Question

CASE STUDY

DANONE MEANS DAIRY AND MORE

Although yoghurt, water and biscuits are entirely different products, Danone competes effectively in all three categories. The French company is the world’s largest maker of yoghurt products; its brands include Actimel in Europe, Danonein South America and Danone in the United States. In addition to dairy products, the company markets bottled water (under Evian and other brands) and biscuits (under Jacob’s and other brands). Clearly Danone’s marketers cannot target every customer in every market, so they study the needs that drive consumer behavior and reach out to targeted segments through differentiated marketing.In the yoghurt market, the company marketers identified segments based on a diversity of needs and wants: some consumerswant health benefit, some want a low calorie snack, some prefer a fruity or creamy taste and so on. In response, Danone makes dozens of varieties of yogurt with higher or lower levels of sweetener, flavorings, fruits and other ingredients. Its yoghurt packages come in different sizes and shapes to accommodate buyers who want portable snacks, to eat yogurt at home and who display other consumption behaviors. Also Danone offers smoothies and enriched dairy drinks for those who prefer to sip their yogurt rather than eat it with a spoon.Needs and perception can change over time, as Danone’s marketers are well aware. After the company acquired ‘Shape’, which was positioned in the UK as a diet yogurt brand, marketers researching consumer perceptions found that diet product were seen as less relevant than healthy foods. Meanwhile, ‘Shape’ was facing more competition from Onken, Benecol and other diet dairy brands. Armed with this information, Danone’s marketers decided to change shape’s

positioning by changing its marketing. They designed a new logo, packaging and advertising to appeal to customers seeking healthy foods ( a positive association) rather than those avoiding higher calorie foods (a negative association ) Interest in healthy eating has also become amajor factor in food buying patterns among Chinese consumers. Spotting this opportunity, Danone’s managers bought a majority interest in china’s Hangzhou Wahaha group, which makes Enriched Milk Drinks, expanded capacity and use the company’s Brand and distribution system to break into the bottled water market. Now china is Danone’s largest market for water, with annual purchasing of more than 4 billion bottle.Like their counterparts in other countries, some consumers in china prefer to support local businesses. This worked to Danone’s advantage when the government asked the parent to assist Wahaha in developing a local cola soft drink, ‘Future cola’, which, the company positioned as “the Chinese people’s own cola”. The drink quickly gained enough market share to take the number-three position (behind Coca-Cola and Pepsi-Cola) -an especially striking achievement because Danone is not involved with soft drinks in any other markets.

Note: Answer the below given questions.

1.How did positioning contribute to Danone’s Success in marketing future cola?

2.What are the various Segments identified in the yoghurt market?

3.Why did Danone decide to change the positioning of ‘shape’?

4.In what way is Danone following Differentiated Marketing?

5. Why did Danone eliminate the Diet Foods segment?

Answer 1

1.How did positioning contribute to Danone’s Success in marketing future cola?

The chinese customers are interested in healthy eating and also some customers in China prefer to support local businesses. Hence, Danone had bought a majority interest in the china’s Hangzhou Wahaha group which produces Enriched Milk Drinks. When Government asked the company to assist Wahaha to develop a local cola soft drink, they used the opportunity to position the product as “the Chinese people’s own cola” thus appeasling to the customers interested in supporting local brands. This positioning of the Cola helped the company to achieve number three in market share.

2.What are the various Segments identified in the yoghurt market?

The marketers of Danone identified various customer segments based on their needs and wants. Some of the segments include:

1 . Consumers who want health benefit

2. Consumers who want a low calorie snack

3. Consumers who prefer a fruity or creamy taste and so on.

3.Why did Danone decide to change the positioning of ‘shape’?

The marketers of Danone found that consumer perceptions found that diet product were seen as less important than foods that are considered as healthy. Also presence of brands like Onken, Benecol and other diet dairy brands was leading to increase in competition in the diet foods segment. Hence Danone decided to change the positioning of shape from a 'diet product' to a 'healthy food' product.

4.In what way is Danone following Differentiated Marketing?

Danone is following Differentiated marketing multiple market segments of the same product.

For example in case of Yoghurt market, they identified different segments of customers such as who want health benefit, who want a low calorie snack, prefer a fruity or creamy taste and so on. Then they made dozens of varieties of yogurt with higher or lower levels of sweetener, flavorings, fruits and other ingredients. They also started packaging yoghurt in different sizes and shapes to accommodate buyers who want portable snacks, to eat yogurt at home and who display other consumption behaviors. Also they offers smoothies and enriched dairy drinks for customers who prefer to sip their yogurt rather than eat it with a spoon.

5. Why did Danone eliminate the Diet Foods segment?

The marketers of Danone through their market research of consumer perceptions found that diet product were seen as less important than foods that are considered as healthy by the consumers. Also there was very high competition in the diet foods segment due to presence of brands like Onken, Benecol and other diet dairy brands. Hence, to gain a better market share decided to eliminate the Diet Foods segment and focus on the Healthy Foods segment.