Group DanoneProduct – Yogurt
UK Market
Harsh RuiaLin Qi
Mathis CohenQian Cheng
Wang Xiao nanYang Yang
Yogurt
Yogurt seems to be paid more and more attention
Global United Kingdom
Why do we choose yogurt?
Google Trend
Group Danone is in the 7th place in global food companies, and the Danone yogurt (Activia)
has second largest market share in UK.
Rank of food companies In global market (by Oxfam)
Top 10 Yogurt Companies in UK
24.3323.95
4.982.87
1.68
2.76
1.45
1.83
1.390.92
14.2318.27
The food companies competition in global market and UK
POLITICAL/LEGAL ECONOMIC SOCIAL/CULTURAL TECHNOLOGICALTREND
• Political stable.• Law protecting from
takeover.• UK government has
taken a proactive stance towards rising obesity levels.
• More strict regulations of food safety
• Inflation rate falls down
• Cash-strapped consumers
• Recovery from the recession
• Unemployment stabilized at7.7%
• GDP growth 0.8% last term
• Higher awareness about health
• High level of obesity• Busy lifestyle• Increasing consumer
spending & confidence
• Increasing interest in sports club among kids
• Healthier ingredients• Innovation of flavor
IMPLICATION
• Steady domestic market• Supporting activities
held by the government enhance the domestic demand
• Increasing willingness to spend
• More price-sensitive consumers intensify price competition between companies
• Obesity & increasing health consciousness affect demand positively
• Increasing demand of yogurt as a healthy and convenient food
• Natural foods and exercise are strong substitutes
• More enjoyable and innovative products stimulate consumers’ demand
+3 +2 +4 +1
PEST Analysis: Describing a framework of macro-environmental factors
Factor Trend Implication Evaluation
Physical Resources
Production of Yoghurts is made in larges factories in a short amount of time due to the raw material characteristic (milk). Warehouses have to be high quality standard and close to places of sales (nature of the product
Danone owns its yoghurts factories . But all Yoghurts are not made in the UK (Oykos are produced in France) Warehouses and distribution sub contracting to two UK companies
+ 3 majorstrength
Human Resources
Three very different types of employees : worker, administrative employee (marketing, supply chain, finance), scientist (R&D labs).
Danone created three graduate programs to attire new employees. It has a learning and development center and offers the possibility to do sabbaticals.
+1 minor strength
Financial Resources
Access to capital is crucial for launch of new product and large marketing campaign
Strong financial position with parent Danone Group making EBITDA £2,445m
+ 2significantstrength
Intangible Resources
High brand awareness and customer trustworthiness essential in the mass market competition Innovation and R&D are very important to produce new fashionable Yoghurt
‘Danone’ has a strong brand awareness and reputation for quality and innovative produceLarge portfolio of products not all present in the UK Global Danone R&D for new product worldwide and UK lab to product adaptation to local taste
+ 4 significant strength
The internal environment– The strength and weakness Making assessment in order to develop a realistic and achievable strategy for Danone yogurt in UK
Ext. Opportunities and risks
National campaign against obesity Global trend to more healthy food Emergence of new ingredients Changes in consumer lifestyle (healthier behaviour) UK shows sight of recovery (0,8% from July to Sept, strongest growth since 2010)
Internal Strengths
very innovative R&D labs Excellent brand reputation for quality and taste Among of cash available to launch of new productsLarge portfolio of products not all present in the UK
External Threats
Strong competition in the adult Yoghurt market n°2 behind Muller Price-sensitive buyer High substitution possible in desert and snack segments Increasing price of raw materials
Internal Weaknesses
New distributor (after a massive failure in June 2013) Lack of flexibility (huge organisation)Decrease in internal efficiency
The Strategic SWOT analysis – Achievable goals or objectives to be setInforming later steps in planning to achieve the objective
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Differentiation Strategy Create a close relationship with consumer (Yoghurt day, fidelity program,…)
Product development strategy Extend portfolio kids productsCreate a pleasure focus products (less healthier, better taste) Create man focus recipe Make vegetarian range
Market Penetration Strategy Negotiate larger space in Yoghurt section in super marketIntegrate Danone Yoghurt in lunch deal (Costa, Market Place, Food Truck,…)
Cost Leadership Strategy ‘Low-price/price promotions’ to increase market share thus strengthen position
3. The Strategic SWOT analysis – identifying the alternatives for future success
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Product development : Launch a yogurt designed for kid• Low cost of development as the product already exist in the Danone portfolio in other
country.• A very strong brand image in the children market on sport and healthy food (Danone
World cup for kid, in 2013 in Wembley London).• Less intensive competition in comparison with that of adult market.• National awareness on the importance of a vary alimentation for children as a method to
struggle against obesity.• Good understanding of the importance of Calcium and vitamine D for growth of kids.• A very good way to educate children and their mother on the important of Yoghurt in the
healthy diet
Focus on the importance of nutrition (e.g calcium) for kids.
Strategy choice: Product development strategy
% boys % girls
5 to 10 years old 87.8 82.9
11 to 15 years old 97 91.9
The percentage of children who did sport in the last 4 weeks, by age and sex, 2010/1
The percentage of children who need calcium and vitamin D to grow
% boys % girls
5 to 10 years old 100 100
11 to 15 years old 100 100
Segmentation: How to segmenting a kid market? – Yogurt for kid 1/2It is hard to segment kids
Segmentation: How to segmenting a kid market? – Yogurt for kid 2/2The solution : family behavior (with a focus on mother) !
14%
19%
15%17%
19%
16%
Segmentation of UK familyCluster 1Cluster 2Cluster 3Cluster 4
Cluster 1: lack time, money and knowledge Cluster 2: lack the knowledge and parenting skills to improve their family’s lifestyle
Cluster 3: affluent, overweight families who over- indulge in unhealthy foods Cluster 4: live healthily
Cluster 5: strong parenting skills but need to make changes
Cluster 6: plenty of exercise but too many bad foods
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4. Segmentation: How segmentating a kid market ? - Yoghurt for kid 3/3More details on our main cluster.
Sources: Source: TNS Childhood Obesity Consumer Segmentation Research
Custer 4 Custer 5 Custer 6Family diet Strong interest
in healthy diet. Strong parental control but diet rich in energy-dense foods and portion size an issue.
Eating motivated by taste, diet includes both healthy and unhealthy foods.
Physical Activity
Family active although believe children not confident doing exercise.
Know they need to do more: time, money, self-confidence seen as barriers
Activity levels are high
Social class AB C1 C2Intent of change
Low intent to change but already leading a healthy lifestyle.
Low intent on diet but significant intent to change on physical activity.
Highest among the clusters for both diet and physical activity.
Cluster1
Cluster2
Cluster3
Cluster4
Cluster5
Cluster6
‘Differentiated’ Targeting: Focus on the most promising segments!
Targeting strategy: Differentiated Targeting
Cluster 4: living
healthily
Cluster 5: strong
parenting skills but need
to make changes
Cluster 6: plenty of
exercise but too many bad
foods
Distinct: Strong interest in healthy diet, active but not focus on sport
Significant intent to change
on physical activity and diet rich in energy-dense foods
Activity levels are high and diet drove by
taste
Accessible
through multi-platform
advertising campaign on importance of
yoghurt in children
healthy diet
through multi-platform
advertising campaign on importance of
yoghurt for healthy sport
performance / store promotion
through multi-platform
advertising campaign on importance of
yoghurt for healthy sport
performance / store promotion
Measurable
through age groups of
mums(mainly 45-64-year-olds) and the social class
(AB)
through age groups of mums
(mainly 45-64 and 17-24-year-
olds) and the social class (C1)
through age groups of mums(mainly 17-24-year-olds) and the social class
(C2)
Profitable
segment stands for 17%
of consumer market
segment stands for 19,1% of consumer market
segment stands for
17% of consumer market
52% Potential consumer
Typical Values Per
100gTiny-Tims Muller Little
StarYeo Valley – Little Yeos Yoplait Kids
Energy 405kJ/97Kcal 411kJ/98Kcal 457kJ/109Kcal 405kg/96kcal
Carbohydrate(of which sugars)
11.7g (of which sugars 10.8g)
13g (of which sugars 12.1g)
11.9g (of which sugars 10.4g)
12.6g(of which sugars 12.2g)
Protein 4.7g 3.7g 5.1g 5.3g
Fat(of which saturates)
3.5g (of which saturates 2.2g)
3.1g (of which saturates 1.9g)
4.6g (of which saturates 3.1g)
2.3g (of which saturates 1.6g)
Fibre 0.1g 0.1g Trace 0.1g
Sodium 0.08g 0.1g 0.1g
Calcium 140mg 108mg 200mg 150mg
Positioning: Developing the image of our product in consumer’s mind
Nutrition information of our main competitors
Positioning: Developing the image of our product in consumer’s mind
Nutrition-Age Axes – Where are our competitors and Where do we want to be
0-5yrs 5-10yrs
Nutrition
Age
Focusing on kids from 5-10Offering nutrimental LifestyleDeveloping energetic kids
Positioning: Developing the image of our product in consumer’s mind
Nutrition-Price Axes – Where are our competitors and Where do we want to be
Nutrition
Price
HealthyPositive
Optimistic
We worth it !
SMARTT
Long term and Short term objectives for our strategy
Long-term objectives• Increase Danone’s market share in the UK
to and better market penetration. , brand loyalty and equity ,and increase in the total turnover by 10%.
Reenforce the R&D lab on nutrition
raising number of products in the uk from 5 to 6
Be the first kid yoghurts company (aiming to 50% of the market share)
Increasing the Product Awareness in the uk through market penetration and marketing
Maintenance / increase in the market share by 40-50%
Short-term objectives
Achieved through product development and segmentation as the quality leader by targeting 1. Kids
2. Mothers
Cluster 4: living healthily Cluster 5: strong parenting skills but need to make changes
Cluster 6: plenty of exercise but too many bad foods
Productdrinkable yoghurts (30g) Rich nutrition (high quality)Natural flavour
classic yoghurts (50g)Rich nutrition (high quality)New flavour
In large batch Rich nutrition (high quality)Generous flavour
Price Premium Pricing Market Pricing Competitive Pricing
Place Increase stores presence (on street and on line)
Increase stores presence (on street and on line)
Increase stores presence (on street and on line)
Promotion
Create a trendy brand for the children (“you’re cool if you have it”) with advertising campaign to support itTV& online ads
Partnership with primary school. Take the Danone kids yogurt as a break time dessert
Public Relationship campaign on the importance of yoghurt to children healthy diet (campaign in children medical centre, special web site to help mother to cook healthy diet, specialized press )
Sales promotion of “family packs”(yogurts for all family members, including parents and kids) and 3 for 1 discount.
Public relationship on the importance of a daily yoghurts for kids to practice sport (explicative tv/radio spot with a moral support)
Provide free trial yogurt in Parks, sports club etc.
Public relationship on the importance of a daily yoghurts for kids to practice sport (explicative tv/radio spot with a moral support) and in sport club (which are frequently use by the mother.
Marketing Mix: What does our product offer
Product – Price – Place – Promotion
Implementation Control: Assessment of the overall strategy
Continuously questions the basic direction of the strategy
Type of Control Prime Responsibility Purpose of Control Approach
I. Annual-plan control Top management; middle management
• To examine whether the planned results are being
achieved
• Sales analysis• Market-share analysis
• Sales-to-expense ratios• Financial analysis
• Market-based scorecard analysis
I I. Profitability control Marketing controller
• To examine where the company is making and losing
money• To evaluate and improve the
spending
Profitability by:• Product• Territory• Customer• Segment
• Trade channel• Order size
III. Efficiency control Line and staff management; marketing controller
• Efficiency and impact of marketing expenditures
Efficiency of:• Sales force• Advertising
• Sales promotion• Distribution
IV. Strategic control Top management; marketing auditor
• To examine whether the company is pursuing its best opportunities with respect to
markets, products, and channels
• Marketing effectiveness rating instrument
• Marketing audit• Marketing excellence review• Company ethical and social
responsibility review
Appendix
1919, Barcelona, Spain, Isaac Carasso, · Named after his son Daniel. · Manufacturing Yogurt
1929, Daniel Carasso launched Danone in Paris and business was good.
1941, entrusted Danone France to Norbert Lafont and Danone Spain to Luis Portabella · Founded Dannon US
1945,rebuilding French and Spanish businesses. · Lost interest in the US market; · Back to BSN Gervais Danone in 1981.
1967, fusion with Gervais, · Gervais-Danone company.
1972, Daniel Carasso and Antoine Riboud. · Merged their two companies.· Making Danone into a world brand
Danone: History of the group
Fresh Dairy Product --- Yogurt
Water
Baby Nutrition
Danone : some information over the range of brands
Segmenting more information on the Cluster
Positioning : price information