The Russian Ice Cream Industry

The power of buyers in the industry varies at different levels depending on the field. For pharmaceutical drug companies, which have thousands of patients, customers have lower price sensitivity as they are rarely able to refuse the treatments they need and they have low bargaining leverage due to commonly lack of information as well as knowledge on the drugs. For biotech firms that distribute specialized products to the government and hospitals, their customers actually have more of a bargaining power due to being the sole consumer sources

            One reason that could have led the ice cream sale to fluctuate could have been due to Price of Related goods. For example, frozen yogurt is a substitute for ice cream, so when the price increases, more ice cream is demanded. However, hot fudge is a compliment for ice cream, therefore when its price goes up, less ice cream is demanded. Second reason leading for the ice cream sale to fluctuate could be due to income. For normal goods, the higher your income, the more you buy. For inferior goods, the higher your income, the less you buy. Taste is another factor. When taste changes, the quantity demands change.  For example, our taste for ice cream might depend on the weather. Expectations are also an important factor.  Expectations about future income or prices affect the quantity demanded today.

Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.

This is because other dealers in the market will get an opportunity to sell their products in the market. Customers can get products locally with the change. Some suppliers can still get a way of working around the pricing issue to increase their sales.

An interior project called Gelatoria is being developed. To make this successful, it is important to become familiar with the industry not just by knowing the components and ingredients of product but also through familiarity with other factors correlated with the success and survivability in the market. The typical gelato shops in Italy are characterized by its unique atmosphere imitating the European lifestyle. Its homemade frozen desserts are the center of attraction not only for adults but for all consumers of all ages. Gelato is indeed popular in Italy as it is enjoyed by all kinds of consumers (D’amico, Nevstrueva, Guan, Gon, Annini, and Yang 8). This paper aims to provide a discussion of the cultural, economical and social factors that affect the industry of gelato, ice cream, yogurt and other frozen desserts. These factors will provide a deeper understanding why certain products become successful in specific regions and how culturally diverse products could be introduced to other nations.

there are a number of different buyers and sellers in the marketplace. This means that we have competition in the market, which allows price to change in response to changes in supply and demand. Furthermore, for almost every product there are substitutes, so if one product becomes too expensive, a buyer can choose a cheaper substitute instead. In a market with many buyers and sellers, both the consumer and the supplier have equal ability to influence price.

Suppliers have less power because there are a lot of suppliers and they all willing to accommodate and provide discounts for their customers (economies of scale).

There was a dramatic drop in ice cream companies from 1991 to 1992. The output fell to levels last experienced in the early 1970s. Foreign ice cream companies, including Ben & Jerry’s, Baskin & Robbins, Nestle, and Unilever, all poured into to Russian market to capitalize on the open market opportunity. This show Ice-Fili’s technology were same as before that way new competitor enter in Russia as a result.

Ice cream is the most popular dessert in the world. People from different places have their own myths about who invented the ice cream. It is hard to tell where or when exactly it was discovered because there is not a lot of evidence. Some people say the ancient Romans invented ice cream, others says that Marco Polo brought the discovery back to Italy from China. We most likely will never know who first discovered ice-cream or where but it is obvious that it has had a major impact on consumers worldwide. Our fascination with ice cream seems to just get stronger as technology improves. It is a part of almost all cultures in some way, which is not

The change in prices also had an impact on the Italian region’s expected and actual profit because the €7 total sales variance represented an increase of €7 profit for the actual profit. The €7 variance was calculated by the favorable €20 variance for ice cream sales and an unfavorable variance of €13 for specialty sales (€20-€13=€7). This proves that the Italian region can charge slightly more for their ice cream sales given the increase in demand, while the increase in demand of the specialty product could be more attributed to the decrease in price. Overall, the change in pricing came out to make a positive impact on the Italian region’s profit.

The Beijing ice cream industry was made up of standard and premium products. The premium products consisted of 2% that was approximately 700 tonnes and rest was standard products manufactured by low cost producers at lower costs.

The bargaining power of buyers stands in a direct relationship with the bargaining power of suppliers. If the bargaining power of buyers is substantial it increases the opportunity cost of suppliers. The greater the buyers concentration the greater their bargaining power. This bargaining power is also increased in markets where the suppliers’ concentration is high. The bargaining power is also increased when the cost of switching from one supplier to another is low. In instances where backward vertical integration is possible i.e. buyers setting up their own chains of suppliers the bargaining power of the buyer increases in that their prices may become more competitive. In a market where the buyers are more concerned over quality than price their bargaining power decreases as they are less inclined to shop

The paper provides analysis of Ice-Fili, and the paper reveals that Ice-Fili is one of the important ice cream producers in Russia. However, the entrant of foreign ice cream producers such as Nestle has made Ice-Fili to face stiff competitions within the industry. Porter five analysis reveals that Ice-Fili has not been able to compete effectively with foreign companies because the company still relies on imported equipment and technology and traditional method of production, which lead to high cost of production.

According to Market Line a leading business information company, in 2007, the companies with the largest shares in the ice cream business was Unilever, Nestle and General Mills. The breakdown is as follows:

High bargaining power of buyers due to large number of ice-cream suppliers, high customers’ price sensitivity. This could cause buyers to pressure us on lowering selling price or improve quality of products. (Jim Wilkinson, 2013) Furthermore, ice-cream is not a necessity, thus customers have higher price sensitivity than other food. Low income group of consumers, for example students are sensitive towards price of ice-cream, hence they are able to control our price indirectly.