T ANG E XPANDS ITS U NIVERSE ! Presented by: Melisa Fryman and Yu Chen

T ANG S ALES B LAST O FF W ITH NASA Originally invented and marketed in the U.S. in 1957 by General Foods. Kraft Foods acquired Tang and used NASA as a marketing tool. In 1962 Tang was adopted by the space program to improve the taste of drinking water produced as a byproduct of the life support system in the Gemini space craft. In 1968 Tang sponsored ABC’s network coverage of America’s first manned flight around the moon - Apollo 8 mission. Early Television Promotion Strategy:

T ANG M ARKETING S TRATEGY G OES G LOBAL 25 years ago Kraft began marketing Tang to China to mothers who believed children needed more nutrition and found water boring - Tang fit their needs. In 2006 sales including the China market grossed $500,000. Beginning in 2007 an aggressive international marketing campaign known as “Winning Through Focus” implemented in new markets. “ Tang makes water more exciting ”

S. W. O. T Strengths: 1. Market penetration - Tang holds the largest powder drinks market share in China. First introduced to China in 1986 Tang = the powdered fruit drink And the powdered fruit drink = Tang

Tang Makes Water More Exciting 2. Tang is creating new products and engaged in indigenization. m/programs/view/p2 3sQQ89oTI/

D ISTRIBUTION 3. Kraft has its own Tang manufacturing facilities in Tian Jing, Su Zhou and other districts, which guarantees the distribution of the product. Tang has its own unique distribution method in China.

Weakness:  Price: The price of Tang is higher than other similar products.  Cost: Raw material costs and labor costs have increased, so the production costs have also increase. S. W. O. T

Opportunities:  Currently, salaries are higher than before, so consumption ability has increased.  The demand of healthy food has increased.

S. W. O. T Threats: 1.Competition and challenges from other drinking products. 2.Now people are changing their attitude towards drinks.

R EBRANDING T ANG IN NEW MARKETS Kraft’s Tang sales doubled in the last 4 years to $1billion. 2/3 of Growth comes from new flavors, sizes & packaging in five new markets: Argentina, Mexico, Brazil, Philippines & the Middle East. Innovative flavors cater to local tastes. Kraft’s acquisition of Cadbury in 2010 assisted growth by opening up more distribution channels- corner stores to core Tang markets.

M ARKET C USTOMIZED P ACKAGING Affordable, convenient packaging unlocks growth. Traditional canisters were too big in some markets. Smaller 2 liter sizes were made for Mexico priced below 50 cents USD, and single-serve sizes were made for the Middle East.

N UTRITION AND L OCAL C ONTROL Giving local leaders from target markets freedom to act as entrepreneurs was a main factor to the success of Tang in developing markets. They use a “glocal” approach, combining global and local expertise. Nutrition and tastes were customized for local markets. In addition to the basic formulation with vitamins C and A with minerals, Iron was added in Brazil and the Philippines.

M ACROENVIRONMENT Kraft’s Marketing Strategy included manufacturing Tang in the countries of the new international markets: Brazil, the Philippines, and China. The Economic Environment effects consumer purchasing power. Value marketing offers consumers in developing markets quality at a fair price. Results: lowered selling price in market segment, and employment that provides increased income to increase overall sales. Tang Manufacturing Facility in Pernambuco, Brazil (1of 6) Opened in May of 2011, employing 800 locals, and providing an economic benefit to society. Latin America is the largest international market for Tang.

K RAFT P UBLIC R ELATIONS Tang Goes Green New standardized powdered beverage pouch size in Latin America eliminated 3 mil. pounds of package refuse annually. Dry mix packaging uses less materials than bottled beverages. Tang launched the “Prep, Drink, Do” Public Relations campaign in Brazil (2010) and recently in Mexico. 90,000 kids joined the “Green Brigade” for package recycling. $10 million donation to Bangladesh & Indonesia To eradicate childhood malnutrition by empowering women with agricultural education and creating microcenterprises for sustainable farming. This is an investment in the region with expectations of future sales of food products.

S UMMARY The corner stone of the marketing strategy in the international markets was more autonomy for local leaders. It allows the company to act like a small operation in– country, while leveraging its scale as an international firm. Ideas from the local leaders assisted Kraft in packaging and flavor/formulation decisions. Market research in the developing international markets was key for producing products that fit the cultures. Initially, China preferred powdered drinks by the glass not the pitcher. Flavors to fit the cultures were essential to boosting sales. In 2009, after introducing new specialized flavors to specific regions, sales jumped from a meager 4% growth in 2008, to a 42% increase in Latin America and 25% increase in Asia Pacific markets. Building manufacturing facilities in new markets reduced costs of production, provided jobs for local residents and increased incomes and buying power of those residents. Thus, increasing sales of Tang in those markets.

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