I have watched with great interest here in the Philippines, over the past couple of months, two separate ice-cream marketing exercises.

The two ice-cream strategies have been launched by two different companies operating in two different retail environments. One is investing a very large marketing budget on promotions whilst the other has simply gone about replacing one existing flavor with a new flavor. One is priced at the low cost end of the market whilst the other sits at the upper end of what you’d expect to pay for an ice-cream.

One has an international brand reputation and the other relies upon the store’s own brand. One uses a broad retailer-based store distribution network, the other has its own extensive retail chain to guarantee market penetration.

It seems the only thing both campaign strategies have in common is the timing of their launches as both have caught the start of Summer time. Whilst it is always hot in the Philippines there is no doubt the real heat and humidity engulfing the nation once May arrives.

So who are the companies behind these products and what are their respective ice-creams?

At the top end of the market we have Selecta launching the internationally renowned Magnum, the famous Belgian chocolate ice-cream on a stick. The Magnum entered the market with a fanfare gaining media attention galore and was supported with extensive television and newspaper advertising. Their distribution network was already available as Selecta has existing dominant exposure with ice-cream freezers in supermarkets and convenience stores nationwide. The Magnum sells for P50 (about US$1.25) and that makes it a top end price ice-cream treat.

At the other end of the market is a low cost soft-serve ice cream in a waffle cone. This product belongs to the 7-Eleven group and carries its own private brand the Fundae Cone which sells at P15 (about 40 cents).

There is no massive advertising campaign for the Fundae Cone, just a cardboard poster in the window and another dangling over the dispensing machine; and the media is not swooning around the merits of this treat. So what is new with 7-Eleven’s Fundae Cone? It is the release of a new flavour.

Gone is the traditional chocolate, which sat side by side with vanilla, and in its place is the new taste sensation “ cheese”. Yes you read it right the hottest flavor in soft-serve ice-cream is cheese and these cones are racing out the doors of every 7-Eleven store across the nation. 

Whilst the Magnum is pitched with an exotic appeal and seems to be aimed at those having a status in life or those desiring to have that image, the Fundae Cone simply goes about being affordable to the masses and readily available wherever there is a 7-Eleven convenience store.

Now I cannot give you details on the respective profit margins nor indeed the units sold but it has been reported the demand for Magnum has been “way beyond expectation”, and stocks have been running out.

The only feedback I can provide on the 7-Eleven Fundae Cone is by way of personal observation and that is it must be one of the highest unit selling items in the 7-Eleven offering because on every visit to our local store there is a steady and constant stream of Fundae Cone cheese ice-cream devotees leaving the store.

Maybe they are both winning in this market but I confess I love the concept behind the 7-Eleven cheese soft-serve. Introduce a flavor that hits the local taste buds right on the mark, keep marketing costs low, use the existing high foot traffic in 7-Eleven stores, draw attention to the new flavor with simple in-store signage and keep the price affordable.

Given my son can devour three Fundae Cone cheese flavored soft-serve ice-creams for every single Magnum, I am loving the economics of the low cost strategy. Whoever was behind the development of the cheese flavored ice-cream has demonstrated the importance of knowing the customer. Who would ever have thought cheese flavor ice-cream would be a culinary treat?

Congratulations 7-Eleven on a brilliant job in knowing your market and putting a big smile on your customer’s faces.

InsideRetail.Asia columnist Darrell Wisbey has 30 years retail experience, living and working in Australia and Asia. He is based in the Philippines and a member of Impact Retailing. Email Darrell.