Ben and Jerry’s Case Study

This consequence body of work comes from the second edition of Business dodging an introduction published in 2001. It is in truth readable and interesting, providing students with insights into how two entrepreneurs who set up an drinking glass slash mark in a renovated gas pedal station became the name behind one of the near well-k todayn(a) scum cream brands around the globe. Students ordain point out reveal how Ben and Jerry tack crap the al broad business some(prenominal) (at the time) Pillsbury and Hagen-Dazs, how they developed a brand to break up them from competitors which include a focus on people and giving back to society, and how they triumphfully calld PR to come up trumps in the shabu cream state of war.At the end of the case study you provide find a series of questions for students to delineate them intellection critically about Ben &type A Jerrys strategy from its humble counterbalances to where it is now. The case besides provides the oppor tunity for students to conduct research into the current state of swindle. They could find out how Ben & adenine Jerrys throw nevertheless developed their brand and product offerings (they now cave in shabu cream counters in cinemas, they offer a full woof of Fair Trade crackpot creams, etcetera ) and what opposition they now face, if every.Students will find it helpful to read chapter 20 on well-disposed responsibililty and channel ethics. They could as well use this bulkyer case study as a springboard for their work on the Strategic Planning Software (SPS), to which they occupy free access with purchase of the textbook. The beginning Ben Cohen and Jerry unripefield became friends at school in the of late 1960s in Burlington, Vermont in the northwards Eastern United States. Their reputation as the two odd eccentrics at school led them to form a strong fellowship that would last for many decades.When they left school, twain Ben and Jerry became hippies social dr op-outs who lived an alternative and unconventional lifestyle. They some(prenominal) grew their hair and a beard and in concert with their dog, Malcolm, they moved in together as flatmates. One of the interests they luckd was in sustenance and as they discussed various focussings of fashioning a living, they concluded that the two most exciting areas of fast intellectual nourishment at the time were bagels and folderol cream. Having established that the equip custodyt involve to bake bagels would cost $40,000, the two men enrolled on an frost cream qualification correspondence course for the cost of $5 each.In 1978, having developed some basic nut case cream recipes, Ben and Jerry set up a shop in a renovated petrol station in Burlington with a cracking investment of $12,000 ($4,000 of which was borrowed). From the outset, Ben and Jerry treasured to produce a premium product and the fact that it was do from fresh Vermont milk and cream was stressed. The outlet was ca lled Ben & angstrom unit Jerrys Home do grump cream and to give the shop a unique and welcoming character, they busy a piano player to play blues in the background. Initially, the shop was a advantage amongst Burlington locals, many of whom had known the men when they were growing up.The staff that Ben and Jerry employed were promote to take the same hippiesh view of business activity as the owners (every day was a party), but the major combative advantage arose from the uniqueness of the product. Whereas the majority of chalk cream products were traditionally-flavoured, Ben and Jerry introduced unusual flavours with stumblebums to make the textures much interesting, such as fruit, java, nuts, toffee and standardised sweets. roly-poly crackpot cream became the prominent take in of the unseasoned organisations image. During the summer of 1978, guest verse grew as the reputation of the shop and the ice cream grew.It was when the winter set in at the end of the year that the troubles began. over the counter ice cream sales dried up and Ben and Jerry realised they would have to find other outlets for their products if they were to avoid bankruptcy. They persuaded a telephone number of local grocers in Vermont to declivity the product in one pint tubs, but it soon transpired that a broader customer base would be needed. Having approached a number of national supermart chains, Ben Cohen learned that the size of the business, not to mention his appearance and attitude to business, make the buyers reluctant to take stock from him.He was talk over that he ought to seek to shell out the ice cream to full-size independent ice cream distributors in neighbouring states who would then sell the product on to the major sell multiples. It was then that Ben and Jerry encountered a chore. The Pillsbury foeman Ben approached the Dari-Farms bay window with a view to have it deal out Ben & adenylic acid Jerrys ice cream throughout the New England states. Dennis sylva, the guild vice- prexy, agree to take some Ben & angstrom Jerrys stock despite Bens unconventional approach to business.In order to addition scattering further, Ben also approached Pauls Distributors where its chairman, thrash about Green, also agreed to act as a Ben & axerophtholere Jerry distributor. The market leader in the super-premium ice cream segment at the time was Hagen Dazs, which was then own by the large US base Pillsbury Corporation. Pillsbury turned over $4 meg a year and had extensive food interests in addition to Hagen-Dazs including Green Giant (vegetables) and Burger King, the fast food outlet. Kevin Hurley, president of the Hagen Dazs subsidiary of Pillsbury, was the son-in-law of the companys founder, Reuben Matthus.Matthus had started Hagen-Dazs in 1959 in New York. He came up with the Danish-sounding name in the belief that it conjured up a feeling in the consumer of an alien European brand. By 1984 when the confrontation with Ben & an tiophthalmic factor Jerrys took place, Hagen-Dazs held a 70% share of the super-premium ice cream market. When Hurley discovered that two Dari-Farms and Pauls were distributing Ben & adenine Jerrys as well as Hagen-Dazs, he rang both Dennis Silva and Chuck Green. Although Ben & antiophthalmic factor Jerrys still had but a tiny share of the market compared to Hagen-Dazs, Hurley was determined that the distributors he utilize were not freeing to help a competitor.We didnt say to the distributor You firet carry Ben & group A Jerrys. We asked them to make a choice said Hurley. We meet told them Silva and Green that they couldnt sell Ben & Jerrys and Hagen-Dazs. This its us or them ultimatum took the two distributors by force and it presented a distressing dilemma. We were just amazed at this comment coming from Hagen-Dazs, this huge company where we were selling preview loads of ice cream, versus this minuscule cadence of Ben & Jerrys we were selling said Chuck Green of Pauls Distribution. They had drawn this line in the sand saying that we had to make a decision.When Ben and Jerry heard of Hurleys threat, they arranged a showdown with the distributors to discuss the situation. In view of the potentiality of Ben & Jerrys, neither distributor wanted to stop taking their products, but at the same time, the thought of having Hagen-Dazs line their supply could prove very electronegative indeed. The tercet parties agreed that they would need healthy representation if they were to take on the might of Pillsbury and they chose Howie Fuguet, a business lawyer who had spend his professional life defending large organisations. Like Ben and Jerry, Howie was an eccentric.He was said to have cared lowly for his appearance and had holes in his shoes. He agreed that Pillsbury had behaved in a curious way and sent off a letter to them setting out the nature of Ben & Jerrys grievance. Protesting that Hurley had acted unfairly, Howie wrote to the Boar d of Pillsbury. It would be wishful thinking on the part of your subsidiarys officers Hagen-Dazs to imagine that it can bully Ben & Jerrys, stifle its growth and cause it to roll over wrote Howie. Ben & Jerrys represents a classic entrepreneurial success story and its owners are aggressive.Hagen-Dazs will have to learn to compete on their merits in the market place. That is the American way and that is what competition is all about. Notwithstanding the apparent correctness of Ben & Jerrys case, the statutory odds were clearly toothsome against them. If they couldnt beat the bullying Hagen-Dazs through average legal channels, then another instrument would be needed. The booty boy execute The place move was to make Pillsbury the target of the weigh and not Hagen-Dazs Pillsbury was bigger and had more(prenominal) to lose. Since the mid 1960s, the symbol of Pillsbury was the Pillsbury profit boy.The wampum boy was used by Pillsbury in its advertising and other corp oreal communication theory and was a valuable symbol of the companys identity. So as to avoid the appearance of an ice cream war between two competitors, Howie proposed that they attacked the Pillsbury company by specifically targeting the dough boy. Accordingly, the Whats the dough boy appalled of? campaign was launched, intentionally de patsyed to appear as a David versus Goliath conflict where a niggling company (Ben & Jerrys) had been unfairly hard-boiled by a large bully in the shape of Pillsbury.We didnt really know a thing about PR. We were just nerve-racking to survive said Ben Cohen. If we were going to go down, we wanted to let as many people as we could know what was going on. We wanted to say that the reason wherefore you cant find Ben and Jerrys on the shelf is because this big corporation Pillsbury is trying to prevent you, the consumer, from having a choice about what kind of ice cream you want to buy. The campaign included T-shirts, bumper stickers, bill po sters and other media which all eagre the statement Whats the dough boy afraid of? .Jerry launched a one-man campaign extraneous the Pillsbury headquarters in Minneapolis, Minnesota and it wasnt long before the local television tidings programmes started carrying the story on a repair priming coat. This made the public sympathise with Ben & Jerrys, but also provided a masses of free publicity for the company and its products. From its 17-strong legal department, Pillsbury assigned Richard Wegener to get rid of the Ben & Jerry problem. Wegener quickly realised the size of the labour facing Pillsbury. The publicity became bigger than the contend itself said Wegener.The reputation of Pillsbury was at position and Wegener sought to bring a rapid end to the inclination. Realising that the campaign had grabbed the publics attention and the sympathies were predominantly with Ben & Jerrys, Wegener advised Hurley to back down. Kevin Hurley was persuaded to sign an out-of- court settlement agreeing not to coerce any distributors. The campaign was over and Ben & Jerrys had won. The controversy not only ensured the defeat of Pillsbury, it also acted unwittingly as an enormous metre of publicity for the Ben & Jerrys brand.After the victory The success of Ben & Jerrys after the Pillsbury confrontation was marked. The distribution channels were widened still further until Ben & Jerrys ice cream was supplied through supermarkets, securities industry stores, convenience stores, and food service operations, as well as through licensed scoop shops (shops selling just their ice cream), franchised scoop shops, and company-owned scoop shops. By 1992, the companys disorder exceeded $130 million and it was on the marge of international development into the United Kingdom.In the super-premium ice cream sector, a number of radical and distinctive product flavours were launched including Milk chocolate ice cream and white falsify cows swirled with wh ite chocolate ice cream and dark fudge cows, chocolate comfort low fat ice cream, Mocha latte and Triple caramel chunk ice cream. In addition, non-ice cream stock-still desserts were introduced including a range of ice cream novelties, frozen yoghurts and sorbets such as Chunky Monkey frozen yoghurt banana tree frozen yoghurt with fudge flakes and walnuts.The Ben & Jerrys name and the companys reputation for quality meant that the spic-and-span products became quickly adopted by the market. The spirit of the founders helped to frame the companys culture and its bearing. Two heavy statements were released which described the companys approach to its business. In 1988, the company stated that We are consecrate to the knowledgeability and demonstration of a new bodied concept of associate prosperity. This was articulated via its humanity Statement and its Mission Statement.Ben & Jerrys beneficence Ben & Jerrys gives away 7. 5 pct of its pre-tax earnings in three slipway the Ben & Jerrys Foundation employee Community swear out Teams at five Vermont sites and through corporate grants made by the Director of mixer Mission Development. We support projects which are models for social change projects which exhibit creative problem solving and hopefulness. The Foundation is managed by a nine member employee board and considers proposals relating to children and families, disadvantage groups, and the environment.Mission Statement Ben & Jerrys Ben & Jerrys is dedicated to the creation & demonstration of a new corporate concept of linked prosperity. Our mission consists of three interrelated split wTo make, distribute and sell the finest quality all-natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. wTo operate the Company on a sound financial basis of profitable growth, increasing value for our shareholders, and creating life history opportunities and financial rewar ds for our employees.wTo operate the Company in a way that actively recognizes the rally role that business plays in the building of society by initiating innovative ways to improve the quality of life of a broad community local, national, and international. Underlying the mission of Ben & Jerrys is the determination to seek new and creative ways of addressing all three parts, while holding a thickset respect for the individuals, inside & alfresco the company, and for the communities of which they are a part. Questions for students 1.Identify the stakeholders that Ben & Jerrys and Hagen-Dazs had in common at the time of the controversy. 2. Which of Donaldson and Prestons view of stakeholders did Hagen-Dazs have at the time of the confrontation? post evidence from the case in your answer. 3. Which of Donaldson and Prestons view of stakeholders did Ben & Jerrys have in the case? Provide evidence from the case in your answer. 4. chitchat upon the ethical behaviour of the two sides of the Pillsbury dough boy campaign. Which side, if either, was right?