About danone uk limited - Free Essay Example

EXECUTIVE SUMMARY Activia and Actimel are the two probiotic yoghurt brands that are currently being marketed by Danone in the UK. The current market strategy for these products is that they are healthy food and part of a healthy lifestyle. Some modifications were made in the currents marketing strategy, which include modifying the current target market for both brands. These brands have the potential to make Danone UK Limited the market leader in the United Kingdom. 1. DANONE: THE PROBIOTIC BRANDS; THE PRESENT AND THE FUTURE. Danone UK limited, is a UK based subsidiary of the French company group Danone, which has its organizational headquarters situated in France. Danone UK is into the production and marketing of dairy products and water. Most of group Danone brands are household names in the United Kingdom and internationally, and they include the probiotic dairy brands; Activia and Actimel (DATAMONITOR, 2009). The dairy division of the Danone group, is a leader in the production of dairy products worldwide, and presently holds about 22% of the dairy products global market share (DATAMONITOR, 2009). Group Danone has different subsidiaries in varying countries and each brand has a unique attribute and name that appeals to the region or country where they are marketed. 1.1. SWOT ANALYSIS The strength, weakness, opportunities and threats that are currently influencing Danone UK are highlighted in the table below. Table: 1 STRENGTHS * Health conscious company * Innovative Products and marketing * Customer oriented Research focused WEAKNESS * Lack of long term planning * uncorroborated claims OPPORTUNITIES * Health consciousness among populace * Growth in awareness on digestive health Probiotic bacteria awareness THREATS * New entrants * Increased competition * Stores own brand * Increase in cost of milk and production * Consumer unawareness on benefits of good bacteria * Government regulation on health claim of probiotic brands 1.2. PEST ANALYSIS GRID The grid below highlights some of the factors that affect the market presently and therefore gives an idea on the way forward in the present market environment. Table 2: POLITICAL ECONOMIC SOCIAL TECHNOLOGY Government debt Recession Unemployment Trends in Research Government policy Research sponsorship Advert withdrawal E-commerce Cold weather New technology Migration 2. MARKET ANALYSIS: UK YOGHURT MARKET The UK yoghurt market comprises of the spoonable yoghurts (pots), drinkable yoghurt (drinks) and tube yoghurts. (Mintel Oxygen, 2009) The market share value of the drinking yoghurt has seen a decrease in recent years as more people turn to more healthy option of yoghurt products that more often come in pots and tubes; the tube yoghurt is more attractive for children as parents can pack it into lunch boxes for them, thus this area has also seen a significant growth in recent years. The pots yoghurt market saw an increase in sales as they offer fewer calories and some come with health claims that lead to an increase in sales, the most active category in recent time has been the probiotic or healthy yoghurt category (spoonable) (Euromonitor,2009). Development of new products and increase in sales in some categories of the yoghurt market have mostly been due to health issues, as the behaviour of consumers suggest that they prefer a healthy lifestyle and also love to indulge, thus the development of new products that offer both a healthy and indulgence option. This trend has lead to the improvement in performance of the yoghurt market generally, in comparison to other desert options. The yogurt and Fromage Frais (pots and tubes) currently hold about 15.60% of the dairy market share in the UK (Data Monitor, 2009). The pots and tubes are the best performers in the market, and they hold about 85% of the market share, while the drinking yoghurt has been largely affected by competition from other markets that offer or claim to offer a more healthy option in form of drinks e.g. smoothies and fruits juices (or soft drinks). 2.1. MARKET SEGMENTATION Majority of the market share for 2008 as seen above was held by top manufacturers which include Muller, Danone and Yoplait. Supermarkets own brands are gradually gaining a large percent of the market share, with other brands constituting about 27% of the total market share. The probiotic yoghurt brands of Danone UK are doing well in the market currently, and account for about 19% of the UK yoghurt market share. 2.2 COMPETITOR ANALYSIS Muller dairy UK is Danone UK main competitor and the current market leader. Muller has being the market leader for a while and they function across the entire yoghurt category. Some of the Muller brands are not doing so well in the market, with some consumers perceiving it as too sweet and unhealthy, but with recent brand repositioning, re-launches and new products introduced in the market they are able to continually hold onto the number one spot. Weakness: The major weakness of the Muller brands is that consumers still perceive them as unhealthy, as they usually have high sugar content (Mintel Oxygen, 2009). 2.3 COMPETITIVE ADVANTAGE: Danone Has exclusive patent on the friendly bacteria (Lactobacilli casei Imunitass) used in addition with other bacteria in Actimel. All probiotic brands by Danone are considered healthy, hence the first choice for consumers who prefer a healthy way of life. 3. BRAND POSITIONING Probiotic yoghurts contain live bacteria that positively aid the consumers digestive system by improving microbial balance in the intestine. The probiotic brands Actimel and Activia are in the spoonable (Activia), drinking (Actimel) and the healthy option categories. In comparison, some major competing brands are perceived as unhealthy with great taste and very sweet e.g. Muller brands are perceived as unhealthy due to the sweet taste and the fact that the brands are positioned as all day snacks (Euromonitor , 2009). PERCEPTUAL MAP Healthy Actimel Activia Muller Vitality Poor taste Great taste Muller Light Unhealthy 3.1 ACTIVIA Activia is in the class of spoonable yoghurt (pots), and is in the healthy brand category. It contains the probiotic bacterium (friendly bacteria) that helps in improving the functions of the digestive system. Activia comes in fat free and low calorie flavours that consumers see as a great benefit; thus Activia has seen a rapid increase in market share since its launch in 2002, and it is one of the best performers in its category due to innovation which comprises health benefit and indulgence (Mintel Oxygen, 2009). It has a wide range of flavour in packs of four and eight pots and recently it has been proposed to introduce single pots for people with a busy lifestyle or people on the go. 3.2 ACTIMEL This is in the drinking yoghurt category, and contains the probiotic bacteria L.casei Imunitass; its main function is boosting and providing support for the immune system. Actimel has 13 different varieties, and 4 have zero percent fat content. Actimel aids the bodys immune system by fighting off germs when consumed on a daily or regular basis (Danone, 2009). 3.3 BRAND PERSONALITY GRID The consumer perception of Activia and Actimel are highlighted in the personality grid below (Table 3 and 4). ACTIVIA PERSONALITY VALUE BENEFIT ATTRIBUTE Physically fit Quintessential Indulging Wide variety range Healthy Innovative Convenient Handy Delightful Trustworthy Rich taste Relieves bloating Reliable Variety ACTIMEL PERSONALITY VALUE BENEFIT ATTRIBUTE Healthy Nutritious Boost immunity Wide product range Tasty Trusted Rejuvenation Different flavours Immunity Reliable 4. TARGET MARKET AND STRATEGY: THE PRESENT AND THE FUTURE Target Market Activia Women ACTIMEL Senior citizens Adults Rest of population 4.1 MARKETING STRATEGY (PRESENT SITUATION): The Probiotic brands are currently marketed as health beneficial products, with the emphasis on good bacteria, and the need to see the brands as part of a healthy way of life and not just as a snack. 4.2 ACTIVIA The current marketing strategy for Activia focuses solely on women and it was put in place in response to consumer demand for healthy products. Activia is positioned as an indulgent healthy food that helps women in reducing the feeling of being bloated especially after meals, and also aids in regulating the function of the digestive system. In a recent advert a woman is seen feeling more physically fit and flexible after having a pot of Activia. An interactive website has also been set up for Activia and the content is specifically for women as it gives them health tips and encourages them to share their story on the benefits of Activia. The website has a health based outlook that further reinforces the fact that Activia is a healthy brand. (Danone , 2009) Adults on the go are gradually being included in the current strategy, with the plan to introduce single pots of Activia (Mintel Oxygen, 2009). 4.2.1 DRAWBACK This strategy targets only the women in the population, and in some ways most women in a particular age demographic i.e. 25 and above. Although this strategy has been successful so far; what steps can be taken to prevent the present segment of consumers from shifting loyalty to a brand that is healthy, of good quality and is priced lower. What can be done to increase the present target market, as large segments of the population which include children, active adults and the elderly have not been included in this strategy. 4.2.2 MODIFICATION As manager of the probiotic brands of Danone UK Ltd, I will increase the target market to include families and the elderly. The family market will include children and men, while the elderly include men and women from age 55 and upwards. This segment of the population (55+) is going to see a rapid increase in sales and market share in the future as the population ages, and with the right marketing mix of price, distribution and place, this target segment offers great potential of growth for the future of the market (Mintel Oxygen, 2009). The family segment will come with a rebranding option that will target the women who have families. As women do most of the household shopping, when they buy Activia for themselves, they will have no option but to buy for their families. More flavours and packaging should be introduced to appeal to children and their parents. The current marketing strategy for the women consumers also have to be continued and improved to make the customers remain even when offered cheaper varieties, and to do this, loyalty programmes have to be introduced i.e. where consumers gain points for each pack of Activia bought. Although this might seem expensive for the company at the start of the program, as it has to be in conjunction with supermarkets, but in the long run it will be advantageous as we would have gained a loyal customer base. The present website also has to be improved to include healthy recipes tips as women love to cook healthy for their families. An interactive educational website should be introduced for children; activities on the website can include opportunity for children to pick their favourite Activia flavours, competitions that will include one where kids get the opportunity to mix different fruity flavours and submit their entries online, with opportunities to win prices. When children are loyal to their favourite brand (Activia) parents will have no choice but to also become loyal, in that way we also get families to be consumers of the Activia brand. Thus our market share will see an increase that will come from this segment of the population. 4.5 ACTIMEL The current marketing strategy for Actimel is capitalising on the immune system boosting characteristic of the probiotic bacteria in the drink and also the claim that it improves the body capacity to combat stress for people with busy lifestyles, through the action of the bacteria in the gut. In recent times, the company has also aimed to encourage the use of Actimel by patients in the hospital as a recent study shows that Actimel has the capacity to aid patients fight off infections. Advertising and promotional activities by Danone on Actimel has helped to boost the image of this brand by placing it as a brand that supports active lifestyles and is also healthy. 4.5.1 DRAWBACK An advert for Actimel was recently banned by the Advertising Standards Authority (ASA), that the claims made by Danone on Actimel (that it boosts the natural defence of children) were not supported by sound scientific evidence (BBC, 2009); a few consumers will brand Actimel as untrustworthy. To restore the image of Actimel, scientific evidence that proves that it helps boost the natural defence of children has to be peer reviewed before publishing. Although some health professionals have said it improves immunity, this has to be reinforced so the customers can have trust in the brand. The target population for Actimel has to re-defined, as it is currently vague (covers the whole segment of the population). 4.5.2 MODIFICATION The target market for Actimel has to be clearly defined, as it seems to target all the members of the population at the moment. The population has to be segmented, and each segment given a definite strategy and marketing plan that is specific for it. The proposed target market will be segmented as shown in fig 4. There is a lot of potential in targeting the elderly and hospital patients, as they need things to help boost their immunity, and Actimel can perform that function, hence there is an opportunity of growth here. The current market strategy of positioning Actimel as a healthy lifestyle choice is great, and will work well with all segments of the population especially the adults with an active way of life. The brand should be repositioned in the children segment, as the problem with the advert can affect sales that are generated. Thus positioning it as a healthy option for children, that offers the benefit of friendly bacteria, with proven scientific studies will enable Actimel regain the trust of consumers from this segment of the population. 5. CONCLUSION Actimel and Activia have been doing well so far in the UK market, and have the potential to do better in the future. The current marketing strategies for these two brands need to be improved on. The segmenting of the target population for Actimel will give a clearer view of the market strategy put in place to enable it gain more market shares from competitors like yakult and Muller vitality. The target market for Activia will need to be expanded in order to enable Activia gain market shares in the mainstream yoghurt market. It is perceived as a healthy brand, thus it has the potential to get more market share if the target population is increased. In the future the customer base of Activia and Actimel will remain loyal as loyalty schemes will be introduced to enable them stay faithful to the brand as long as the option of indulgence and healthy living at the right price is offered. New flavours that will keep consumers interested and innovative products will definitely make and keep Danone as a leader in the UK yoghurt market. References BBC. (2009, October). Healthy yoghurt advert banned. Retrieved December 1, 2009, from News Website: https://news.bbc.co.uk/1/hi/uk/8305918.stm Danone . (2009). Danone Activia. Retrieved December 29, 2009, from Your digestive health matters website: https://www.danoneactivia.co.uk/ Danone. (2009). Actimel L.casei Imunitass. Retrieved November 30, 2009, from How Actimel Can Help You: https://www.actimel.co.uk/Benefits/Default.aspx Danone UK Ltd. (2008). Danone. Retrieved November 30, 2009, from About Danone Mission Website: https://www.danone.co.uk/mission.htm DATAMONITOR. (2009). GROUPE DANONE. London: Datamonitor. Euromonitor . (2009). Yoghurt United Kingdom. London: Euromonitor International. Mintel Oxygen. (2009, May). Yogurt UK May 2009. Retrieved November 27, 2009, from Market Share and Product Positioning website: https://academic.mintel.com/sinatra/oxygen_academic/search_results/show/display/id=393957/display/id=460332#hit1 Mintel Oxygen. (2009, May). Yogurt UK May 2009. Retrieved November 27, 2009, from Segment performance website: https://academic.mintel.com/sinatra/oxygen_academic/search_results/show/display/id=393957/display/id=460332?select_section=460331 Mintel Oxygen. (2009, May). Yogurt UK May 2009. Retrieved November 28, 2009, from Table of content website: https://academic.mintel.com/sinatra/oxygen_academic/search_results/show/display/id=393957/display/id=460331?select_section=460345