Dippin Dots Analysis
Dippin Dots AnalysisCase Study 34: Dippin’ Dots
Dippin’ Dots, “Ice Cream of the Future,” has been around for nearly 25 years. The company has had some major obstacles to overcome throughout the years. When Dippin’ Dots first launched, it truly stood behind its name, “Ice Cream of the Future.” The founder of Dippin’ Dots came up with a process known as flash freeze liquid cream. He was able to reinvent a product that people of all ages had either heard of or tried. The strategies used were, developing “futuristic” ice cream, targeting people ages 8 to 18, continuing to grow the company by use of franchises and selling the product through amusement parks, fairs, malls and the use of vending machines. He used celebrities to promote product, tried a joint venture with McDonald’s, and introduced healthier options to be able to target selling product in schools.
The threat of new entrants is high due to loss of patent; competition along with disenfranchised former employees can copy the product. Power of suppliers is high due to special equipment needed to store product in addition to storing with dry ice. International shipping was also difficult due to equipment needed to store and ship product. The buyer power is low due to locations where Dippin’ Dots are sold are places in where consumers typically spend more money. Therefore the 5 oz cup for $5.00 is not an over-priced product. Consumers realize in these environments they are going to pay more for a product than in a grocery store. The threat of substitutes is high because of the many different types of frozen desserts-various types of ice cream, sherbet, sorbet, ice cream sandwiches/bars, frozen custard and gelato. Consumers can also purchase different frozen desserts in grocery stores, where Dippin’ Dots are not available. There are already substitutes to the company. The intensity of rivalry is high due to imitation of Dippin’ Dots, large...