in China

Chi T. leCase Studies

Prof. Theresa Bauer

CONTENT

• Introduction• The company• The product

• Challenges• Strategy• Solutions• Results• Conclusion

NABISCO & KRAFT FOODS

• In 1898, Nabisco founded - America cookies & snacks manufacturer• In 1912, announced The ‘Trio’: Mother Goose Biscuits,

Veronese Biscuits and Oreo Biscuits• In 1980s, merged with Kraft Foods by Philip Morris

Companies, Inc.• In 2000, whole Nabisco is merged with Kraft

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

OREO• Born on March 6th, 1912 100-year existence• “Two beautifully embossed chocolate-

flavored wafers with a rich cream fillling at 30 cents per pound”

• “America’s best loved cookie”, now Global brand

• "Oreo Biscuit” (1913)." "Oreo Sandwich" (1921) and "Oreo Creme Sandwich” (1948)

• Launched in China in 1996 2005 failed market research implemented…

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

OREO’s Problems in CHINA

• China: Not cookie eaters but WAFER EATERS• Oreo:

• A little bit too sweet and a liitle bit too bitter alien taste• 72cents/14 oreos = expensive

• Company:• Kraft Food paid little attention to Chinese consumers (Tastes according to

producers, not to consumers)• US centric-mindset and approach:

• Existing US product • US formulation & specifications • US-inspired advertising

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Strategy Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Become #1 Sweet Snack brand in China Vision

Formulate for Chinese consumers Quality

Appeal to different purchase occasions Channels

Reframe to be more than just sandwich cookiesInnovation

Localized to drive relevance, Boost advertising & promotingAwareness

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Quality: Formulate for Chinese consumers

Smaller package Lower price Wider customer

range

Cooling Oreo

Double fruits Oreo

Different flavours

New price points and channels

Christmas Package

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Lunar New Year Package

Channels: Appeal to different purchase occasions

“OREOless” Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Innovation: Reframe to be more than just sandwich cookies

Oreo Wafer

Oreo Straw-shaped Wafer

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Awareness: Localized to drive relevance

Interactive “Twist, Lick, Dunk”

Lottery Prizes

YaoMing as Representative

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Awareness: Localized to drive relevance

OREO rocks!

Commercial PowerAwareness: Boost advertising & promoting

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

“Twist, Lick, Dunk” – “???”Awareness: Boost advertising & promoting

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Results

• Oreo’s sales doubled in China, then doubled again, and again. • 2011 became the best-selling cookie in China. • Market share grew by 10 times over the past five years. • Oreo model in China has become the company’s model

for all its other products. • “Fantastic beef stew” and “very spicy chicken” Ritz crackers• different formulation for Chips Ahoy cookies which has been

tripled over the last few years

• Most important lesson!

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

Understand how cultural differences influence your

business

“Any foreign company that comes to China and says, ‘There’s 1 1/2 billion people here, goody goody, and I only need 1 percent of that’ … [is] going to get into trouble. You have to understand how the consumer operates at a really detailed level.”

Lorna Davis, head of the global biscuit division at Kraft

Introduction The company The product

Challenges

Strategy

Solutions

Results

Conclusion

References

• S. Clements, T. Jain, S. Jose, B. Koellmann. (March 31, 2013). Smart cookie. http://businesstoday.intoday.in/story/how-kraft-foods-won-over-customers-in-china-and-india/1/193162.html

• Jeff Beer. (Nov 22, 2012). Marketing to China: Oreo’s Chinese twist. http://www.canadianbusiness.com/business-news/industries/marketing-to-china-oreos-chinese-twist/

• R. Smith. (January 27, 2012). Rethinking The Oreo For Chinese Consumers. http://www.npr.org/blogs/money/2012/01/27/145918343/rethinking-the-oreo-for-chinese-consumers

• Wikipedia, Google Image & Google Translate

THANK YOU FOR YOUR ATTENTION!Any questions?