Despite agriculture being one of Ireland’s main industries, in the past the consumption of fresh dairy produce was remarkably low. Even today, there is only 10.2 kilos of fresh dairy products consumed per capita as compared to that of France where 33.2 Kilos of fresh dairy products are consumed.
When Danone researched the feasibility of entering the fresh dairy market in Ireland, they found an untapped market. They saw there was potential within the fresh dairy market where there was a minimum of competition and thus the opportunity for high sales, profits and product growth.
In order to enter the Irish fresh dairy market, Danone needed to understand the market segments within the industry and set about finding gaps in the segmentation. Market gap analysis includes looking into various segments such as geographical segmentation, (which showed Irish consumption of dairy products was low in comparison to mainland Europe), demographic, psychographical and behavioural segmentation. It was the analysis of the behavioural segmentation in Ireland which proved most useful in identifying where the opportunities lay for Danone.
Consumers were becoming more and more motivated by health concerns and were seeking out products which helped to maintain physical health and well being. Danone targeted the consumers growing desire for the healthy option by offering the Actimel brand as a healthy way to start the day.
Danone’s advertising set about positioning the Actimel range as a healthy option for breakfast by highlighting the clearly defined benefits of eating yogurts with the subtext of the advertising changing the traditional perception of yogurt being just for dessert.
2. Define and explain what is meant by the terms R&D and Marketing Research. Use examples form the Danone case study to support your answer.
R&D (research and development) can be defined as “Investigative activities that businesses choose to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to the improvement of existing products or procedures.”(answers.com) R&D is carried out in order to expand a company’s product line or operations so that the business may experience future growth and market share.
Danone realized the importance of Research and Development and to that end has founded a dedicated research facility in France called Danone Vitapole. “To maintain the Groupe’s long-term competitive advantage, Danone Research is constantly challenged to offer products with meaningful differentiation in terms of health and nutritional benefits, packaging, texture, taste and sensory signature…”(Danone.com)
At Danone Vitapole, experts study and identify new strains of bacteria and explore new products which boost the body’s immune system and tackle common ailments such as stress or intestinal disorders. This research has led to the discovery of L.Casei Imunitass, which helps strengthen the body’s intestinal balance, and thereafter to the launch of Danone Actimel which quickly grew to become the number one fresh dairy brand in Ireland.
Danone’s R&D mission is to “create tomorrow’s innovations to ensure Groupe Danone’s future, giving access to products that consumers choose for their health and nutritional benefits and prefer for their taste” (Danone.com).
On their website, Danone have listed their R&D mission of the fresh dairy products division as: - Increase the health-nutrition benefits associated with blockbusters. - Identify new health benefits to help build tomorrow’s innovation. - Back up these innovations with scientific studies and clinical trials. - Support local teams in terms of innovation and adaptation of recipes.
Even today, health...