Oreo 2.7

Oreo Pricing

     For different markets, different pricing tactics were used by Oreo. So, as an example, I would like to choose an Indian market because it is the biggest cookies market in the world. In 2011 when Oreo entered the market the goal was to draft the market and individuals about its entrance and in this manner, the cost was kept as low as possible. This was done because not a lot of people knew what Oreo is and high price might terrify them. Therefore, at the beginning price was as follow:

Rs.5 for a pack of 3 Oreos

Rs.10 for a pack of 7 Oreos

Rs.20 for a pack of 14 Oreos     

(1 Euro = 76 RS)

     However, after Oreo top 3 market share brand, they increase price and it became as follow:

Rs.5 for a pack of 3 Oreos

Rs.15 for a pack of 7 Oreos

Rs.35 for a pack of 14 Oreos

(1 Euro = 76 RS)                                                                                                              (The World of Oreo, 2014)

     Nowadays, a company is well-known because of its promotional campaign. However, it is more about social media marketing than about price-related promotion. Because according to my previous work the ideal Oreo customer is a kid around 10-14 years’ old price for them not that important in any case they will ask their parents to buy the cookies for them with or without discount. However, Oreo also targeting families as their customers and for them the price is important. Therefore, Oreo always creates some general price-related promotion like discounts, more Oreo for old price, etc.

     The biggest influence on price from marketing mix has a promotion. Oreo becomes such a popular brand mostly because of promotion. In Oreo advertising where used very popular sportsman’s like sisters Williams, football players, etc. The majority of the Oreo marketing campaigns are extremely expensive so in order to make some profit Oreo put the price on its product higher. (Bhasin, 2016)

     It is important to mention that Oreo is price elastic. In 2015 Oreo increased their price by 3% while quantity demands failed by 9%             (-9%/3%=3%) 3>1 so Oreo is elastic. Because Oreo cookies are sold in more than 100 markets it is obvious that it uses price differentiation. Again examples from Indi where 3 Oreo cookies cost 7 cents and America where the same product cost 2,5 euro. However, if we took price differentiation inside one market, Oreo don’t use it, but don’t explain why. (Faulkner, 2015)

References

Bhasin, H. (2016, December 4). How marketing mix affects pricing decisions? Retrieved from Marketing 91: http://www.marketing91.com/marketing-mix-affects-pricing-decisions/

Faulkner, H. (2015, March 20). Oreo. Retrieved from Prezi: https://prezi.com/d7a3v3g5mv3g/oreo/

The World of Oreo. (2014, September 18). Pricing. Retrieved from The World of Oreo: https://milksfavouritecookie.wordpress.com/2014/09/18/pricing/

Oreo 1.7

Oreo Marketing planning and forecasting sales potential

I will use break down approach (based on market potential and general economic data) to estimate sales potential. First of all, the market size of packaged food in the Netherlands (only sweet snacks) has a downward trend. As you can see from the Euromonitor table in 2013 the market size was almost 800-million-euro while in 2015 it was just under 770 million. In comparing with other countries, of course, it is not that big market, moreover, Oreo is not a market leader in the Netherlands, even more, the competition rate is very high on this market. In addition, Oreo is expensive cookies while people in the Netherlands very sensitive to price and the price might influence their decision.

(Euromonitor, 2016)

To improve the current situation, I recommend for Oreo to write a marketing plan for the Dutch market. Because Oreo is a market leader in biggest markets in the world (USA, India, etc.) for them it might not be a problem to become a market leader if they will aim it. However, I don’t recommend to put a lot of affords for it and the main reason is because it is a very small market. If for example, Oreo will give some top managers from India or the USA it might damage their position at a few times bigger markets. However, if Oreo has an opportunity to create a high-quality marketing plan without damaging themselves I recommend to cover this aspect:

-        Flavor which Dutch people like more

-        Investigate age of perfect customer

-        Price which Dutch people ready to pay for the cookies

For forecasting, I will recommend using Survey method because it’s cheap, and at the same time demonstrate high representatives. However, Survey has Inflexible design and it is possible inappropriateness of questions.

References

Euromonitor. (2016, December 23). Statistics. Retrieved from Euromonitor: http://www.portal.euromonitor.com.saxion.idm.oclc.org/portal/statistics/tab

Oreo 2.6

Oreo Services Marketing

     Oreo focused completely on its products and offer almost nothing as service. However, the only service which Oreo is giving is the excursions to their factories. In this work, I will use 7P’s model in order to create a marketing mix for this service.

Product. Oreo has 21 factories but only 3 of them are available for visiting. Usually, they give an excursion to school kids and people who won an opportunity to visit Oreo during Oreo promotion events.  

Price. It is for free, however, victors paying for transport or use their own.

Promotion. A tour is a tool of promotion it pushes Oreo lovers to buy even more Oreo to get bigger chance to visit one of the Oreo factories. For schools, it is one of the Oreo charity events.

Place. Location, where the biggest amount of tours occur, is Canada, Montreal, Viau street.  

People. It is no information at the official website and across the internet about the special employee involved. However, it is logical that the regular workers and a tour guide are involved.

Physical Evidence. The visitors are able to try whatever they want from the available Oreo products, also, it during the excursion it will be an interactive guide for people “how to cook Oreo cookies at home”.

Process. You need to send the unique code by the website and if you win you will get all instruction about time and place. If it is a school trip you need to contact Oreo office to put your school on the line.

(Banerjee, 2012)

I don’t see any services that Oreo should offer. It is a market leader in a lot of countries and well-known brand. However, it would be great for fans to visited the factories. I recommend to Oreo create tours for people who want, of course not for free.

The intangibility of this service is obvious. You cannot touch or smell the tour. You would be only able to order it on the Oreo website.

Inseparability isn’t really occurred, because you order a tour and you have to wait until enough people will order the same one.

Perishability is related to inseparability because it is impossible to give a tour without people who order it. Also, I believe that it won’t be extremely popular and if somebody wants to visit the factory he/she need to wait until group will be full in another case it will damage the profit of the company.

Variability of this service is not important for our type of service. You don’t need any representatives of the company if you want to visit factory alone or with friends. All information will be given at the website.

     It is important for the company to provide qualitative service. For the tour, it is not that hard. For example, it is important to have a skilled guide person. This person has to be able to work with children, to have more than average communication skills and be able to answer all types of question (had knowledge not only about Oreo but also about technical part). Moreover, it would be nice to create as much interaction as possible. It doesn’t matter you give a tour for children or adults everybody who visited this kind of excursions would like to interact to be involved in the process, etc.   

     Oreo is selling in more than 100 countries across the world. It is a well-known brand with a reputation of the qualitative product. It is important to mention that Oreo becomes popular because of marketing campaign “twist lick dunk” and know it created new one – “racing”. I believe that now Oreo is not selling only at the countries of the 3ed World (with the lowest economy) and I will not recommend exporting there at all. However, if it is a task and if it is necessary to export I would at least not do any expensive promotions in order to sell cookies at the lower price for people to be able to buy it. Also, people at the under developing countries might have no idea what is Oreo and in this case, I would recommend to give for a free one pack of Oreo just for people to try, to create a stimulus to buy cookies. (The World of Oreo, 2014)

     Regular personnel doesn't have a big influence on Oreo. Oreo factories are robotized and don’t need a lot of stuff, just to control robots. Also, there is no face to face communication with clients which let workers be less qualified. However, in highest levels of management only best of the best professionals have to be. Because it is a huge company, it is hard to control and take a decision. Moreover, the majority of the loyal customers like Oreo because of advertisement, therefore, advertising department have to be extremely qualified.

References

Banerjee, S. (2012, March 1). Inside the Oreo. Retrieved from Arts&Life: http://thechronicleherald.ca/artslife/68901-inside-the-oreo-factory-opens-doors-for-cookies-100th-birthday

The World of Oreo. (2014, September 20). Integrated Marketing Communication. Retrieved from Milks Favorite Cookies: https://milksfavouritecookie.wordpress.com/category/uncategorized/

Oreo 2.5

Oreo Chanel Players and Physical Distribution

      It is important to mention that I am going to compere 2 supermarkets in different countries. The Netherlands and USA.

Photo and data from America were given by my friend who is living there nowadays.

First of all, it is obvious that in America Oreo is a market leader. You can see that supermarket create some decoration to underline BRAND not a cookie. However, at the Nederland supermarkets not only don’t give some personal space for a product but also put the main competitors (like Milka) near. Strategy of both Dutch and USA supermarkets have pros and cons. But for the Oreo cookies of course it is better to have no competitors near them and be underlined by special decorations like it is in America. The location of Oreo in the PLUS is at the end of supermarket while at United supermarket – directly at the middle.

Secondly, shop atmosphere. According to my friend it is no atmosphere at American supermarket at all, no music, employees in gray clothing, but it is New Year atmosphere near Oreo and this big difference might be even better for Oreo because from grey everyday life person come to shave with Oreo and fill the atmosphere of the holiday. Differently, in PLUS there is nice atmosphere, everything is colorfully, employees waring green clothes.

To be honest, for Oreo this factors is not important at all. Because you can buy Oreo everywhere. 

Oreo 2.4

Oreo Distribution Channel

Oreo is also relying on strong distribution push to make its presence felt in India under Cabbury. The brand is focusing both on modern and retail trade.  As we know that the various levels of marketing Channels for any product which can be zero, one, two, three depending upon how the product flows from manufacturer to consumer.

Oreo in this case uses a hybrid of  level 1 and  3 for consumer marketing channels.

PRODUCER —–> RETAILER —-> CONSUMER    (LEVEL1)

PRODUCER —–>DISTRIBUTOR—-> RETAILER —-> CONSUMER (LEVEL3)

Cadbury the manufacturer of Oreo in India, produces it and then directly send it to the retailers like the Supermarts, departmental stores etc. Also in places where there is heavy distributorship, Cadbury involves two level channel system which goes through a wholesaler and a retailer. This is the most commonly used in consumer markets. Like for example Oreo will send its stock to a wholesaler in Chennai who will in turn sell it to a retailer let’s say Big bazaar, Hypercity or a departmental store.

Oreo’s reach since it’s been only 3 years in the Indian market has been found to be low when compared to that of its competitors and these gaps found in the process of distribution of Oreo need to be identified. Oreo distribution can be increased and bring it in-par to its competitors and thus increase the sales of Oreo by identifying potential areas and store types especially in the Tier2 and Tier3 cities. (Wordpress, 2016)

 Oreo is sold everywhere started from big supermarket and finishing buy small markets. So, it is no influence on product image by retail concept in which it is sold.

Oreo developed a strategy to take on the existing market leaders which included Britannia, ITC and Parle. Internally, they referred to this strategy as TLD (Take Leaders Down). Its focus was to target the 10 million households which consumed 70 per cent of the cream biscuits. It entered the Indian market as Cadbury Oreos as Cadbury had a better brand recognition among the Indian consumers when compared to Kraft. It has targeted the small towns and Kirana stores along with modern stores in big cities. As a result of this strategy its market share has grown from one per cent after its debut to 30 per cent. (SIMCON Consulting Club, 2016)

References

SIMCON Consulting Club. (2016, February 25). Oreo. Retrieved from SIMCON Blog: https://simconblog.wordpress.com/2016/02/25/oreo-case-study-analysis/

Wordpress. (2016, December 6). The World of Oreo. Retrieved from Milks Favourite Cookie: https://milksfavouritecookie.wordpress.com/2014/09/19/distribution/

Oreo 2.3

The brand positioning map where created by me based on the interviews. For the interviews I found 3 “snacks addicted” persons and ask them question from my questionner. Majority believe that Kraft produce high qualitied and expensive cookies. In addition, I gather data from the different databases about main Kraft competitors and also put them in my market positioning map.

Consumer perceptions of Oreo survey: https://docs.google.com/forms/d/e/1FAIpQLSciaviavYAwWq1-Tk54MZgS1EVPWibdvqJIYo3tZsKhx9lFVQ/viewform

Oreo 2.2

Oreo Segmenting markets   

Market segmentation defined as a process of dividing a market into distinct group of consumers who have common characteristics, needs or behavior to selecting one or more segment to target with a distinct marketing mix. (TrackMaven, 2016). Oreo have their own abilities to serve their target market and they putting much effort and attention on specific segment. First, geographic segmentation is dividing the market into different geographical units. For example, Malaysia has a good condition for the cookie industry. That is because coffee stands for cookie culture. Consequently, Malaysians can go through the coffee to know more about the cookie culture. Oreo had chosen to focus on psychographics, demographics lifestyle of consumer.

Psychographics is also referred as behavioral segmentation, it based on consumer's lifestyle, interests, activities, expectation and attitude, which mean what customer preferred, how they spent their time, and the most important is how they feels about issued and event. Oreo heavily involved and promoted in education, charity and the environment. They satisfied their customers Oreo provide some program where their customer can win some goods. Also, Oreo participates in charity activity. (Gavronski, 2015)

Demographics divided the market into groups based on age, gender, income, occupation, size of family, education, race, nationality and religion. Oreo target small children and teenagers 6 - 17 years. Their products are normally aimed in primary school, high school, and even college. The price for Oreo's product is affordable and fair. Even if people do not have a big income they still can buy Oreo products. (Milksfavouritecookie, 2014)

A company can enter one or more of these segments after they defined market segments. Market targeting involves breaking a market into segments, and then focused, selecting on one or more segments to enter. Oreo is focuses on kindergarten kids, primarily school students and family.

Oreo does not target adult directly, but they have some products like ice-cream, cake and pie. So, Oreo also suits for family. Nowadays, Oreo is trying to refine and improve their products to satisfy their customer more. (Gutierrez, 2012)

Position is arranging for product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers. Company wants to develop a unique market position for its product. Therefore, Oreo products always have been perceived with a high-status image by their advertisement. With their high quality products, variety of tastes, customers are willing to pay for the products. Oreo is uses the emotional appeal here in to reinforce its product as a binding force between Parents and their children (‘Twist-lick-dunk’ game). It helps tap the small children who would pester their parents to buy them Oreo cookies. (Milksfavouritecookie, 2016)

References

Gavronski, M. (2015, Apri; 11). Oreo campaign analysis . Retrieved from Prezi: https://prezi.com/9vkkdr2dny45/copy-of-oreo-campaign-analysis/

Gutierrez, M. (2012, December 3). The Ethics of Social Media Marketing. Retrieved from The Huffington Post: http://www.huffingtonpost.com/mateo-gutierrez/social-media-marketing_b_2206357.html?

Milksfavouritecookie. (2014, September 12). MARKETING MIX ELEMENTS. Retrieved from The World of Oreo: https://milksfavouritecookie.wordpress.com/2014/09/12/marketing-mix-elements/

Milksfavouritecookie. (2016, November 22). Segmentation, Targeting, Positioning. Retrieved from The World of Oreo: https://milksfavouritecookie.wordpress.com/2014/09/21/segmentation-targeting-positioning/

TrackMaven. (2016, November 22). Market Segmentation. Retrieved from TrackMaven: http://trackmaven.com/marketing-dictionary/market-segmentation/