Question

PASSAGE

Amul is the first choice of so many ice cream lovers in India among the top ice cream brand category. Amul brand, owned by Gujarat Co-operative Milk Marketing Federation, was established in 1946 in Anand, Gujarat.

The second on the list of top ice cream brands in India is Vadilal.

Cornetto and Magnum are one of the top ice cream brands in India owned by Hindustan Unilever. Mother Dairy is a very strong name in the Indian ice cream industry. This company is very similar to Amul, in terms of the products, they manufacture and sell. Another big player in the ice cream industry is Havmor. Havmor Company has been able to stand strong as one of the big fighters in the battle of top ice cream brands in India for very long. Ice cream market also has local and less popular brands apart from the top brands.

Amul was (and still is) in the Guinness record for running the longest- ever advertising campaign. The advertising strategy of Amul through digital marketing made the most of it through platforms such as Facebook, Twitter, Instagram, and others.

1. Identify the most important feature of the ice cream market (1 marks)
2. Identify the type of cost incurred by firms on advertising campaigns and strategies. (1 marks) 
3. Express your personal opinion about the ice cream market based on the above information (2 marks)

Answer 1

1. The most important feature of the ice cream market is ‘product differentiation’.
2. The cost incurred by firms on advertising campaigns and strategies is called ‘selling cost’.
3. There are fairly large number of sellers in the ice cream market in India. The products sold by these sellers are different but are close substitutes to each other. There is freedom of entry and exit. Also, each firm has to incur some selling cost to create more demand and increase the volume of sales. All these are features of monopolistic competition. So, the ice cream market in India is a monopolistic competition.