2 2. Capturing Marketing Insights – the internal environment ??? Consultants2. Capturing Marketing Insights – the internal environmentThe most relevant Strategic Capabilities – a resource audit of Danone Yogurt UKFactorTrendImplicationEvaluationPhysical ResourcesProduction 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 productDanone 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 major strengthHuman ResourcesThree 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 strengthFinancial ResourcesAccess to capital is crucial for launch of new product and large marketing campaignStrong financial position with parent Danone Group making EBITDA £2,445m+ 2 significant strengthIntangible ResourcesHigh brand awareness and customer trustworthiness essential in the mass market competitionInnovation 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 UKGlobal Danone R&D for new product worldwide and UK lab to product adaptation to local taste+ 4 significant strengthMention limitations of the internal analysis: no recent analysis published after merger with D&A, Boots Opticians owned by Boots + D&A no detailed published information available
3 Ext. Opportunities and risks ??? Consultants3. The Strategic SWOT analysis – identifying the alternatives for future successExt. Opportunities and risksNational campaign against obesityGlobal trend to more healthy foodEmergence of new ingredientsChanges in consumer lifestyle (healthier behaviour)UK shows sight of recovery (0,8% from July to Sept, strongest growth since 2010)Internal Strengthsvery innovative R&D labsExcellent brand reputation for quality and tasteAmong of cash available to launch of new productsLarge portfolio of products not all present in the UKExternal ThreatsStrong competition in the adult Yoghurt market n°2 behind MullerPrice-sensitive buyerHigh substitution possible in desert and snack segmentsIncreasing price of raw materialsInternal WeaknessesNew distributor (after a massive failure in June 2013)Lack of flexibility (huge organisation)Decrease in internal efficiency
4 ??? Consultants3. The Strategic SWOT analysis – identifying the alternatives for future successDifferentiation StrategyCreate a close relationship with consumer (Yoghurt day, fidelity program,…)Product development strategyExtend portfolio kids productsCreate a pleasure focus products (less healthier, better taste)Create man focus recipeMake vegetarian rangeMarket Penetration StrategyNegotiate larger space in Yoghurt section in super marketIntegrate Danone Yoghurt in lunch deal (Costa, Market Place, Food Truck,…)Cost Leadership Strategy‘Low-price/price promotions’ to increase market share thus strengthen position
5 ??? Consultants 4. Strategic choose Strategy choice : Product development and penetration strategyProduct development : Launch a yoghurt specialy design for kidLow cost of development as the product already exist in the Danone portfolio in other countryNational awareness on the importance of a vary alimentation for children as a mean to struggle against obesityGood understanding of the population of the importance of Calcium and vitamine D to help the growthA 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 foodUse 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
6 3. Segmentation: How segmentating a kid market ? - Yoghurt for kid 1/3 ??? Consultants3. Segmentation: How segmentating a kid market ? - Yoghurt for kid 1/3Kid market can sometime difficult to segmentThe percentage of children who did sport in the last 4 weeks, by age and sex, 2010/1% boys% girls5 to 10 years87.882.911 to 15 years9791.9The percentage of children who need calcium and vitamin D to grow% boys% girls5 to 10 years10011 to 15 yearsSources: Office for National Statistics, National Records of Scotland and Northern Ireland Statistics and Research Agency
7 3. Segmentation: How segmentating a kid market ? - Yoghurt for kid 2/3 ??? Consultants3. Segmentation: How segmentating a kid market ? - Yoghurt for kid 2/3The solution : the family behavior (with a focus on mother) !Cluster 1: lacking time, money and knowledgeCluster 2: lack the knowledge and parenting skills to improve their family’s lifestyleCluster 3: affluent, overweight families who over- indulge in unhealthy foodsCluster 4: living healthilyCluster 5: strong parenting skills but need to make changesCluster 6: plenty of exercise but too many bad foodsSources: Source: TNS Childhood Obesity Consumer Segmentation Research
8 4. Segmentation: How segmentating a kid market ? - Yoghurt for kid 3/3 ??? Consultants4. Segmentation: How segmentating a kid market ? - Yoghurt for kid 3/3More details on our main cluster.Custer 4Custer 5Custer 6Family dietStrong interest in healthy diet.Strong parental control but diet rich in energy-dense foods and portion size an issue.Eating motivated by taste, diet includes both healthy and unhealthy foods.Physical ActivityFamily active although believe children not confident doing exercise.Know they need to do more: time, money, self-confidence seen as barriersActivity levels are highSocial classABC1C2Intent of changeLow intent to change but already leading a healthy lifestyle.Low intent on diet but significant intent to change on physical activity.Highest among the clusters for both diet and physical activity.Sources: Source: TNS Childhood Obesity Consumer Segmentation Research
9 76% of potential customers ??? Consultants4. ‘Differentiated’ Targeting: Focus on the most promising segments!A targeting strategy: DifferentiatedCluster 1Cluster 2Cluster 5Marketing Mix 1Marketing Mix 2Marketing Mix 4Cluster 6Kids YoghurtMarketing Mix 3Cluster 3Cluster 4Marketing Mix 576% of potential customers
10 4. ‘Differentiated’ Targeting: Focus on the most promising segments! ??? Consultants4. ‘Differentiated’ Targeting: Focus on the most promising segments!A targeting strategy: DifferentiatedCluster 4: living healthilyCluster 5: strong parenting skills but need to make changesCluster 6: plenty of exercise but too many bad foodsDistinct:Strong interest in healthy diet, active but not focus on sportSignificant intent to change on physical activity and diet rich in energy-dense foodsActivity levels are high and diet drove by tasteAccessiblethrough multi-platform advertising campaign on importance of yoghurt in children healthy dietthrough multi-platform advertising campaign on importance of yoghurt for healthy sport performancethrough multi-platform advertising campaign on importance of yoghurt for healthy sport performance / store promotionMeasurablethrough age groups of mums (mainly year-olds) and the social class (AB)through age groups of mums (mainly and year-olds) and the social class (C1)through age groups of mums (mainly year-olds) and the social class (C2)Profitableprice premium for superior qualitysegment stands for 19,1% of consumer marketStrong wiliness of change their diet
11 5. Defining the Marketing Mix – the 7Ps for achieving success ??? Consultants5. Defining the Marketing Mix – the 7Ps for achieving successCluster 4: living healthilyCluster 5: strong parenting skills but need to make changesCluster 6: plenty of exercise but too many bad foodsProductdrinkable yoghurts (30g)Rich nutrition (high quality)Natural flavourclassic yoghurts (50g)New flavourIn large batchGenerous flavourPricePremium PricingMarket PricingCompetitive PricingPlaceIncrease stores presence (on street and on line)PromotionCreate a trendy brand for the children (“you’re cool if you have it”) with advertising campaign to support itTV& online adsPartnership with primary school. Take the Danone kids yogurt as a break time dessertPublic Relationship campaign on the importance of yoghurt to children healthy diet (campaign in children medical centre, special web site to help mother to cook healthy diet, specialized press )Sales promotion of “family packs”(yogurts for all family members, including parents and kids) and 3 for 1 discount.Public relationship on the importance of a daily yoghurts for kids to practice sport (explicative tv/radio spot with a moral support)Provide free trial yogurt in Parks, sports club etc.Public relationship on the importance of a daily yoghurts for kids to practice sport (explicative tv/radio spot with a moral support) and in sport club (which are frequently use by the mother.
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