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March 31, Executive Summary: Faced with stagnation in the domestic market, Kraft Foods moved it into emerging markets where it made some mistakes, learnt from them and ultimately triumphed. This case study looks at Cadbury india pricing strategy strategies used to win over customers in China and India.
On March 6,the famous cookie Cadbury india pricing strategy, Oreo, celebrated its th birthday. But the dominant position in the US limited growth opportunities and spurred Kraft to turn to international markets. With China and India representing possibly the jewels in the crown of international target markets due to their sheer size, Oreo was launched in China in The China launch was based on the implicit assumption that what made it successful in its home market would be a winning formula in any other market.
However, after almost a decade in China, Oreo cookies were not a hit as anticipated, according to Lorna Davis, in charge of the global biscuit division at Kraft. And the team even considered pulling Oreo out of the Chinese market altogether. InKraft decided to research the Chinese market to understand why the Oreo cookie that was so successful in most countries had failed to resonate with the Chinese.
Research showed the Chinese were not historically big cookie eaters. According to Davis, Chinese consumers liked the contrast of sweet and bitter but "they said it was a little bit too sweet and a little bit too bitter".
Without the emotional attachment of American consumers who grew up with the cookie, the taste and shape could be quite alien.
In addition, 72 cents for a pack of 14 Oreos was too expensive for the value-conscious Chinese. Kraft developed 20 prototypes of reduced-sugar Oreos and tested them with Chinese consumers before arriving at a formula that tasted right.
They also introduced different packages, including smaller packets for just 29 cents to cater to Chinese buying habits. The changes had a positive impact on sales and prompted the company to ask some basic questions challenging the core attributes of the traditional Oreo cookie.
Why does an Oreo have to be black and white? And why should an Oreo be round? This line of questioning and an ambition to capture a greater share of the Chinese biscuit market led Kraft to remake the product in and introduce an Oreo that looked almost nothing like the original.
The new Chinese Oreo consisted of four layers of crispy wafers filled with vanilla and chocolate cream, coated in chocolate. The local innovations continued and Oreo products in China today include Oreo green tea ice cream and Oreo Double-Fruit.
Another challenge for Kraft in China was introducing the typical twist, lick and dunk ritual used by American consumers to enjoy their Oreos. Americans traditionally twist open their Oreo cookies, lick the cream inside and then dunk it in milk.
Such behaviour was considered a "strangely American habit", according to Davis. A product tailored for the Chinese market and a campaign to market the American style of pairing Oreos with milk paid off and Oreos became the bestselling cookies of that country.
But sales were insignificant partly because of limited availability and awareness, but also because they were prohibitively expensive for the value-conscious Indian masses. Learning from the Chinese success story, the company under global CEO Irene Rosenfeld took localisation strategies seriously from onwards.
Unlike the Chinese, Indians love their biscuits. Oreo developed a launch strategy around taking on existing market leaders in the cream segment - Britannia, Parle and ITC. The focus was to target the top 10 million households which account for 70 per cent of cream biscuit consumption.
Oreo launched in India in March It entered the market as Cadbury Oreos because Cadbury is a stronger brand name than Kraft, and initially focused on generating awareness and rapid trials. The Made in India tag meant using locally-sourced ingredients, modification of the recipe to suit Indian tastes and possibly cheaper ingredients, a smaller size and competitive prices.
Oreo launched its traditional chocolate cookie with vanilla cream at Rs 5 for a pack of three to drive impulse purchases and trials, Rs 10 for a pack of seven and Rs 20 for a pack of 14 for heavy usage. The cookie looks the same as its international counterpart with a motif of 12 florets and 12 dashes.Price in the Marketing mix of Cadbury.
With quality comes price. As the quality of the products is high, and the beverages and Oreo requires constant marketing to be on top, the price of Cadbury products is also high in some cases, whereas in others it is very much reasonable.
How Word-Of-Mouth Rescued Cadbury From Infamy. Hydar Saharudin. August 8, Add comment. 5 min read. Cadbury faced another crisis in India. A leading brand in the Indian confectionary market, Cadbury chocolates were infected with worms, Pricing.
Demo. Apache/ (Ubuntu) Server at leslutinsduphoenix.com Port Published: Mon, 12 Jun In when the brothers introduced the process of pressing the cocoa butter out of the cocoa beans. The benefits for the Cadbury brothers was that they could use the butter to make different types of eating chocolate the first of which was the Cadburys dairy milk.
How Cadbury's won the battle of worms Bharat Puri, managing director, Cadbury's India says, "While we're talking about a few bars of the 30 million we sell every month - we believe that to be. Retro branding is a powerful tool that can be used to generate, or rather regenerate, loyalty for a brand.
Brands that have a rich heritage can use their legacy to generate strong emotional connects about value/ performance in consumers minds.