Marketing danone Essay Example

globally and hampers mental development in 40-60% of children from developing nations. Approximately 25% of pre-scholars in the developing world suffer from vitamin A deficiency, which can result in blindness, susceptibility to disease, and higher mortality rates. Vitamin A deficiency leads to the death of about 1-3 million children annually. Additionally, iodine deficiency is the primary cause of mental retardation and brain damage.

1.9 billion people globally are at risk of iodine deficiency, a preventable condition by adding iodine to salt. Considering this, we discovered specific qualities in Deanne yogurt that distinguish it as more than just a convenient and tasty snack.

Deanne Yoghurt

The yoghurt contains four micro nutrients - Vitamin A, Iron, Zinc, and Iodine - that help address deficiencies commonly found among Indians. In addition to this, yoghurt has a nutritious texture achieved through the formation of lactic acid during milk fermentation.

During fermentation, two lactic bacteria - Streptococcus thermopiles and Lasciviously deliquesced vary. Bulgarians - are used. This process converts 20-30% of lactose in milk into lactic acid. Yogurt, which contains bacteria like ;-glaciological, is more tolerable for lactose-intolerant individuals. The texture of yogurt also aids digestion. Its thickness slows down the movement through the digestive system, enabling the lactate enzyme to efficiently break down lactose and enhance nutrient absorption.

Consuming yogurt can be beneficial in meeting the recommended fat intake, which is approximately 65 g per day for women and 90 g per day for men. Each serving of yogurt contains a maximum of 5 g of fat, making it a nutritious choice that provides essential nutrients. Deanne yogurt, recently introduced in Pun, is an excellent option. It is

now available in three flavors (strawberry, mango, and vanilla) and sold in supermarkets and grocery stores as part of the phased launch program in both Pun and Iambi in India.

Deanne fortified yogurts have a shelf life of 15 days. Deanne Dahl is priced at RSI 27 for 400 grams and RSI 14 for 150 grams, while labored yogurts are priced at RSI 10 each for a 100 gram pack size. This product, which is in its initial stage of launching, provides us, as marketing students, with an opportunity to analyze the Indian market for flavored yoghurt and develop a marketing plan for further expansion of Deanne Yoghurt. The situational analysis reveals that yogurt is a fermented milk product that is prepared by blending bacterial cultures into the milk.

In India, traditional yoghurt products like Dahl and sour milk drinks such as alias and buttermilk used to be made at home at a low cost. Some consumers still prefer making these items at home because branded products in the market are expensive. However, with the growth of the middle class in big cities and increased awareness of the nutritional value of dairy items, along with a decrease in the prices of processed dairy products, sales of packaged dairy food products have increased in the past decade.

Currently in India, yoghurt is offered in two different forms: set and stirred. Set yoghurt is packaged in plastic cup containers, typically ranging from 100 to 400 grams. This type of yoghurt is particularly favored in the northern and western regions of the country. In contrast, stirred or loose yoghurt is sold in plastic pouches, with quantities ranging from

100 ml to 500 ml. Loose packs are more commonly found in the southern part of India.

The surge in demand for yoghurt and other sour milk products in India can be accounted for by various factors. To begin with, the rise can be attributed to the higher incomes of urban households. Additionally, there is a growing awareness regarding the health advantages of processed dairy products. Lastly, the impact of western culture on society has also played a role in driving up demand. It is noteworthy that until recently, Indian consumers primarily consumed plain yoghurt without showing any interest in flavored or fruit variations.

Company Grouper Deanne (Deanne) is a prominent player in the global market for fresh dairy products and beverages. Based in Paris, France, the group has a workforce of 76,044 people across the world. In PAYOFF, the group achieved revenues of E 15,220 million (approx. $22,393.8 million), marking a 19.1% increase compared to PAYOFF. The group's operating profit during PAYOFF stood at E 2,270 million (approx. $3,339.9 million), reflecting a 33.8% growth over PAYOFF. The net profit for PAYOFF was E 1,313 million (approx. $1,931.Lion), which showed a 10.8% rise from PAYOFF. Under its vast portfolio of over 25 brands, the company offers products like bottled water, savory snacks, dairy desserts, pro-biotic dairy products, beverages, and fresh dairy products. The company's key strengths lie in its strong global brand image, market leadership in various product categories and regions, diversified revenue model reducing risks, and a primary focus on product innovation to enhance its competitiveness.

Deanne group has recently launched itself in India after ending its partnership with Britannic in 2007. The company's

main goal is to capture a substantial share of the flavored and value-added milk product market by differentiating itself through innovative products. Emphasizing nutritional benefits, Deanne will primarily target health-conscious individuals.

Karakas Milk Corporation (KM), along with its flagship brand Indiana, dominated the yoghurt and sour milk product market in India until 2008. KM had a strong presence in southern India, particularly in Karakas, which had the highest per-capita consumption of these products. Another major player in the market was the Gujarat Co-operative Milk Marketing Federation Ltd (GAMMA). Both KM and GAMMA experienced a growth rate of approximately 1% in 2008.

In 2009, Nestle's probity yoghurt brand, Amnesia, contributed to an increase in Nestle's market share. This growth was driven by a higher demand for yoghurt among consumers. The pricing of yoghurt played a crucial role in determining the market share of different brands. National players such as Nestle faced challenges as their manufacturing costs were higher compared to competitors like KM and GAMMA. Consequently, these competitors were able to offer their products at significantly lower prices. For instance, a gym unit of Indian Dahl was priced at RSI 10, whereas the equivalent quantity of Nestle's Fresh and Natural Dada was priced at RSI 13.

Until 2009, Nestle and Weakly were the only international players in the yoghurt market in India. Domestic brands, supported by state level cooperatives, were able to thrive due to their short shelf life, which gave them an advantage over international players. Additionally, up until 2008, there were no private label brands present in the Indian yoghurt and sour milk market. Deanne, a collaborator, now faces fierce competition from local

players such as Karakas Milk Corporation and Gujarat Co-operative Milk Marketing Federation Ltd.

These local players have certain advantages over an external player like Deanne. Firstly, they can price their products lower than others due to low manufacturing costs and state-funded cooperatives. Additionally, their distribution network is more efficient and reaches a wider geographical area, which is a crucial factor for profitability in the dairy product industry. Moreover, an efficient delivery system is required for the supply of milk and culture for the production process.

To tackle these issues, Deanne has formulated strategies involving joint ventures and partnerships with other companies. One of its partnerships is with Dynamic, which serves as the co-manufacturer for Deanne products in India. Additionally, Deanne has formed a joint venture with Weakly Honshu, a Japanese manufacturer of probiotic dairy products, to introduce a probiotic yogurt named Weakly. This product is distributed through the direct selling channel known as the Weakly Ladies. Furthermore, Deanne has collaborated with various retail chains and distribution networks to ensure widespread accessibility of its products.

The Yoghurt market in India witnessed a growth of approximately 18% in 2008-09, reaching RSI 6.5 billion. Sour milk drinks demonstrated the highest growth, with a value increase of 22% in 2009. The urban population of India has become increasingly conscious of the nutritional and health benefits provided by organic and cultured dairy products, resulting in an increased demand for these items. Since there are currently only a limited number of companies providing such products, there exists a profitable business opportunity within this particular sector.

Prospective consumers of processed and packaged dairy food products are those who appreciate their nutritional and

health advantages. The reliability and brand reputation of the vendor are important factors that influence customers to choose such products. Additionally, customers value the shelf-life and use of natural ingredients in the product. Packaging also plays a significant role in consumer preference, including the size of the packs and their convenience for consumption, storage, and re-consumption.

When making purchasing decisions in India, consumers consider pricing as an important factor. To determine the price, it is crucial to consider the production cost per unit and the competitor's price for the same quantity. Valuable information can be obtained from various sources such as official statistics, trade associations, trade press, company research, store checks, and trade interviews. Additionally, Porter's Diamond model identifies several factors that contribute to a nation's advantage, including factor conditions. In India, there is an abundant supply of low-cost labor.

Skilled workers are readily available in urban and semi-urban areas at low costs, and there is easy access to raw materials such as milk and culture throughout the country. Some parts of the country have favorable state laws that make it relatively easy to set up a manufacturing unit. The demand for packaged dairy products has significantly increased due to growing awareness of their nutritional and health benefits. In the fiscal year 2008-09, the yoghurt market in India grew by approximately 18%, reaching RSI 6 billion in current value terms. The influence of Western culture on the middle and upper-middle class has also contributed to the rising demand. Plans include joint ventures and partnerships with other players, like Dynamic, for co-manufacturing Deanne products in India. Furthermore, partnerships have been established with Japanese pro-biotic dairy product

manufacturer Weakly Honshu to launch a pro-biotic yoghurt called Weakly Ladies' Done. Retail chains and distribution networks have also been partnered with to ensure the availability of the product for the targeted customer segment.

In India, flavored and fruit yogurt is not well-known among most people. However, local company Karakas Milk Corporation (KM) has advantages over foreign competitors because of their lower costs and improved distribution systems. Currently, there are no private label products in the Indian yogurt and sour milk market. Pricing is a significant factor for Indian consumers when making purchasing decisions. Daemon's marketing goal is to attain a 12% market share by 2014 within five years.

To become a leader in the market dominated by wildebeest's players, it will require significant time. Nonetheless, the company's main objective should be to gradually expand its market share and generate awareness for both flavored yogurt and the Deanne brand. The marketing strategies will involve segmenting the target audience based on demographic and geographic criteria such as income, gender, age, and urban or rural residence.

The proportion of middle-class households in the top 20 cities in India is projected to increase from 39% in 2007-08 to over 55% by 2016. Simultaneously, the number of high-income households (earning more than US$30,000) will triple during this time frame and reach a percentage of 13%. It should be noted that the percentage of low-income households (earning less than US$3,000) may decrease by half and constitute only 7% by 2016, as compared to the previous figure of 16% in 2007-08. This significant shift in household demographics will have a considerable impact on product demand for various categories such as food

and beverages, consumer electronics, clothing, and personal transportation.

India's arbitration rate is higher than the global average. It is projected that by 2030, 40% of India's population will reside in urban areas, compared to approximately 28.4% in the year 2007-08. The urban population in India experienced significant growth from 1995 to 2007 due to both natural increase and migration, and this trend is expected to continue until 2015. During the period from 1995 to 2007, the proportion of urban households rose from 26.9% to 29.3%, and it is estimated to reach a level of 31.8% by the year2015. Given these socio-economic indicators, targeting the middle-class Indian family residing in urban regions emerges as an appealing choice.

The food choices of women and children have a significant impact on the entire family's eating habits. Educated married women with busy careers often struggle to cook daily, which has led to an increase in the popularity of packaged food. This trend is expected to continue as more women enter the workforce. In urban areas of India, media heavily influences teenagers aged 10-14, influencing their family's food decisions.

The success of Kellogg India demonstrates the impact of breakfast cereals on urban India. Wealthy and middle-income families in urban areas are now consuming cereals more frequently, particularly young children. Kellogg India has taken advantage of this trend by promoting their cornflakes as a nutritious snack for kids after school, making it important to target this specific population segment. However, it is crucial to consider the decreasing proportion of teenagers in the overall population from 2007 to 2015 due to families opting for fewer children when developing positioning and rationale strategies.

In the past, packaged food had a negative perception among Indians who believed it was stale and of inferior quality. However, as consumers have become more knowledgeable about product quality and branded goods have become more affordable and necessary, there has been a shift in perception towards packaged goods being considered 'hygienic and high in quality'. Consequently, branded packaged goods have gained popularity.

With increased investment in the power sector and nationwide expansion of electricity infrastructure, there has been a surge in sales of household electrical appliances like refrigerators. This rise in appliance sales has also led to an increase in the consumption of frozen and refrigerated packaged foods. In Northern and Western India, sweet yoghurt is preferred over savory, unlike South India where it is more commonly consumed. This regional preference presents opportunities for introducing flavored yoghurt that caters to the diverse tastes and preferences of consumers.

The concept of flavored yoghurt is well-accepted in western cuisine. Middle-class urban Indian families, who are increasingly seeking new culinary experiences, are likely to be open to flavored yoghurt as well. Considering these demographic, economic, and social factors, Deanne yoghurt can be positioned as a nutritious and versatile food option. It can be savored as a snack, dessert, or even included in breakfast meals. What sets Deanne apart is its outstanding health advantages, delightful flavor, and superior quality.

Deanne yogurt stands out by providing the flavor and satisfaction of indulgent ice-cream, along with the health and nutritional advantages found in health drinks like malted health drinks. By combining the benefits of these two products, Deanne yogurt sets itself apart from other dairy and health food options

available in the market.

Market Research

Background: Deanne Yoghurt was launched in Pun without conducting thorough market research.

The company conducted surveys to collect valuable feedback on customer preferences and their attitude towards health snacks in India. They wanted to determine aspects such as eating habits, the number and type of flavors to launch, etc. The company was reasonably confident about Daemon's acceptance in India, considering its success in countries like Indonesia with no exposure to fermented dairy. The problem at hand is understanding the general consumer perception of yogurt and exploring the potential for a profitable market for flavored yogurt in India.

The decision alternatives for Deanne yoghurt are to expand its reach to other cities beyond Pun and Iambi or to stop expansion altogether. Expanding would require increasing manufacturing capacity and setting up additional factories. Currently, there is only one factory in Barmaid (near Pun) in Maharajah's that serves both Pun and Iambi markets. The research objective is to determine if India is ready for flavored yoghurt and identify the specifications and preferences of nonusers that the company can meet in order to gain a larger market share. The data for this objective is collected through a primary survey.