Poverty and Danone

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Week 5 Assignment 1
Danimal in South Africa Case Study Assignment

MEGHAL SHAH

7/20/2012

Why Danone developed Danimal yogurt for the South African market

South Africa had a big income inequality gap with its market being at the bottom of the pyramid with more than half of the population in the 4-5 tier range having less than $1500 in purchasing power parity in US dollars. Danone wanted to capture the market by introducing a low priced product to the low income people. With research by local Universities and the SA Medical Research Council, the benefits of of Danimal were promising. It was found that the probiotic cultures in yoghurt were beneficial for children and also that a product needed to be produced with existing equipment. They also wanted to address nutritional shortcomings in the typical diet of a child from a poor family — especially vitamin A, iron and zinc. There were several benefits in the production of the yoghurt. Danone was doing well for the society especially the children of poor backgrounds of SA by providing them with nutritional products. Their network of distribution consisted of Danimamas and Daniladies and Danimen, which provided jobs and skills for entrepreneurship for the uneducated, poor people. The social benefit was that Danone SA taught people who previously had no jobs or any prospects the principles of business, supported them through the initial phases of their business and celebrated with them when they succeeded. The long term brand awareness and image would increase and help them expand to other developing countries. The population benefitted from the availability of a high-quality, nutritious, tasty and affordable product. Danone understood that if a hungry child was being fed, that child grew up with a greater loyalty to the brand. The company also understood that experience with the brand was very powerful; to be able to smell and taste it was a valuable marketing tool. The performance...
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