Marble Slab Case Analysis
EXECUTIVE SUMMARY Company: Marble Slab is a company that is famous for making fresh ice cream. It sells its premium prestige ice cream that is made daily with unique toppings. The unique thing about Marble Slab is the customers’ ability to completely customize their ice cream the way that they want to eat it.
Instead of having a predetermined flavour, customers are able to mix their flavours of ice cream that they please and put a numerous amount of toppings on them that include Bananas, Strawberries, Bread crumbs etc. They call this Mixins. All of this is done on a giant ice cold marble slab.
Marble Slab wishes to give customers a unique experience with a prestigious brand of ice cream. Marble Slab Creamery Inc. was founded in Houston, Texas in 1983. It was independently owned by franchisees across the United States until 2003 when Canadians were granted permission to have franchisees in Canada. In 2007, Marble Slab creamery Inc. was purchased by NexCen Brands Inc. Although NexCen owned Marble Slab they played a small role in the daily operations of their locations. Marble Slab has become one of the fastest growing quick serve restaurants with almost 400 locations worldwide.
Product: Besides premium ice cream that is made daily, Marble Slab also sells sundaes, milkshakes, ice cream cakes, frozen yogurt and more. Since the ice cream is made fresh at the location it can last up to 30 days. Every location had an offering of 21 different flavours and an endless amount of mixins. And the prices of the products were the same across any of the locations. Price: The prices of Marble Slabs products vary from as low as $4. 95 for an ice cream cone with 1 mixin to a Slab cake for $54. 95 and everything in between.
They do have things that are cheaper than the cone with 1 mixin such as brownies, apple pie slices, and even a charge for extra mixins, all of which are under $3. 00. Event catering for an event of at least 200 people will need 2 employees at a cost of $12 per hour, as well as the cost of supplies and the ice cream itself. Place: There are approximately 400 Marble Slab locations worldwide. With many locations in major Urban and Suburban areas throughout Canada and the United States With a potential location in Vaughn, Toronto Annex Area, the Beaches, or Oakville.
Promotion: Potential promotional ads in the Toronto Star, Now Magazine Toronto, Pattison Outdoor and on 104. 5 Chum FM. CURRENT MARKET ENVIRONMENT MICRO ENVIRONMENT Industry: Trends: The biggest trend in the ice cream industry as of right now is that most consumers are switching over to a more premium and more expensive ice cream products. An example of this would be the Magnum bar that comes from chocolate imported from Belgium, which has become very popular because of their marketing campaign.
Things such as TV Commercials and celebrity endorsements are the reasons for the success of that product. The popularity of impulse ice cream has been decreasing steadily since 2007. The reason for this is that people are becoming more health conscience and are not interested in that type of ice cream anymore. Organic ice creams are becoming very popular. People are interested in natural flavors with no artificial colours added. People like the act that these products are not genetically enhanced in any way because, as stated before, people are more health conscious.
Chocolate, Vanilla, and Strawberry flavours are still the most popular flavours of ice cream. But this does not mean that consumers are not willing to try new flavours. New flavours are still being created because they are still successful. Competition: Direct: Cold Stone- Cold Stone is pretty much an exact replica of Marble Slab. They offer a premium ice cream with complete customization. They even prepare it on a frozen granite stone. Created over 20 years ago and with over 1,400 stores it is easily one of Marble Slabs direct competitor.
Baskin Robins- Baskin Robins is the largest ice cream company in the world. In Canada it has the largest share-of-mind. They serve ice cream, milkshakes, cakes and other products. They are well known for their 31 original flavours and their ice cream is known to be of good quality. A Baskin Robins can be found anywhere from malls to stand alone buildings. It has a large amount of financial resources and is priced similarly to Marble Slab. Dairy Queen- Dairy Queen is mostly known for its famous “Blizzard” It also serves ice cream and milkshakes and cakes.
But it also sells Hamburgers, Hotdogs, and Sandwiches. Dairy queen also has a similar mixins concept that Marble Slap has but at a cheaper price. They also target children with children friendly food options. Indirect: McDonalds- McDonalds is the biggest restaurant chain in the world. McDonalds has a food chain in over 120 countries. They are primarily known for selling Hamburgers and fries but also have ice cream. The most famous of their ice cream meals being the “McFlurry” Milkshake. McDonalds is a power house and is unstoppable when it comes to promotion of their products.
They excel in quick serve food and are definitely the leaders in the food market. A positive for Marble Slab is the fact that McDonalds isn’t really popular for its ice cream products and does not have the share-of-mind for that product. Starbucks- Starbucks is known for selling their premium coffee and tea products. Another thing that they do well is sell a comfortable environment. It’s a good place for people to hang out and socialize with friends and family. However they do not have a very large menu and mainly specialize in customized drinks.
They also have a niche market and do not cater to children. Convenience Stores- There is convenience and grocery stores everywhere that have access to ice cream. It’s quick and easy to get ice cream at these places and they also have almost every other food choice. They can also choose to discount prices on items. They are good for bargains. Baskin Robins has the Market share of ice cream restaurants. What they and Marble Slab have in common is that they have the same target market. Marble Slab is more prestigious and expensive. It also has more of a sit down restaurant feel to it.
What Marble Slab has done better in terms of its competition is: * Greater share-of-mind than McDonalds * Caters to a bigger demographic than Starbucks, and Dairy Queen * Selling an original product * Having an original mixins concept * Offering a unique experience with the food being prepared on a frozen marble slab What Marble Slab has done that is weaker than their competition is: * Not as popular as Baskin Robins or McDonalds * More Prestigious product means it will be more expensive * Don’t have the marketing power or financial resources as their competition
Consumer: | Families| Young Adults| Women| Demographic| -A Family with children who are under the age of 15| -Young Adults aged 15- 24| -Women aged 15- 50| Geographic| -Primarily in Urban and Suburban areas| -Primarily in Urban and Suburban areas| -Primarily in Urban and Suburban areas| Psychological| -Parents who are often engaged in family activities- Looking for good quality ice cream. | – People who have their own disposable income -PT, FT, or summer employment| -Health conscious-The primary food purchasers in the household. Do a lot of food decisions in and out of the house| Behavioural| -Those who enjoy ice cream as a treat and would go to Marble Slab to fulfill their need for ice cream| -Looking for social interaction-Impulsive-Limited family obligation| -Looking for some place fast and easy to get a snack -Impulsive| Suppliers & Marketing Intermediaries: They get their supply from dairy farmers. Dairy can be quite expensive in the off season. They get most of their fruits and vegetables from farms as well. Also products such as cheese get purchased from factories.
All marble Slabs are individually owned so they all have their own means as to where they get their supply. It may vary slightly from location to location. Products from the factories and the farms get purchased then they will be supplied to each of the Marble Slabs. MACRO ENVIRONMENT Macro-environment factors are the major external and uncontrollable factors that influence an organization’s decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political and social conditions; technological changes; and natural forces.
Technological: Technology is another aspect of the environment a firm should consider in developing strategic plans. Changing technology may affect the demand for a firm’s products and services, its production processes, and raw materials. Technological changes may create new opportunities for the firm, or threaten the survival of a product, firm, or industry. Technological innovation continues to move at an increasingly rapid rate. The technological aspects of Marble Slab include the technology utilized to create and produce frozen dessert products such as ice cream, frozen yogurt, and milkshakes.
Additionally, a new technological trend can be found in companies Investing in ways to create the same sweet taste of frozen desserts, but with less saturated fats and processed sugars. Demographic: Socioeconomic characteristics of a population expressed statistically, such as age, sex, education level, income level, marital status, occupation, religion, birth rate, death rate, average size of a family, average age at marriage. A census is a collection of the demographic factors associated with every member of a population.
Income level of the cities where Thomas is looking to start the business are highly populated and people have pretty high level of income. The age groups of young adults 15-24 are in the range of 2000-35,000. Economic: Economic factors refer to the character and direction of the economic system within which the firm operates. Economic factors include the balance of payments, the state of the business cycle, the distribution of income within the population, and governmental monetary and fiscal policies. The impact of economic factors may also differ between industries.
The economic downturn of 2008 is still a heavy factor in the minds of Canadian consumers. Although conditions have improved in the last few years, Canadians still show some amount of concern financially. This concern materializes into apprehension for luxury and treat items such as ice cream. This raises a slight risk for Marble Slab especially because of their super premium ingredient, and luxury status. Another economical macro environmental factor is the ice cream industry’s exponential influence from the wide fluctuation of dairy market prices.
The price of commodities such as cocoa and sugar also vary depending on supply and demand. This plays a direct role in the amount spent on goods. Social/Cultural: The sociocultural dimensions of the environment consist of customs, lifestyles, and values that characterize the society in which the firm operates. Socio-cultural components of the environment influence the ability of the firm to obtain resources, make its goods and services, and function within the society. Sociocultural factors include anything within the context of society that has the potential to affect an organization.
Population demographics, rising educational levels, norms and values, and attitudes toward social responsibility are examples of sociocultural variables. One of the social aspects discussed in the Marble Slab case study is the rise of the “healthy-eating” trend. The increased rate of obesity in North America is one of the leading factors in the occurrence of this social trend. This poses a threat to Marble Slab because ice cream is a frozen dessert treat high in calories. This however is combated by Marble Slab’s addition of fat-free frozen yogurt.
Ice cream is considered to be a social event in our culture, and the fact that ice cream establishments offer a social environment is a leading factor in why the market holds so much potential for young adults and families with children. Political/legal: The political-legal dimension of the general environment also affects business activity. The philosophy of the political parties in power influences business practices. The legal environment serves to define what organizations can and cannot do at a particular point in time.
One of those most important political factors in the assessment of the macro environmental factors of Marble Slab lies within the Harmonized Sales tax policy (HST) that has replaced the Provincial Sales Tax (PST) since July of 2010. The combination of the PST as well as the Goods and Services Tax (GST) indicates a slight raise in the overall cost of goods and services. This is an important political factor for a retail store like Marble Slab Creamery, because consumers will find a noticeable increase of tax.
This raises a slight risk they will be discouraged from visiting luxury or treat stores like an ice cream establishment. Natural environment: An identifiable element in the physical, cultural, demographic, economic, political, regulatory, or technological environment that affects the survival, operations, and growth of an organization. Winter Weather in Canada can affect the business. People try to ignore eating cold products in winter. SWOT ANALYSIS Strengths: * Make Fresh Ice Cream Daily * High Quality Ingredients * Customizable Product 21 Flavour of Ice Cream * Fat Free * Greater share-of-mind than McDonalds * Caters to a bigger demographic than Starbucks, and Dairy Queen * Selling an original product * Having an original mixins concept * Offering a unique experience with the food being prepared on a frozen marble slab Weaknesses: * Not as popular as Baskin Robins or McDonalds * More Prestigious product means it will be more expensive * Don’t have the marketing power or financial resources as their competition * Not as many locations as competition Not as many flavours as other places like Baskin Robins (32 Flavours) * Not too convenient or those who want fast ice cream * Lots of Substitutes in Market Opportunities: * Can start to sell their ice cream at Convenience and Grocery stores * Have a take home section, sort of like a drive through * Use Social Media to Advertise * Create more flavours * Increase number of locations * Expanding to other countries * Appealing to price sensitive customers Expand menu so that there are more products than just ice cream (Coffee or Hamburgers. Ex. Dairy Cream, McDonalds) * Focus on Catering because it can be a great asset if done well * Trent towards healthy eating gives fat-free yogurt sales a boost * Children see ice cream as a treat, and encourage parents to choose an ice cream establishment as a family activity * The lucrative young adults (15-24) market are inclined to visit and ice cream establishment due to its social environment and low cost
Threats: * Recession * Other companies who want to become more involved with ice cream products * Brand Loyalty to other ice cream companies * Dominant Retailers can sell ice cream for a lot less * Intense competition from other frozen dessert chains and grocers * Indirect competition from convenience and grocery stores * The dairy industry has a wide fluctuation rate, which directly affects goods prices * Canadians are concerned about the dip in the American economy. Other competitors such as Baskin Robins and Cold Stones have the financial resources to generate strong promotion, and can keep their prices on par with Marble Slab * Other competitors have products similar to Marble Slab’s “mixins”, such as Dairy Queen’s “Blizzard” or McDonalds “McFlurry” * Other food establishments have the advantage of supplying their products through grocers Problem and Issue Analysis The major issue is deciding the location, because all the expenses related to promotion and pricing decision depend on the location.
Some locations have different financing and leasing whereas others have target market issue. Every single decision to be made depends on the location where Thomas would like to start the business. Marketing Objectives Marble Slabs Marketing objectives are: -To have a successful promotional plan for the grand opening of the store and meeting the revenue goal of $400,000 in the first year. -To have promotional costs of $10,000 for the grand opening. -To have a 20% ROI on our catering events every year. Marketing Strategies
Location is defined as the major problem as every single thing related for operations depends on location. Looking over the census information for the locations, Oakville is the most suitable option, the reasons are as follows: – 1- Median household income is the highest for Oakville 2- There are considerable amount of target market in Oakville 3- Located near the lake, could be considered as picnic spot 4- There is little direct competition Purchasing power is the most important, because if the consumer has low disposable income then they won’t have that curiosity to spend.
Oakville has the highest median income. 13,245 young adults live in Oakville. Ample of target market are present in Oakville, Thomas should work on 80 20 rule, where 20% of consumer make 80% of the revenue. There is little direct competition; this gives Thomas to act as the market leader in Oakville. There is some indirect competition from the grocery stores but that won’t affect the sale to a major extent. Thomas has to introduce fat free ice cream, because most of the consumers are health conscious.
To achieve the objectives Thomas has to try as hard as possible to stay on the budget. There are a lot of expenses that come with the opening of a business. She must concentrate her time and money on the proper advertisement. I think one of her best bets in that situation would be to have a commercial on 104. 5 Chum FM during driving time because I believe that that will reach the most people. Also if she is to go into catering I believe that the best option for her to use is the portable slab option. It caters to the most people and the whole Marble Slap experience to the customers