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Bluebonnet Creameries is a large U.S. ice cream company. The familyowned enterprise makes premium ice cream using only fresh, natural ingredients. Its butter-fat content is lower than that of Ben & Jerry’s and Haagen-Dazs but higher than that of such national brands as Dreyer’s.
This allows the firm to hit the true “middle” of the market—Bluebonnet has a premium taste and image but is sold for a lower price than the highend brands and is also only slightly more expensive than national massproduced brands.
One ingredient in Bluebonnet’s success has been its production and distribution model. Transporting ice cream over long distances requires that it be “deep frozen.” This process, unfortunately, also requires the addition of preservatives and produces a slightly altered taste. As a result, Bluebonnet has built several mid-sized creameries near its major market centers throughout the United States. The firm also has its own fleet of delivery trucks and drivers to transport the ice cream and stock grocery shelves. Using this model, Bluebonnet doesn’t have to deep freeze its products because its ice cream is made within a one-day drive of each market where it’s delivered. Thus, a truck can leave a creamery with a full-load early in the morning, spend the day making deliveries, and have an empty truck by the end of that same day.
Consumers can also order Bluebonnet products online. The order is packed in Styrofoam containers, refrigerated with dry ice, and shipped via FedEx or UPS with next day delivery. Because distances are so short and export requirements clear, Bluebonnet can also fulfill orders to Canada, Mexico, Central America, and the Caribbean. A potential international customer from Europe, Asia, or elsewhere is informed early in the order process that Bluebonnet cannot ship to that individual’s address. The primary reasons that Bluebonnet cannot fulfill orders from these locations are that normal shipping times are simply too long and customs regulations too complicated.
The manager in charge of online service has been monitoring foreign orders for several years and has noticed a steady but dramatic increase in online order attempts from Asia, especially China. Indeed, the attempted order volume has grown to the point where the online service manager has brought it up to a couple of senior managers (both members of the family that owns Bluebonnet). He recently informed them that the requested order volume from China would, if orders could be fulfilled, increase the firm’s total revenues by 25 percent.