorswhereafamilyorgroupofyoungadults could "hang-out." This type of lifestyle parlor did not exist in a multi-chainformat.

The Product Launch

The business plan called for the parlors to launch in Mumbai and then rollout to the rest of the country. As part of a brand building exercise, the cosmopolitan city of Mumbai was chosen due to its signicance as the source of trendy and high quality productsinIndia.Manybrandsarevieweduponasfavorablewhentheyhavesuccessin Mumbai. Therefore, it was imperative that the brand be "born" in Mumbai. Hokey Pokey was selected by the Chef in a brief survey he did with industry peers. He came up with a list of numerous names and asked his network of associates within the F&B sector to vote. The winner was "Hokey Pokey," inspired by a slang term used in several areas of the United States and parts of Great Britain in the 19th and early-to-mid 20th centuries, to describe ice cream sold by street vendors. Ice cream street vendors were colloquially referred to as "Hokey Pokey Men." As Rohan sat wondering about the efcacy of the business plan, a lot of questions emerged. For his memo to Raj he knew he needed answers to the followingquestions

Questions for discussions:

1. Is there a market for ice cream in India? How can the market be identified for a combined product lifestyle and ice cream? Is the industry growthviable?
2. Whatisthecurrent competitionintheIndianicecreamindustry?Isthisanindustry that can bepenetrated?
3. Is Hokey Pokey a good brand name for this venture? Is the Chef's process of selecting the brand name correct? What other product names can you suggest to Raj?

Source: Chapter 23 of e-book: Marketing Research 11^th edition by David A. Aaker et. al.