How Kraft Changed the Oreo and Its Global Marketing Strategy for Success in China By Scott Bragg, Managing Editor, Business Insights, Global QUESTIONS

1) What did marketing research reveal about the failure of Kraft's Oreo cookie to take hold in the Chinese market?

2. Describe the new marketing strategy that Sanjay Khosla, president of developing markets, implemented at Kraft. Why did this strategy work in countries like China, where brands like Oreo had met with rejection by consumers previously?

3. What product, packaging and branding changes did Kraft institute to achieve success with Oreo in China?

4. Was pricing a factor in the attitude of Chinese consumers toward Oreo? If so, how did Kraft respond to this issue?

5. Were there any distribution issues that had to be addressed in getting products like Oreo to customers in emerging markets such as China and Brazil?

6. The last of the 4 P's of marketing is promotion. Did Kraft localize its advertising and promotion strategies with respect to the Chinese market for Oreo cookies?

Answer:

1.

What did marketing research reveal about the failure of Kraft's Oreo cookie to take hold in the Chinese market?

Kraft Foods had a crisis, and Oreos was not purchased by the Chinese. In 1996, the most popular cookie in the world was released. In the following decade the company's profits increased only moderately. In 2005, the Chinese cookie industry was dominated by just 3%.

2.

Describe the new marketing strategy that Sanjay Khosla, president of developing markets, implemented at Kraft. Why did this strategy work in countries like China, where brands like Oreo had met with rejection by consumers previously?

Khosla has managed to grow sales from 5 to 16 billion dollars in the past five years, chairing expanding Kraft Foods markets from 2007 to 2013, introducing Oreo and Tang billion dollar products to world countries and purchasing major global brands including Cadbury and Danone biscuit.

• Offerings — What are the products or services that you could present differently?
• Brands — How do you view the offers? How do you spread a brand?
• Customers-What are their desires and needs?
• Partners — Would you operate together, rather than interfere with the operation of a certain company?
• Channels — How will your consumers get the goods and connect with your business?
• Companies - Why do the markets' communities differ?
• Monetization — How do you support staff and customers earn more money?

How Kraft won in Chinese Market ?

Kraft noticed that even a global corporation has to reinvent itself in order to win over Chinese customers, allowing local managers to take decisions based on their market expertise.

As a result of these improvements, China is now the world's largest non-American oreo market with an estimated intake increase of 41.9% in the last year.

3.

What product, packaging and branding changes did Kraft institute to achieve success with Oreo in China?

Kraft has made a bold change to appeal to local preferences by introducing new Oreo items such as Oreo Wafer Sticks, Oreo Wafer Wraps, Oreo Soft Cakes and Oreo Raspberry Creme.

With such changes, China is now the strongest in the world.

4.

Was pricing a factor in the attitude of Chinese consumers toward Oreo? If so, how did Kraft respond to this issue?

The American Oreo is too sweet to Chinese consumers, Khosla reports. We have made it less sweet. The original price for 14 cookies was deemed too expensive at a price of 5 yuan [73 cents] and was too large for 14 cookies and we packed them in 2 yuan [29 cents] for 7 smaller cookies.

5.

Were there any distribution issues that had to be addressed in getting products like Oreo to customers in emerging markets such as China and Brazil?

Mondelez reported $1.77 billion or $1 per share in the fourth quarter up from $569 million or 32 cents per share the previous year. The company has announced its expansion in emerging markets such as Brazil and China, as well as its restructuring in order to improve cost structure. The Kraft intends to accelerate its growth, broaden worldwide marketing, grow markets and increase investment in infrastructure such as China.

6.

The last of the 4 P's of marketing is promotion. Did Kraft localize its advertising and promotion strategies with respect to the Chinese market for Oreo cookies?

Price / pricing strategy for power food: power foods

The pricing policy of Kraft Foods is fair as it targets consumers who are price-conscious. This is also used to boost the competitive advantage of the company belt, which gives higher sales figures. We maintain the quality only in a small range to achieve an edge over their rivals. Kraft Foods' price strategy depends as a global brand also on market conditions and competition.

Place & distribution strategy for Kraft Foods:

Kraft Foods is available in the majority of the USA. 170 countries have an foreign presence, such as India, Germany and so on. The network comprises traders, manufacturers, dealers and customers in grocery shops, supermarkets etc. There is also a large network of distributions. Furthermore, it has a personalized distribution network for its brands.

Promotion and Advertising Strategy for Kraft Foods:

The promotional and advertisement strategies are as follows in the Kraft Foods marketing strategy: Kraft Foods has implemented aggressive promotion plans for its product and brand. This distributes traffic, national radio and newspaper ads. He uses digital marketing techniques in his recipes found on the company's website. The business creates a positive relationship with the brand by encouraging its customers to create a large proportion of the products and giving them tips. By comparison to this approach, Kraft Foods implements a direct marketing strategy. It publishes much on websites of the social media.

Did Kraft localize its advertising and promotion strategies with respect to the Chinese market for Oreo cookies?

In reality, Kraft corporation has been able to boost its income with the use of innovative Chinese business tactics and the introduction of new items, such as making the Oreo cookie less expensive and lowering prices because consumers at home think it is too costly.