The 3rs Ice Cream

A week before, I was invited by a very good friend of mine to his hometown. He had started an Ice Cream Company in his hometown where he produced as well as sold the Ice cream through a shop attached to the production facility. As I am a MBA marketing student, the friend asked me to help him in marketing the Ice Cream. I was more than happy to help as it was a great learning opportunity for me given the first hand experience. 
                 First we started preparing for the inauguration of the shop which was scheduled in the evening. A lot of work was done like setting up the shop, flex printing, arrangements for guests, arranging waiters for the inauguration, etc. Once these things were done we started for the marketing trip we were thinking of. The basic objective of the trip was to cover few  villages around and getting some orders for the ice cream. In the hot sunny day we reached the first village which was around 20km away. There we first met with a travel cum ice cream dealer. This was the second  time we were visiting him as my friend had already supplied him some sample ice cream to sell. The meeting was very casual. The dealer demanded for 10 more boxes of the ice cream and purchased them without any hesitation. I was pretty confused by such behavior of the dealer as he was also dealing in other leading ice cream brands and here he was giving orders of a new brand which still didn't had it's name of the cups. Yes, the cups were plain and transparent. I was pretty much curious about the behavior but was distracted by the work lying ahead. We had to cover many such dealers before heading back home for the inauguration. 
                  Then we went on to meet our next dealer. As we told him about our ice cream,the first question he threw at as was "How much margin will you give me?". My friend said 4rs over 10rs of MRP. I did the calculations and its was freaking 40% margin to the dealer. He was more than happy to keep the ice cream as the leading brands were offering him just 30% margin. Then it all came to me. It was all margin game, higher the margin, harder the dealer tries to sell it. 
              This margin thing made me curious about what my friend was earning. So, I asked him. The numbers he told me were that the cup of ice cream cost him 3.15 , he sold it to the dealer at 6.20 and the dealer further sold it at 10. Astonishing, right !! How a 3.15 rupee so easily gets to 10. This margin is pretty frustrating as the thing which was produced in 3.15, we are paying 10 for it. Since then I had this thought in my mind. Not just ice cream this happens with all the retail products. Higher the retail price, higher goes the margin and more are we charged for the availability of product rather than the product itself.
                   The thought of price growing exponentially with each person on the supply chain is very taunting. Everyone has their fair share of greed which adds up to a big ball of price. I know these things are complex and may have a very logical answer but for now I can't believe that I am paying 10rs for a 3rs Ice Cream. This small fact shows how distant have this world became. Earning profits more than required, encouraging greed more than we can handle, paying for more than what we need.....It's just all sad when you know what happens behind the curtain.




Comments

Unknown said…
Congrats on the first attempt, and the content is also very valid.
November 27, 2015 at 7:18 AM
Pratik Rajurkar said…
Thanks manoj!! Wrote it sometime back.
November 27, 2015 at 12:24 PM
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