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Marketing Plan

for

Danone YAKULT

April, 2012

Under the guidance of

Prof. Sanjukta Shrivastav

Submitted by:

Ankit Bhilota - 25

Neha Salvi- 27

Shalvi Vartak- 29

Swati Bhadra- 31

Shamika Rane - 33

Ankita Vohra - 35

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Table of contents

1 EXECUTIVE SUMMARY.................................................................................................................... 3

2. SITUATION ANALYSIS........................................................................................................................ 4

2.1 Segmentation strategy and market trends

2.1.1 Demographic

2.1.2 Geographic

2.1.3 Psychographic

2.2 Current segmentation strategy of Yakult

2.2.1 Benefit segmentation

2.3 Market targeting

3. SWOT ANALYSIS.................................................................................................................................. 7

4. COMPETITION ANALYSIS (Yakult Vs. Nutrifit)............................................................................ 9

4.1 Target market

4.2 Product

4.3 Pricing

4.4 Promotion

4.5 Distribution

5. PRODUCT OFFERINGS........................................................................................................................... 13

6. KEYS TO SUCCESS................................................................................................................................... 14

7. MARKETING STRATEGY....................................................................................................................... 16

7.1 Mission

7.2 Marketing Objectives

7.3 Sales Objectives

7.4 Marketing Mix

8. FINANCIALS............................................................................................................................................. 25

9. HUMAN RESOURCE............................................................................................................................. 26

9.1 Recruitment

9.2 Training & Development

9.3 Compensation

10. Refrences................................................................................................................................................ 28

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Executive summary

DANONE decided to enter the Indian market with one of our Probiotics dairy products. They analyzed

their future target market and took external factors as political, social or legal aspects into consideration.

Additionally they analyzed the labor market in India and the financial situation of the DANONE Group.

India seems to be a suitable market to enter for different reasons. First of all DANONE has already

formed a Joint Venture with the Japanese company Yakult. Until now they haven‟t sold any DANONE

products in the Indian market. However, they decided to use the Joint Venture for entering the Indian

market with Yakult drink, because of financing reasons and experiences with India. India is an attractive

market, as it is one of the four fastest growing nations until 2050.

After analyzing the Indian market they decided to market a Probiotic product YAKULT extensively and

create awareness; however some adjustments need to be done to the product mix to suit the target market.

As they entered the market via Joint Venture with Yakult, the investments were not that high compared to

other investments. In order to finance the entry in India Yakult had alternatives. They can increase their

long-term debts again or increase their share capital. After informing about the labor market in India and

its HRM policies in the companies, we came to the decision that we don‟t have to make a lot of changes to our HRM policies. For sure we have to adapt or HRM policy in some way to the Indian because of

India‟s HRM history, but the impact won‟t be that high, since India seems to get more and more similar to the European HRM. They are already active in corporate social responsibility issues, however if they

enter the Indian market, they will have to take actions in India as well, since India is still an emerging

country in which more than 24% of the population live under the property level. In order to guarantee the

success of our project in India, Danone needs to measure the actual sales compared to the targets on a

regularly basis. We need to evaluate the project to see what progress has been made during a specific

period of time and to identify weaknesses and strengths in order to improve our weaknesses and use our

strength to buildup a competitive advantage in the Indian market. Additionally the external factors

influencing our operations in India need to be analyzed after a specific period of time, since the

environment is continuously changing and we need to identify threats and opportunities in order to take

advantage of these or reduce their impact on our business. Through the regular evaluation we are able to

compare our performance and to make decisions about staying in the Indian market or leaving. The Group

needs to know how profitable the operations in India are and if the projects results justify the projects

inputs and investments.

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Situational Analysis

Pro-biotics literally mean for life and are defined as living microorganisms which upon investigation in

certain numbers exert health benefits in humans and animals beyond inherent basic nutrition.

BENEFITS OF PROBIOTICS

Restoring the balance of the gut flora by increasing the number of beneficial bacteria

Producing substances in the gut, such as lactic acid, that help to suppress the growth of disease-

causing bacteria

Competing with disease-causing bacteria for nutrients and space

Reducing the concentration of toxins

Other probiotic products available are:

Probiotic milk

Probiotic curd

Probiotic lassi

Probiotic ice creams

SEGMENTATION STRATEGY AND MARKET TRENDS

Demographic Segmentation

Age

Gender

Income

Spending Patterns

Occupation

Education

Family size

Population:

Total - 1,210,193,422

Males - 623,724,248

Females - 586,469,174

Literacy

Total74.04%

Males82.14%

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Females65.46%

Density of population per km2 382

Sex ratio per 1000 males, 940 females

Child Sex ratio (0-6 age group)per 1000 males, 914 females.

Changing demographics of Indian population

The Indian population is younger, more urban, with greater disposable income and high purchasing power

parity (PPP). Urban consumers are typically busier and more affluent, thus more willing to pay for

convenience. The main impact of urbanisation has created a growing demand for convenient products.

Geographic segmentation

It is based on Rural Vs Urban Cities

The reason for doing geographical segmentation is that the region where people live has a big

impact on their lifestyles and thus we divided the population in to rural and urban population.

In rural areas people follow a more balanced life style than urban people and also rely on natural

methods to remain healthy therefore in comparison to the urban areas there is limited scope

of growth in the rural areas.

Psychographic segmentation

Based on the

Lifestyle

Personality

Demographics

.Division of market on the basis of lifestyle and demographics of the population:

The prevalence of corporate culture in urban India has created irregularities among the Indian population

which can be seen from the following reasons:

Due to a growing economy and more hectic lifestyles, urban consumers increasingly skip meals

and eat out in sometimes unhygienic fast food outlets.

Increasing stress led to constipation, diarrhoea and acidity, especially among young working

adults. As a result, demand for digestive remedies is buoyant. In addition to this, lack of intake of

nutrients in the form of fruits or dietary supplements further pushed growth

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CURRENT SEGMENTATION STRATEGY OF YAKULT

The current segmentation and targeting market of Yakult is housewives as they can connect with the

benefits of Yakult and use it for their family. Their brand ambassador Kajol who is a married woman also

conveys their target the Indian woman who is worried about her family‟s health.

With the increase in storage capacities for products like yakult it has broadened the urban market as a

segment as they have tie ups with retail stores and confectioners thus making it more easier for consumers

to get access to their products.

BENEFIT SEGMENTATION

In this type of segmentation the benefits of a product like Yakult which is that it is a natural product with

a good taste which is very good for the digestive system, readily available at stores nearby are highlighted

and the market that readily connects with such attributes are Indian women who want their family to

remain naturally fit and other people who due to their life style are finding it difficult to maintain a

healthy lifestyle.

MARKET TARGETING

After completing segmentation on the basis of geographical, demographical , psychographic

and benefit the target market will be divided into three types:

The urban Indian woman who knows her family i.e. children, husband and elder members are not

having a balanced life style and she is not able to do much about it because of some constraints. Thus

with a product like Yakult which is good in taste, natural .easily accessible ,relatively cheap and

keeps the digestive system fit she can easily rest her worries.

The second segment that we would be targeting is the bachelors who are living away from

their families and are either working for multinationals or pursuing education. Since they hardly

maintain a balanced diet and are a regularly dining outside they do not carry healthy digestive

systems and considering their hectic schedule they hardly can do anything for it. This would also

include the atomic families that are living in the metros along with tier 1 cities.

The data supporting this targeting is the Indian antacid market has reached 220 crore market sales by

2010-11 and is expected to grow at a CAGR of 5.1 percent. Also of this revenue 72% of the share is

urban.

The main benefit of Yakult is that it enhances the functioning of digestive system and is completely

natural thus as a product it will looking at the antacid market (i.e Digene, Hajmola, Eno, Gelusil) as

its target market. Probiotic is another new health mantra that is increasingly being chanted by the urban

health-conscious Indian. These products claim to provide beneficial bacteria which aid the optimal

functioning of the digestive system. Though small, this segment will most likely emerge as a sub-category

if the efforts to educate consumers and increase awareness succeed.

And third, the women Residing in metro Sec a and b1 married with kids in age group of 25-55 with a

family size of 3-5 and in favour of healthy notion and a hint of price sensitivity.

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SWOT ANALYSIS

Strengths:

It is targeted at everybody, using the slogan "Every body. Every day." More and more people becoming health conscious, giving a chance for probiotic products to be a part

of their diet. Well established. Yakult‟s benefits have been scientifically established through years of research and

30 million people in 32 countries drink Yakult every day. Yakult Danone India Pvt Ltd has recently been awarded the jury award for Emerging Company of the

Year from Frost & Sullivan. It is fat free and contains no added preservatives.

Weakness:

The product needs to be kept under 10 degree C. It can be a major challenge in transporting the product citing poor cold storage chains and infrastructure. It has a shelf life of 40 days. Just in time theory is used to manufacture Yakult. Currently it has only one factory in Haryana.

People are unaware about the product.

Marketing becomes difficult due to the smaller size of the product. May not be visible to the

customers with other refrigerated products.

Opportunities:

The product can be shown to be consumed as an add on with milkshakes, smoothies.

Awareness through newspapers, doctors and advertisements.

Create more Yakult ladies in India, who delivers the products straight at home. Japan has 50,000 such ladies.

In India probiotic industry is still a nascent industry.Rs100 crores. A strong presence since last 75 years can give it an edge. Globally it is $12 Billion industry.

The Indian Council for Medical Research (ICMR), under the aegis of the health ministry, has set up a committee to formulate guidelines for probiotic foods. The guidelines will involve declaring specific ingredients on labels, which could include strain of bacteria, scientific efficacy of ingredients, clinically proven cultures, and checks at production sites, among other things. This will help distinguish Yakult from the other non genuine products in the market.

Once the people are educated, Yakult can get it different variants like sugarfree probiotic drinks to India.

Research on increasing the shelf life of the product due to poor infrastructure and cold storage chains.

Threats:

As the industry is growing industry and not many players in it, companies like Nutrifit have entered the market.

Nestle, NDDB's Mother Dairy and GCMMF's Amul are the few other competitors for Yakult.

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It has Rs136 crore investment in India, huge amounts are spent in educating the people. Due to which it took 5 years from 2005 to 2011 to break even. Once the people have accepted the benefits of the probiotic drink many other companies can enter and take advantage of the laid foundation.

It sells 40,000 bottles per day, with a unit capacity of 1million. So it has a lot of fixed cost involved.

Continuous research and development is required to remain as the market leader in this segment.

As mentioned earlier, many non genuine products claim to be probiotic and charge 10-15% more than the same category products. Such products have no additional benefits, due to which people stop consuming any probiotic products. It‟s a major challenge for Yakult to educate the consumers to choose their product.

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Competition Analysis

One of the closest competitors of yakult, delicious Probiotics fermented milk drink is mother dairy‟s Nutrifit. However, Yakult is considered ahead of the drink in most of the departments.

Target markets served

Yakult:

The urban Indian woman who knows her family i.e. children, husband and elder members are not having a balanced life style . Women residing in metro, age group 25-55.

The second segment that we would be targeting is the bachelors who are living away from their families and are either working for multinationals or pursuing education. Since they hardly maintain a balanced diet and are a regularly dining outside they do not carry healthy digestive systems and considering their hectic schedule they hardly can do anything for it.

Nutrifit:

It was earlier targeted as a children‟s drink as it offers you taste, protection, and nutrition and increases immunity all at the same time. Nutrifit is available in two delicious flavors – Mango and Strawberry.

With the new Kesar Elaichi flavour, Nutrifit which has been positioned as a probiotic immunity building drink for children, was then targeted at adult consumers also as according to the American Dietetic Association, each bottle of Nutrifit (Kesar Elachi) will meet eight percent of daily fiber requirement of an adult.

Product

Yakult is a fermented milk drink containing over 6.5 billion probiotic (friendly) bacteria - Lactobacillus caseistrain Shirota. Unlike most bacteria found in normal yoghurt, these probiotic bacteria are able to survive the acidic environment of the stomach and reach the intestines alive in the intestine.

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Ingredients:

Skimmed milk powder, water, sugar, glucose, added natural & natural identical flavours and most importantly 6.5 billion ofLactobacillus casei strain Shirota, a unique strain of bacteria.

They change the environment to favour the growth of beneficial bacteria and suppress the growth of harmful bacteria.

The friendly bacteria in Yakult help to improve digestion and build immunity when consumed every day.

1 serving – 80ml – nutritional value

Calories 28 Sodium 22 mg

Total Fat 0 g Potassium 0 mg

Saturated 0 g Total Carbs 8 g

Polyunsaturated 0 g Dietary Fiber 3 g

Monounsaturated 0 g Sugars 0 g

Trans 0 g Protein 1 g

Cholesterol 0 mg

Nutrifit

Nutrifit is a delicious Probiotics milk drink containing billions of LA5 friendly bacteria which strengthen the body‟s defences against infections and diseases when consumed over a period of time.

Pro-biotic seems to be the new health mantra and suppose to boost our immunity. First came pro-biotic curd and lassi, and now probiotics drinks are there in the market too.

Ingredients: Milk, water, sugar, mango pulp/strawberry pulp, stabilizers, lactic culture with probiotics.

Just as antibiotics fight disease causing bacteria, Probiotics help increasing immunity