Posted on : 2024-05-03 03:24:11
Article : Good Evening Friday Management TASK 292- Home market winning formulas may not be the market share earners in any other markets. This story of Oreo India and China launches speak on the needs.
This management TASK content on Oreo cookies journey to international markets is a recall of how managements decisions used to be when present style advanced technology or media platforms were not prevalent. This is only to request our viewers to retain or sustain logical patterns for their decisions on business development with inclusive teams’ participations as they still hold good in the present-day market launches of more and more local to global innovative products/brands in different pack sizes and prices.
On March 6, 2012, the famous cookie brand, Oreo, celebrated its 100th birthday. From humble beginnings in a Nabisco bakery in New York City, Oreo has grown to become the bestselling cookie brand of the 21st century generating $1.5 billion in global annual revenues. Currently owned by Kraft Foods Inc, Oreo is one of the company's dozen billion-dollar brands. Until the mid-1990s, Oreo largely focused on the US market as America's Best Loved Cookie. But the dominant position in the US limited growth opportunities 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 1996.
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, accordingly the Kraft team even considered pulling Oreo out of the Chinese market altogether. In 2005, in Kraft’s market research on Oreo’s failure to take off showed that the Chinese were not historically big cookie eaters. 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". In addition, 72 cents for a pack of 14 Oreos was too expensive for the value-conscious Chinese. Without the emotional attachment of American consumers who grew up with the cookie, the taste and shape could be quite alien.
The lessons from the Chinese market have shaped the way Kraft has approached Oreo's launch in India. The $19.1-billion acquisition of Cadbury in 2009 provided Kraft the local foothold it needed in India. Oreo entered India through the import route and was initially priced at Rs 50 for a pack of 14. Sales were insignificant partly because of limited availability and awareness, but also because they were prohibitively expensive for the value-conscious Indian masses. Unlike the Chinese, Indians love their biscuits. India is the world's biggest market for biscuits with a market share of 22 per cent in volumes compared with 13 per cent in the US. While the lion's share of this market is for low-cost glucose biscuits led by Parle-G, premium creams account for a substantial chunk valued at around Rs 7,500 crore ($ 1.25 bn). Oreo’s Communication and advertising have been consistent across the world as the core customer remains the same.
With this recall of little older marketing management thoughts and strategies by global brand marketers now we look forward to your perceptive thoughts on what would have been Oreo’s marketing modes to strongly penetrate markets in China and India. Our Management Solution will be posted on 6th May 2024 Good morning Monday Management solution for the TASK 292.
Log on to www.wingsofmanagement.com to know more about our “Strategy Management consultancy’s” versatile capabilities, global clients and to read our weekly posts and our projects.