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/