Marketing Mix of Danone
Danone is a leading global manufacturer of dairy products, cereals, as well as water. The company prides in healthy products and has over the years strengthened its brand through research and development. With over 900 million customers worldwide, Danone is well structured to maintain its position. Danone adopts a simple marketing strategy in Poland. This paper seeks to explore the marketing mix of Danone in Poland.
Poland Demographic Profile
Poland is a member of the European Union with a population of 38.44 million people. The annual population growth is low like most of Central European countries resulting from a low fertility rate of 1.3 and an escalating life expectancy. Most of the population in Poland are people aged between 15-64 years making more than 71 percent of the population, children (0-14 years) make 14.7 percent while the elderly (65 years and over) constitute 13.7 percent of the Polish population (Poland Demographics Profile 2013). The average household size of Poland is 2.5 occupants. The population of Poland is expected to decline in the coming years with an estimated population of 37.4 million people in 2030 (Poland Demographics Profile 2013).
Despite the economic down turn which influenced Poles` purchasing power, wellness and health has not been negatively impacted. There has been an increase in sales of health and wellness products which has been facilitated by numerous information campaigns facilitating Polish consumers` knowledge of the benefits of such products on the human body and their health (Euromonitor International, 2011). Manufacturers of consumer food products have responded to the rising demand by expanding the variety of the products. Most consumers for instance those with gluten or lactose intolerance, have been unable to give up food particularly designed for them despite them costing more.
The economy of Poland came out of the economic crisis of 2008 quite well unlike most economies in Europe. The country`s economy grew by 2.9 percent in the last quarter of 2008. Nevertheless, its GDP growth rate dropped from 6.8 to 5.2 percent (Agriculture and Agri-Food Canada, 2012). Dairy products released in the Polish market represent 19.9 percent of all the new products in the country, which is the highest.
Danone Marketing Mix
Danone is a leading producer of fresh dairy products in the globe and the globe`s second biggest supplier of mineral water. It is a global leader in fermented dairy products which are focused in health foods. These products include, Cookies, water (such as Lanjaron, Evian) Yoghurts (Activa, Vitalinea, Danonino), among other products. Danone`s products are majorly health products that have over the years created a strong brand name in the global market. In Poland, Danone has repute among the population which is conscious of health products. Product Vitalinea is a highly potential product as it offers Danone with future opportunities to add new features to its yoghurts. For instance calcium can be added to design new products that help reduce cholesterol. Danone`s wide range of dairy products that are health conscious and the consistency between product lines gives the brand economies of scale.
Danone also has a wide range of nutritious products designed for the disadvantaged in the Polish population. In its mission to ensure that low income families and children from poor social economic origins can access affordable, high quality nutritious foods, Danone Poland has established a line of nutritious products to meet this need.
When considering the price for products, account should be taken for both the cost per unit of product and the price that customers are ready to pay. This way, the product price will suit the market. Poland`s purchasing power is relatively stable as proved in the wake of the financial crisis of 2008. Poles are ready to buy health products regardless of their prices, which has enabled Danone to comfortably price their products.
In addition, the pricing strategy of Danone considers the disadvantaged among the Polish population. Prices for its nutritious products are affordable for the less fortunate members of the society including children from poor families (Rok, N.D).
Danone uses perceived value method. Since it is difficult to understand consumer perception on prices, Danone analyses the market, and mix it with the Markup pricing approach, which means to relate a percentage on the overall cost per unit.
However, Danone should adopt higher prices to match with its prestige. Differentiation is also necessary although not so much as its milk products.
Danone`s products are very fresh which is made possible by the distribution lines that own the group. There are numerous ways that can be employed to distribute a product, but Danone is an exclusive distributor. The company distributes to all supermarkets in Poland where customers can purchase the products. Through this, the transaction costs reduce as the amount of products sold by Danone is very huge that an intermediary merchant for supermarkets is not needed.
From the final consumer`s point of view, Danone has merchant intermediaries, in this case supermarkets, to sell its products. In another perspective, Danone sells direct to the consumers. In both perspectives, the distribution channel is long as consumers do not purchase directly from Danone (Ferrell & Hartline, 2013). To achieve maximum rate of consumers, Danone has a massive distribution strategy which ensures its products are available and accessible in places that sell foodstuff.
Promotion entails creating consumer awareness on the company`s brand (Ferrell & Hartline, 2013). Danone`s promotional objective is aimed at boosting sales, having new customers use the product, and attracting consumers that often jump from brand to brand. Danone uses promotional strategies such as discount tickets presents as well as refunds which are quite effective as far as consumers are concerned. In regard to distributors, price reduction, compensation and free merchandise are quite common among Danone products in Poland.
In addition, Danone carries out massive advertising through all media including television, magazines, newspapers, billboards as well social media and the internet platform. Its advertising strategy has a major impact in the market. For example, Danone`s adverts run on television all day reaching all the target customers in the market. Danone`s low fat products such as Vitalinea are particularly targeted at women as well as men wishing to keep their figure and health.
The company`s websites also plays a great role in marketing of its brand. With the large internet usage in Poland and the larger European region, advertising through websites has proved to be effective for Danone.
Danone Positioning Statement
Danone positions itself as a global leader in manufacturer and marketer of health products for the whole family. The company prides in over 900 million customers worldwide including Poland. Poland`s population is very conscious of health foods and Danone offers a variety of health products to meet the needs of the people.
The market for health products particularly yoghurt is steadily growing which offers a wide range of opportunities for developing new products adapted to the swinging tastes of consumers. Danone has a perfect marketing mix that has since the introduction of the group in Poland in 1992 has seen it grow tremendously (Rok, N.D). Most multinationals particularly in the food processing sector such as Nestle has adopted almost similar strategies that Danone uses. To survive the stiff completion in the dairy market products and cereals, Danone has continuously reinvented its products, introducing new products in the market to match the generational changes. In Poland, the aged, women, men and children are all target customers for the wide range of Danone`s products. Through Danone Institute, Danone has heavily invested in research and development which have also helped the company to maintain its position in the market. Employee training in Danone has also enabled the company to stay ahead of its competitors in innovation and new product development. Nevertheless, hiring of new talents can be a challenge to the company.
Agriculture and Agri-Food Canada (2012). Comparative Consumer Profile The Czech Republic, Hungary and Poland. Retrieved http://www.ats-sea.agr.gc.ca/eur/6136-eng.htm (Accessed January 4, 2014).
Euromonitor International (2011). Health and Wellness in Poland. Retrieved http://www.euromonitor.com/health-and-wellness-in-poland/report (accessed January 4, 2014).
Ferrell, O. & Hartline, M. (2014). Marketing strategy: text and cases. Mason, OH: South-Western/Cengage Learning.
Poland Demographics Profile 2013. Retrieved http://www.indexmundi.com/poland/demographics_profile.html (Accessed January 4, 2014).
Rok, B. Danone Poland: Affordable Milk Porridge for Low Income Families. Retrieved http://growinginclusivemarkets.org/media/cases/Poland_Danone_Summary.pdf (Accessed January 4, 2013).