Group DanoneProduct – Yogurt

UK Market

Harsh RuiaLin Qi

Mathis CohenQian Cheng

Wang Xiao nanYang Yang

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

History of Group Danone

Fresh Dairy Product --- Yogurt

Water

Baby Nutrition

What do we have?

Yogurt

Yogurt seems to be paid more and more attention

Global United Kingdom

Why do we choose yogurt?

Google Trend

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

Capturing Marketing Insights – the internal environmentThe most relevant Strategic Capabilities – a resource audit of Danone Yogurt 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 – identifying the alternatives for future success

7

Product development : Launch a yoghurt especialy design for kid• Low cost of development as the product already exist in the Danone portfolio in other

• country

• National awareness on the importance of a vary alimentation for children as a mean to struggle against obesity

• Good understanding of the population of the importance of Calcium and vitamine D to help the growth

• A very good way to educate people to yoghurt (parents, habit in the childhood)Focus on the importance of calcium for kids during growth and the healthy food

• Use the very strong brand image in the children market(Danone World cup for kid, in 2013 in Wembley London)

• Small number of competitor on the segment only two in comparison of the adult market

Strategy choice: Product development strategy

% boys % girls

5 to 10 years 87.8 82.9

11 to 15 years 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 100 100

11 to 15 years 100 100

Segmentation: How to segmenting a kid market? – Yogurt for kid 1/3It is hard to segment kids

Segmentation: How to segmenting a kid market? – Yogurt for kid 2/3The solution : family behavior (with a focus on mother) !

14%

19%

15%17%

19%

16%

Segmentation of UK familyCluster 1Cluster 2Cluster 3Cluster 4

Cluster 1: lacking 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: living healthily

Cluster 5: strong parenting skills but need to make changes

Cluster 6: plenty of exercise but too many bad foods

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

Carbohydrate(of which sugars)

11.7g (of which sugars 10.8g)

13g (of which sugars 12.1g)

11.9g (of which sugars 10.4g)

13g(of which sugars 9g)

Protein 4.7g 3.7g 5.1g 5.0g

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)

1g (of which saturates 0g)

Fibre 0.1g 0.1g Trace 0g

Sodium 0.08g 0.1g 0.1g 45mg

Calcium 140mg 108mg 200mg 20%

Positioning: Developing the image of our product in consumer’s mind

Nutrition info of main competitors

Age

Nutrition

5-10yrs

0-5yrs

Focusing on kids from 5-10Offering nutrimental LifestyleDeveloping energetic kids

Nutrition-Age Axes

Price

Nutrition

HealthyPositive

Optimistic

We worth it !

Brand Reputation-Price Axes

Implementation Control: Assessment of the overall strategy

Continuously questions the basic direction of the strategyType 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