Situation Analysis for Dairy Queen
Characterised by the hot weather all year round and the huge number of visitors, the number of food stores held by Dairy Queen and the extent of advertising in the state is quite low. The four stores in Miami are not sufficient to meet the high demand of ice cream and to provide substantial competition to local vendors. In addition to the shortage of vending stores in Miami, DQ has a weak hand in advertising the brand in the state. The marketing and advertising models used by the company are ineffective in terms of coverage and catchy content to draw the attention of existing and potential customers.
Dairy Queen has threat of substitute from the loose milk and Gawalla market(shops who sell fresh open milk).There are many fresh milk shops and other milk that are available locally like in the streets of residential areas,markets and shopping malls.centers in the market. So the threat of substitutes is high because there is high inflation and recession in the Pakistan economy. So if the price of Dairy Queen milk increase then the customer will shift easily to the loose milk or other product. which is cheap in price. Dairy Queen face a low cost in buying the fresh milk because it buy fresh milk in huge volume and it has a good supplier system which reduce the power of the supplier so their switching cost is not so much high. Dairy Queen collected is using two ways to collect the fresh milk from the suppliers one is self collection and the second one is contract collection. In the recent time with the increase of electronic and print media ,awareness in customers have increases and now customers are aware what they are going to purchase and what are other products /brands are available almost at the same price,also people becomes health conscious.This ultimately affects any company sales and increase buyer power. The main economic factor acting for this industry is uneducated suppliers of raw material, so lots of raw material is affected in terms of its quality and preservation issues and a big percentage of raw materials go to waste before its being processed. But at the same time UHT milk doesn’t have any kind of taxes on it which makes it a good economic factor for the industry growth and improvements in its production. As UHT milk is a bit costly than the ordinary milk or non processed milk so income factor of consumer is always an important economical factor for the industry players. UHT milk industry carry consumers from middle and lower class and income level for this class has increased over time which is something in favor for the industry.
They should use promotional pricing: this makes use of technical price reductions discounts, pay later, special offers, and vouchers. Pricing based on the product purchase quantities. For instance, the organization could provide quantity discounts for large-scale purchase of the product. The strategy encourages large-scale purchase of the products of the company hence an increase in the revenue realized (Ferrel, 2008). Dairy queen is in Minneapolis. It develops licenses and services. Dairy queen introduced blizzard in 1985. Blizzard is used during summer due to its coldness. It includes flavors such as Oreo cookies, mint Oreo, chocolate chip cookie dough, and seasonal flavors such as pompkin pie. It has been facing challenges such as customer dissatisfaction of their products and services, unavailability of their products whenever the customers need them and inability to match the price and the quality. Daily queen has to analyze and change its pricing and distribution strategy to suit customer needs and expectations (Measured up, 2011). Effective pricing as a marketing strategy can be combined by other strategies in order to create a competitive advantage in marketing (West, 2010). Pricing strategy is a process of finding optimum price levels by considering the overall objectives, consumer demand, product attributes, competitors’ price, and macroeconomic trends while distribution strategy is the coordination of products to the target market. It is the structures for distribution channels, patterns for the design, choices of distributors, and the factors affecting the choice and management of the channels of distribution (Kaminsky, 2003).
For the most part, the motive of DQ Fan Club is to create loyalty customer through maintain the relationship. According to Melcooper.com (2007) it status, building a fan club is a CRM strategies to gain customer loyalty. If want to build a customer base that is exceptionally loyal even fanatical about your store then have to give customers reasons to become fans. Make fans out of customers is to offer them an opportunity to enjoy exclusive benefits at your store in exchange for their loyal patronage. For example, DQ Fan Club they offer to every fan members on few exclusive treatments; a buy one get one free blizzard treat coupon for sign up, monthly inbox treat with the blizzard of the month and more, and an extra-special coupon on birthday and surprise on anniversary to gain the customer loyalty and maintain the relationship.
Ferrel, O. (2008). Marketing strategy. New York, NY: Cengage Learning.
Kaminsky, P. (2003). Designing and managing the supply chain: concepts, strategies, and case studies. New York, NY: McGraw Hill Professional.
West, D. (2010). Strategic marketing: creating competitive advantage. New York, NY: Oxford University Press.