Dannon Case Analysis Essay

In 2007 and 2008. Dannon. the # 2 yoghurt supplier. was losing valuable market portion to its top rival Yoplait. Despite the growing chance in the domestic U. S. yoghurt market. Dannon’s growing had surprisingly slowed. At the terminal of 2008 Yoplait was the U. S. yoghurt market leader with 35. 4 % of the market dollar portion while Dannon merely held 28. 9 % of the market. Yoplait held a competitory advantage over Dannon that gave it a immense leg-up.

Dannon lacked the external CSR that had come to construct Yoplait a valuable and loyal trade name following. Most notably was the “Save Lids to Salvage Lives” chest malignant neoplastic disease consciousness run that Yoplait put on every twelvemonth since 1997. Dannon had their ain CSR enterprises ; nevertheless. they were internally communicated. This ended up aching Dannon’s exposure and community dealingss in the market topographic point. To be a formidable rival for Yoplait. Dannon must extinguish Yoplait’s CSR competitory advantage while custom-making its ain CSR enterprises to bring forth new gross revenues chances.

The U. S. is non a big consumer for yoghurt. Relatively talking. France and Switzerland consume over four times every bit much yoghurt as the United States despite being sizably smaller. If Dannon uses external CSR to demo consumers that eating Dannon yoghurt is an of import basic in a healthy diet. this can bring forth new gross revenues chances for Dannon. Externally pass oning these messages to the public allows Dannon to show-off the clip and money they spent researching the wellness benefits of yoghurt. Not merely can Dannon extinguish Yoplait’s competitory advantage but it can besides turn new gross watercourses by educating people that yoghurt is a valuable and indispensable portion of a healthy and well-balanced diet.

Problem Statement Despite heavy selling attempts in a turning U. S. yoghurt market. Dannon was dead as the # 2 Yogurt manufacturer in the domestic U. S. and was unable to take over Yoplait for the # 1 topographic point in 2009. Dannon was non merely unsuccessful in leap frogging Yoplait to go the # 1 yoghurt manufacturer. they were besides losing market portion at the same clip.

Data Analysis In 2008. Yoplait stood as # 1 in the market topographic point with a 35. 4 % market dollar compared to Dannon who held a 28. 9 % market portion. 67 % of Yoplait’s gross revenues were comprised of the Light and Staples sections. This figure is reeling sing that Dannon’s overall company mission is “bringing wellness through nutrient to as many people as possible. ” Dannon besides has “The Dannon Institute” foundation. which was active in research and instruction on healthy feeding and dieting. Despite the mission of the company and the research that Dannon conducted. Yoplait was far more successful because of the external communicating of their CSR.

Since 1997. Yoplait has run its “Save Lids to Salvage Lives” chest malignant neoplastic disease consciousness run. It is well-known by consumers and this external CSR has allowed Yoplait to construct a strong and loyal trade name. Even though Dannon has done their ain CSR enterprises. they were communicated internally as most consumers were incognizant of the Dannon Institute and what is done at that place. Harmonizing to a study done by the stigmatization company Landor Associates. 77 % of consumers think that companies should prosecute in societal duty. If people are incognizant that Dannon is being socially responsible so this could explicate why they are non viing every bit much as they could be in the Light and Staples sections. Options

1. Dannon could externally pass on their CSR to do consumers cognizant of the internal CSR they were already making. 2. Dannon could increase their selling and advertisement budget in the Light and Staples sections to try to pry-away market portion from Yoplait. 3. Dannon could run particular gustatory sensation proving publicities at retail mercantile establishments to acquire people to seek and hopefully like their yoghurt. 4. The company could publicize as the corporate company of Dannon instead than concentrate the advertisement on the single trade names like it already does. Identify Decision Criteria

1. Increase gross revenues and market portion 2. Increase client satisfaction and corporate image 3. Be consistent with corporate mission or scheme 4. Improve ( or at least maintain ) profitableness 5. Within our present resources or capablenesss 6. Within acceptable hazard parametric quantities 7. Ease or velocity of nidation 8. Minimize environmental impact 9. Maintain and construct employee morale and pride

Options Analysis

1. Even though Dannon has been partaking in CSR for rather some clip it has ever been done internally instead than externally. Because of this. consumers are incognizant of the Dannon Institute. which has been active in researching and educating approximately healthy feeding. If Dannon communicated this to its audience it could edify people on the benefits of healthy feeding and how yoghurt could be a healthy basic to people’s diet. This could potentially do more people to buy yoghurt and besides do current yoghurt purchasers to buy more frequent. The negative to this is that these CSR attempts could be seen as a copy-cat to Yoplait. Peoples may non believe the findings. as they could believe these findings are merely a gross revenues pitch to acquire them to believe that they should purchase yogurt. Besides. there is no mensurable ROI for this scheme.

2. Increasing their selling budget for the visible radiation and basics sections could give Dannon a batch more exposure that potentially could take away the immense market portion that Yoplait holds. With Activia already a immense success. the addition in selling is double. It aims to bring forth new purchasers every bit good as taking to acquire current clients ( such as Activia purchasers ) to buy their merchandises in other sections. The negatives of this are the cost. Dannon would be passing more money without holding any distinction or competitory advantage over Yoplait that would do customer’s to exchange.

3. The advantages to savor proving are self-explanatory because the hardest portion of acquiring person to purchase a merchandise is the fact that they need to be willing to seek it foremost. Giving people a free opportunity to seek it can give them a gage to see if they like it. It besides gives current Yoplait purchasers the opportunity to see if they may wish Dannon’s gustatory sensation better. The biggest con is the cost because Dannon is giving off free merchandise. For the publicity to hold any opportunity of success. yoghurt would necessitate to be given free to 1000s of retail mercantile establishments across America which is a immense initial hit on net income. Another con is that yoghurt is non a basic of the American diet so new ; non-yogurt feeders may non even be willing to seek it in the first topographic point.

4. Presently. Dannon advertises by their single trade name. By publicizing on the corporate degree it could give credibleness to the Dannon trade name wholly. This credibleness could give a competitory advantage through battle with the community and clients. The biggest job with this is that Yoplait had been making this for old ages with their “Save Lids to Salvage Lives” run. This gave Yoplait a ample competitory advantage. Because something like this was already being done by Yoplait the effects of Dannon miming Yoplait would hardly give. if any. competitory advantage.

Recommendations Based on the facts presented. I think it is of import for Dannon to externally pass on their CSR enterprises. Yoplait has had a ample competitory advantage with their “Save Lids to Salvage Lives” campagain which has given them a leg-up on Dannon since 1997. The ground for Dannon to externally pass on their CSR attempts is double. To extinguish the competitory advantage Yoplait presently holds every bit good as educating consumers about the wellness benefits of yoghurt to bring forth new and residuary gross for the company.

In respects to Dannon’s CSR. they have some of the best unbroken secrets traveling. The job with that is that they are presently secrets and clients don’t know about their internal CSR attempts sing people. nutrition and wellness and nature. The Dannon Institute has been around since 1991. with the mission “to develop and disseminate scientific cognition on diet and nutrition to profit public wellness. ” Had Dannon externally communicated this when they foremost launched the Dannon Institute they could hold held the competitory advantage that Yoplait presently holds. It is important for Dannon to externally pass on the undertakings and research that they are presently making so that it lessens from marketability and singularity of Yoplait’s CSR.

In respects to potentially facing recoil for what appears to be copying Yoplait’s CSR attempts. this is non the instance for Dannon because the two attempts are much different. Yoplait is merely donating and prosecuting clients to donate towards a worthy cause. Dannon. on the other manus. is actively prosecuting in research on healthy feeding and the benefits of how yoghurt can better wellness and quality of life. Yoplait is non actively prosecuting in chest malignant neoplastic disease research. While they are advancing a worthy cause. they are non making so hands-on. Dannon is non merely donating money to “look good in the public oculus. ” but instead. they are passing clip and money to look into how their merchandises promote a healthy life style and how piquant kids in a healthy life style can assist forestall diseases such as a diabetes and fleshiness. This is much different than what Yoplait is making and may even take to a little competitory advantage in Dannon’s corner for their active battle sing healthy feeding and the benefits for kids who follow a healthy life style.

The biggest benefit of externally pass oning Dannon’s CSR is bring forthing new gross revenues by educating consumers about the wellness benefits of yoghurt. Yogurt is more of a basic in Europe. where France in Switzerland consumer over four times every bit much yoghurt as the United States despite being much smaller in population. This is why there is first-class possible growing in the U. S. yoghurt market. The large inquiry is how does Dannon convert the U. S. population to purchase more yoghurt? The reply is educating them on the wellness benefits of yoghurt and why it is an of import basic of a healthy diet.

The U. S. economic system is a immense market for dietetic addendums. In 2006. The Economic Impact Report. completed by Dobson | DaVanzo. a Washington D. C. -based economic research house. quantified that the dietetic addendum concern was responsible for over $ 20 billion dollars in gross revenues. This is over six times larger than the domestic U. S. yoghurt market. Peoples in the U. S. are really active consumers when it comes to purchasing merchandises that will assist them lose weight. Dannon can hard currency in on untapped potency by externally pass oning the weight-loss benefits of adding yoghurt to a healthy diet. Peoples buy dietetic addendums because they are advertised to help in weight loss. By marketing and educating the populace on the research that Dannon yoghurt can besides help in weight loss may ensue in a spike of gross revenues while besides recovering the doomed market portion to Yoplait. Action and Implementation Plan

Dannon’s Executive Committee is to run into instantly. Marc Jove Gesti. the Senior Vice President of Marketing will be responsible for outlining and crafting a commercial and press release about the Dannon Institute. its old findings and their current undertakings. Ken Strick. the VP & A ; General Counsel will be responsible for reexamining and revising any legal facets. These include claims such as “Yogurt. when consumed with a healthy and balanced diet can assist assistance in weight loss. ” This prevents anyone from actioning the company who thought they could eat yoghurt in combination with any other type of nutrient and expect to still lose weight. Eric O’Toole. Vice President of Gross saless will work to research new chances with wellness and addendum companies such as GNC. When the word gets publicized about how Yogurt plays a valuable portion in weight-loss and dieting. Dannon can market and sell its merchandise across shops where dietetic addendums are sold. Last. Albe Wendt. Vice President Research and Development will work on developing a high-protein yoghurt that is important for post-workout recovery every bit good as assisting people reach their recommended day-to-day protein intake.

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