Baskin-Robbins is among the world’s largest and greatest chains of ice cream. It was founded in 1945 by Burt Baskin and Irv Robbins in California. The ice cream restaurant is mostly known throughout the world for their 31 flavors slogan. The idea behind this slogan is that a customer can enjoy at least 1 new flavor every day of the month. The company until now has introduced more than 1000 flavors globally.Baskin Robbins has finally opened its doors to Pakistan and had signed a master licensing agreement with a local company, AHG Flavors Pvt Ltd. Baskin-Robbins has initially targeted Lahore & Karachi to start its operations and is intending to cater rest of the metro cities of Pakistan in near future. In Pakistan, quite a few restaurants had been selling ice creams in the name of Baskin Robbins, but nearly all of them were not the original product. In order to grow economically and gaining fame among public, Baskin-Robbins needs to be very vigilant and cautious in setting its pricing strategies, as there are numerous ice-cream brands operating in Pakistan and catering the need of every social class.
Point of discussion:
After reading the above case, which new-product pricing strategy do you think “Baskin-Robbins” should employ to increase its sales; should it be “Market-Penetration Pricing Strategy”or “Market-Skimming Pricing Strategy”? Support your discussion with logical arguments.
In the above case Market-Penetration Pricing Strategy will used.
- high volume of sales and deep market penetration of a new product
- the product does not have an identifiable price-market segment,
- it has elasticity of demand (buyers are price sensitive),
- the market is large enough to sustain relatively low profit margins
The competitors too will soon lower their prices.
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