CB Group 3 Final Report - Oreo

FORE School of Management, New Delhi
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AN EXTENSIVE CONSUMER RESEARCH ON
OREO BISCUITS

CONSUMER BEHAVIOUR

Submitted to:
Dr. Anupam Narula
Professor (Marketing)

Group 5 (IMG VI):
Avneesh Luthra (063012), Deepak Arora (063014), Nikhil Gurg (063030),
Pooja Juneja (063035), Rohit Batta (063042), Shikha Mittal (063048)

8
th
August, 2013
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CERTIFICATE

This is to certify that Group 3 Members Avneesh Luthra, Deepak Arora, Nikhil Gurg,
Pooja Juneja, Rohit Batta and Shikha Mittal, Roll Nos. 063012, 063014, 063030, 063035,
063042 and 063048, have completed their Term project report entitled An Extensive
Consumer Research on Oreo towards part fulfilment of the requirements for the award of
the Post Graduate Diploma in Management (IMG-6) 2012-2014.

This Mini Report in Consumer Behaviour is the result of their own work and to the
best of my knowledge no part of it has earlier comprised any other report, monograph,
dissertation or book. This project was carried out under my overall supervision.

Date: 08/08/2013
Place: New Delhi

-----------------------------------
Dr Anupam Narula
Internal Faculty Guide

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TABLE OF CONTENTS

CERTIFICATE ............................................................................................................................................ 2
LIST OF TABLES ........................................................................................................................................ 5
LIST OF FIGURES ...................................................................................................................................... 5
ACKNOWLEDGEMENT ............................................................................................................................. 6
EXECUTIVE SUMMARY (Shikha Mittal) ................................................................................................... 7
LITERATURE REVIEW (Deepak Arora) ..................................................................................................... 8
INTRODUCTION (Avneesh Luthra) ........................................................................................................ 10
PESTLE ANALYSIS FOR INDIA (Pooja Juneja) ......................................................................................... 17
PORTERS 5 FORCE ANALYSIS (Avneesh Luthra) ................................................................................... 19
SWOT ANALYSIS (Pooja Juneja) ............................................................................................................ 21
VALS SEGMENTATION (Nikhil Gurg)...................................................................................................... 23
PRODUCT STRATEGY (Shikha Mittal) .................................................................................................... 25
B2B Market ....................................................................................................................................... 25
PRICING STRATEGY (Deepak Arora) ...................................................................................................... 26
DISTRIBUTION STRATEGY (Rohit Batta) ................................................................................................ 27
PROMOTION STRATEGY (Shikha Mittal) ............................................................................................... 29
Cadbury and Oreo ............................................................................................................................. 29
Nielsen Research ............................................................................................................................... 29
Twist, Lick and Dunk ......................................................................................................................... 30
Father Son relationship ..................................................................................................................... 30
Father Daughter Duo ........................................................................................................................ 31
Siblings .............................................................................................................................................. 31
Mass and Digital Media ..................................................................................................................... 32
Facebook / Twitter (#DailyDunks) ................................................................................................. 32
Youtube ......................................................................................................................................... 32
On Ground Activities ......................................................................................................................... 33
Oreo Togetherness............................................................................................................................ 33
Oreo Togetherness Bus ................................................................................................................. 34
Consumer Behaviour and Some Concepts (Shikha Mittal) ................................................................... 34
PACKAGING STRATEGY (Nikhil Gurg) .................................................................................................... 36
Packaging .......................................................................................................................................... 36
PRIMARY CONSUMER RESEARCH (Nikhil Gurg) .................................................................................... 37
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Key Objectives ................................................................................................................................... 37
Understanding of User Preference in Biscuit Segment .................................................................... 37
Competitive Scenario of Biscuit segment ......................................................................................... 40
REFERENCES .......................................................................................................................................... 45

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LIST OF TABLES

Table 1: Oreo Product-wise Segments .................................................................................................. 10
Table 2: Indian Biscuits Market Growth ................................................................................................ 13
Table 3: Segments in the Indian Biscuits Market .................................................................................. 14
Table 4: Biscuits Penetration in India .................................................................................................... 15
Table 5: Biscuits Consumption Pattern across India ............................................................................. 15
Table 6: Kraft Foods SWOT ................................................................................................................... 21

LIST OF FIGURES

Figure 1: Oreo - Twist, Lick, Dunk ......................................................................................................... 12
Figure 2: Biscuits Market in India .......................................................................................................... 12
Figure 3: 2011 Market Share (Overall Biscuits Market) ........................................................................ 16
Figure 4: Market Share in Cream Biscuits ............................................................................................. 16
Figure 5: Oreo Distribution ................................................................................................................... 27
Figure 6: User Preference to Taste ....................................................................................................... 37
Figure 7: User Preference to Price ........................................................................................................ 38
Figure 8: User Preference to Variety .................................................................................................... 38
Figure 9: User preference to Flavor ...................................................................................................... 39
Figure 10: User preference to Brand .................................................................................................... 40
Figure 11: Brand Preference in terms of Taste ..................................................................................... 40
Figure 12: Brand Preference in terms of Price ...................................................................................... 41
Figure 13: Brand Preference in terms of Flavour .................................................................................. 42
Figure 14: Brand Preference in terms of Brand .................................................................................... 42

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ACKNOWLEDGEMENT

We take this opportunity to express our gratitude to Professor Anupam Narula for
giving us the opportunity to conduct a consumer research and analyze how Oreo has
responded to the preferences of Indian consumers with its unique taste and special ritual of
twist, lick, and dunk. as part of our Mini Project for the course Consumer Behaviour,, and
subsequently guiding, monitoring and encouraging us throughout the course of the project.
The project was a great learning experience for all of us.

During the course of the project, we gained immensely valuable insights on the
strategies adopted by Kraft Foods for its product Oreo Biscuits. There was also a great
deal of learning with regard to the Biscuits Industry in India.

We also take this opportunity to express our thanks to FORE School of Management,
New Delhi for providing us with the resources and environment required to carry out the
project.

Avneesh Luthra (063012)
Deepak Arora (063014)
Nikhil Gurg (063030)
Pooja Juneja (063035)
Rohit Batta (063042)
Shikha Mittal (063048)
Group 3, IMG VI

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EXECUTIVE SUMMARY (Shikha Mittal)

Kraft Foods and Cadburys launched Oreo (Premium Segement Cream Biscuit ) in India in
2011. India is the worlds largest Biscuit market (as per volume) growing at a rate of 17% per
annum. The cream segment is leading the growth of biscuit industry with 25 % - 30%
growth.
Oreo has built its positioning on Togetherness in India. Its ritual of Twist, Lick and Dunk is
internationally known, and has also caught up with Indian consumers. This positioning has
helped Oreo in differentiating itself, in an industry where competition and rivalry is high. At
the same time suppliers have low bargaining power.
Nielsen Group had conducted a research Togetherness Quotient for Oreo. The findings for
the research have been extensively used by the company in modelling and understanding
consumer behaviour with respect to Price, Promotion, Place and Product. Various concepts
like perceptions. Motivation and Learning of consumer behaviour have been leveraged by
Cadbury Oreo.
A Primary research was conducted to analyse the preference of Oreo with respect to its
competitors and understand he attributes important in buying behaviour of the consumers
for Cream biscuits.

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LITERATURE REVIEW (Deepak Arora)

Consumer Behavior is the behavior that consumer displays in searching for, purchasing,
using, evaluating and disposing of products and services that they except will satisfy their
needs. (Sciffman, Kanuk & Kumar).

Krishnan (2011) showed that in consumption environment a person chooses a product or
brand which seems to possess a maximum possibility or elaboration of his lifestyle identity.
A complete picture of consumer cannot be given by demographics alone and thus might
affect the perfect segmentation of market (Cooper, 1984).

Forrest and Blumberg (1981) sees life style as a basis that allows marketers to assess
accurately the needs of appropriate segments, as demographic descriptions have proved
inadequate for this task.

From the past work it can be concluded that values and lifestyle (VALS) plays an important
role for marketing of product and services. This would facilitate reduction of large and
heterogeneous population into few homogenous groups.

Sivan(2000) showed that 18% of buying decisions are influenced by advertisement . Ibrahim
and Alnawas (2010) that there is tremendous influence of using the celebrities on consumer
buying behavior. Thus, Promotion is of great importance for marketing.

Padberg and Westgren(1979) has also shown that along with product quality the
communication, distribution and pricing are other important factors that affects the
consumption process.

Sehrawet and Kundu(2007) has shown that packaging is the key component that affects the
consumer behavior. Ease of carriage, lightness of weight, simplicity, transparency and
consistency of package are the key factors and are more important for urban consumers.
Packaging plays an important role and is an important tool for marketing a product.

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Thus Packaging, promotion, distribution, Lifestyles and values and pricing determines the
consumer behavior to larger extent.

The Asia Pacific Biscuits market has grown by 7.5% in year 2011 and has reached the value
of $9974 Million. The compounded annual growth rate of market in the period 2007-11 was
5.9 %.( Market line).

Jago (2000) considered the functional food and beverage category one of the most
important drivers of new product development (NPD) in recent years

Longman (2001) stated that increased demand for functional foods amongst consumers is
due to maturation of the general healthy foods market.

Krafts multi category distribution (warehouse delivery and direct store delivery) and
consumer awareness are its key strengths (Data monitor). The Biscuit Market has reached
the value of $9974 million and thus it has a lot of potential and to study various factors
affecting the consumer behavior in this category of product is important. But a very less
work has been done towards specifically biscuit market; more focus is on Food and
beverages industry.

According to Deloitte (2012) convenience, health/nutrition benefits, affordability, taste/
freshness, functionality, product availability and corporate responsibility issues are the key
consumer drivers in food and beverage industry. Since this biscuit industry provides
immense opportunity, so still a lot of researches can be conducted in particular to Biscuits
industry and study of consumer behavior can be made which will allow marketers and
managers to better serve the customer and increase the profitability.

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INTRODUCTION (Avneesh Luthra)

Kraft Foods
Kraft Foods Group Inc. is a North American grocery manufacturing and processing
conglomerate, which is headquartered in Northfield, Illinois, a Chicago suburb. Kraft Foods
Inc. (Kraft Foods) manufactures and markets packaged food products, including biscuits,
confectionery, beverages, cheese, convenient meals and various packaged grocery products.
Its product categories span breakfast, lunch and dinner meal occasions, both at home and in
foodservice locations. The company sells its products to consumers in approximately 170
countries (Forbes, 2013). Kraft Foods operates in three broad segments:
1. Kraft Foods North America
2. Kraft Foods Europe
3. Kraft Foods Developing Markets.
Kraft Foods currently have operations in more than 75 countries and made its products at 223
manufacturing and processing facilities worldwide.

In February 2010, the company announced that it has acquired the control of Cadbury plc.

The company operates in the following five segments (Product-wise):
Table 1: Oreo Product-wise Segments
Segment Description
US Beverages This segment is responsible for the
manufacturing of packaged juice drinks,
powdered beverages and coffee.
US Cheese This segment is involved in the
manufacturing of manufactures processed,
natural and cream cheeses
US Convenient Meals The segment deals with the manufacturing
of processed meats and lunch combinations.
US Grocery This segment is involved in the
manufacturing of spoonable and pourable
dressings, condiments, desserts, packaged
dinners and snack nuts.
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Canada and NA Foodservice This segment sells products that span all of
its segments and includes the Canadian and
Puerto Rico grocery business, the North
American Foodservice operations and the
North American Grocery Export Business.
(Source: Reuters, 2013)
Kraft Foods have set upon themselves a target of achieving 40% of its revenues from the
emerging markets and is particularly keen to expand its presence in the BRIC countries
Brazil, Russia, India and China. Kraft Foods acquired Cadbury Plc. to further develop its
footprint in the developing countries. The Chicago-headquartered parent company in 2010
said the combination of Kraft Foods and Cadbury provides the scale necessary to grow sales
and distribution in new and existing markets, delivering $1 billionn in incremental revenue
synergies by 2013.
Oreo Biscuits
First introduced in 1912 in the United States, Oreo Biscuit is an iconic product of the Kraft
Foods Group. It is a sandwich biscuit (called cream biscuit in India) with the delicious
combination of dark chocolate cookie and smooth vanilla cream. Today it stands as the
worlds No.1 biscuit with approximately 25 billion Oreos eaten per year (About 70 million
per day, or 800 per second!).
Although a well-established brand globally, Oreo is new to India. It was launched in India in
March 2011 under the Cadbury brand. Since its launch, the company has gained
considerable market share in the cream biscuits segment in India, making a name for itself
minds of the Indian consumers. According to Cadbury India Managing Director Anand
Kripalu, the launch of Oreo resulted in a growth in Cadbury Indias sales by 40% between
January-September 2011.

SEPARATE STRATEGY FOR TANG
Kraft opted to keep Tang Brand with itself while launching Oreo through Cadbury. There
were two major reasons for this:
1. Launching Tang through Cadbury wouldve resulted in a brand conflict. Cadbury is
known for its association with chocolates and launched a fruit concentrate wouldve
been in stark contrast to their existing strategy.
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2. Cadbury didnt have the necessary infrastructure to manufacture Tang through their
existing facilities. Hence, it wouldve needed considerable investment from the
company to manufacture Tang.

Twist, Lick and Dunk
Based upon the habits of Americans, Kraft designed the Twist, Lick and Dunk slogan for
Oreo as a ritual or a fun way to eat the biscuits.
This is described in the picture below:
Figure 1: Oreo - Twist, Lick, Dunk

(Source: Official Company Website India)
The Indian Biscuits Industry

Figure 2: Biscuits Market in India

(Source: Business Today)
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As per Nielsens study, India is the biggest market for biscuits in the world with a market
share of 22% in terms of volume as compared to 13% in the United States. The size of the
biscuits market is estimated to be Rs. 13,000 Crores. The way for biscuit companies to the
Indian consumers stomach is through competitive pricing, high volumes and strong
distribution, especially in the case of rural areas.

The market is dominated by Britannia, Parle and ITC majorly due to their presence in the
low-cost glucose biscuits. Britannia was the first organized company that started
manufacturing of biscuits in India followed by Parle. Other popular brands of biscuits in the
country are Priyagold, Anmol, Biskfarm, Dukes, Cremica, Priya, Veeramani, Bonn, Bhagwati,
Raja, Sobisco, Madhabi, Nezone, Ankit and Nalanda. Over the years, cream biscuits have
gained popularity in India. The market size for premium creams in India currently is
estimated to be Rs. 5,500 crores.

Industry Growth
Growth in the Industry has been stable, ranging from 13-15%, although there has been a
slight decline in the growth pace after 2010-11
Table 2: Indian Biscuits Market Growth
Market Growth Growth in Production
Year Growth
(%)
Year Annual Production
(Lakh Metric Tonnes)
2003-04 13% 2003-04 11
2004-05 14% 2004-05 12.55
2005-06 14% 2005-06 14.29
2006-07 13% 2006-07 16.14
2007-08 14% 2007-08 16.85
2008-09 16% 2008-09 17.50
2009-10 14% 2009-10 18.50
2010-11 11% 2010-11 19.00
2011-12 11% 2011-12 20.50
2012-13 9% 2012-13 10.50 (April to Sept)
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(Source: Indian Biscuits Manufacturer Association)
Segments:
The industry is dominated by the organized sector. However, unorganized players also
make a vital contribution mainly due to their presence in rural and semi-urban regions.

Table 3: Segments in the Indian Biscuits Market
Sector Wise Organized Sector 70%
Approximately 9100 crores
Unorganized Sector 30%
Approximately 3900 crores
Import/Export Wise Exports 14% of annual production in
2010-11. This declined to
around 12.5% in 2011-12.
Imports Has not shown any
considerable growth during
the last five years
Categories of Biscuits Functional
(includes Glucose, Marie and
Digestives)
This segment has
dominated Indian
market, showing a steady
growth of 8% per annum.

Smaller Indulgence
(includes Cream, chocolates
and cookies)
This segment has grown by
25 % - 30% recently, mainly
because of reasons like,
rising disposable incomes
and growing modern retail
outlets.
Rural-Urban Penetration of Biscuits
The Penetration levels for biscuits are strong in the Urban Market, emphasizing on the
efficiency of distribution used by companies like HUL. Rural Market has a significant scope
for further exploration and sales.
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Table 4: Biscuits Penetration in India
Rural Market Urban Market
50-65% 75-85%

Per Capita Consumption
The per capita consumption of biscuits in India is about 1.8kgs, as compared to 2.5kgs to 5.5
kgs in countries from South East Asia and Europe and 7.5kgs in the United States.

Pattern of Biscuit Consumption (On Zonal basis)
The consumption pattern is fairly similar across all regions in India, with the Eastern region
showing slightly higher consumption as compared to other regions.
Table 5: Biscuits Consumption Pattern across India
Zone % of Overall Consumption
Northern Zone 25%
Western Zone 23%
Southern Zone 24%
East & North Eastern Zone 28%

Market Shares & Trend
1. Overall Biscuits Market
Parle has the market leadership position with a market share of 40%. Britannia has a
market share of 25% followed by ITC with 8%. Oreo has thus far only been able to
gain 1% market share.
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Figure 3: 2011 Market Share (Overall Biscuits Market)

(Source: Nielsen Study on Indian Biscuits Market)

2. Cream Biscuits Market
Britannia has a market share of approximately 15% followed by Sunfeast with 11%.
Oreo has been able to achieve 6% market share in the cream biscuits segment.
Figure 4: Market Share in Cream Biscuits

(Source: Nielsen Study on Indian Biscuits Market)

Within the Cream Biscuits, Oreo has been able to gain a market share of 30% in the
Premium Cream Biscuits Segment.

Others,
17%
Britannia,
25%
Parle, 40%
ITC, 8%
Priyagold,
5%
Anmol, 4% Oreo, 1%
Oreo, 6%
Sunfeast,
11%
Britania,
15%
Others,
68%
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PESTLE ANALYSIS FOR INDIA (Pooja Juneja)

Political Environment:
Production and Distribution licenses have been liberalized. Excise duty on biscuits
has been removed for biscuits priced below Rs.100 per kg. Custom duty on food
processing machinery has been reduced from 7.5% to 5%.
Indian Agriculture Research Institute (IARI) helps to provide transfer of new varieties
of wheat seeds to farmers under Public Private Partnership (PPP). Exemption limit of
excise duty for SSI raised to 1.5 cr. CST is levied at 3%.

Economic Environment:
According to the World Bank, as of 2011, the Indian economy is nominally worth
US$1.848 trillion with its average annual GDP growth rate of 5.8% over the past two
decades, and reaching 6.1% during 201112. GDP (PPP) per capita as $3,693.
India is a young country with median age as 24.9 as of 2001 census so the biscuit
market has a great potential. Products in the category of Cream Biscuits like Oreo,
Dream Cream, Dark Fantasy, etc can find an increasing potential market. The per
capita consumption of biscuits in our country is 2.1 Kg.
The biscuits market experienced 11% annual growth of in 2011-12. India is mainly an
agriculture based country; hence there is cheap availability of wheat, flour and other
ingredients used for preparing biscuits.

Social Environment:
Increasing per-capita income of the country has improved the quality of life which
has led people to spend more and look for value like Quality and Taste.
There is a large variety of tastes among people in India and, hence, there is a
requirement of a large number of flavours in the biscuit industry. With increased
awareness the consumer will move from tastier to healthier foods.

Technological Environment:
Development of quality practices, augmented with traceability management systems
are at place. Supply Chain improvements to enhance product freshness, optimal
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servicing of proximal markets and margin expansion will continue to receive
significant attention. Achieve zero effluent discharges, providing treated wastewater
for irrigation as an alternative for farmers in water stressed areas and enhancing
rainwater harvesting both within units and across watershed catchment areas are
some of the goals.
Automation in India is widespread in most industries. Even for manufacture of
biscuits, imported machinery is available which will help in mass production and reap
benefits of economies of scale. So the technological know-how and equipments are
available for development of the biscuits industry.

Legal Environment:
Different laws like the standards of weights and measures (packaged commodities) rules
1977 and amendment rules 1977 and amendment rules 2006, The Competition Act 2002,
The Prevention of Food Adulteration Act, 1954 etc are in place for the interest of the
consume and this has led rise to Special Interest Groups..

Environmental:
India is an agriculture based economy and so more emphasis is given for agriculture.
In the area of potato sourcing, the support of foods business by procuring the chip
stock potatoes can be seen. Other requirements like wheat; rice etc can be easily
met.

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PORTERS 5 FORCE ANALYSIS (Avneesh Luthra)

Threat of New Entrants LOW
It is apparent that for any company to form a stronghold in the Indian biscuits
industry, having an extensive and efficient distribution network is essential.
Hence, the costs involved in setting up such a network are very high.
There are no major regulatory hassles/restrictions involved. Companies must
be complaint with the quality, health and nutrition norms.

Threat of Substitutes MODERATE
Consumers have certain options available with them as a replacement for
biscuits such as Snacks (Chips, Wafers etc), Sweets and Homemade items.
However, apart from readymade snacks, there is a cost involved when
choosing any other alternative (For instance, preparing an item at home
would have time cost).
Furthermore, Sweets or Snacks cannot be categorized as direct substitutes for
biscuits, which are usually eaten during morning and evening times.

Bargaining Power of Consumers HIGH
The Indian consumer has a very high propensity to change and move to a
product he/she feels provides better value (either less expensive or better
quality).
Also, consumers in India have a variety of brands and biscuit types to choose
from. The availability of these products is extensive, thus switching cost is
extremely low.
Furthermore, the youth of the country believe more in experimenting and
trying new products, thus the switching tendency is on the rise.

Bargaining Power of Suppliers MODERATE
The producers side in the industry includes large FMCG companies like Parle,
Britannia and ITC. These companies enjoy a considerable advantage when
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negotiating with suppliers.
Supplier switching costs for companies is also low, since suppliers are mostly
fragmented and companies have the option to shift to other suppliers.

Competitive Rivalry HIGH
India offers a substantial amount of scope to MNCs for the biscuits market.
The industry has remained and stable and has witnessed sustained growth
(10-14%) over the last few years.
Rivalry among the large companies (Parle, Britannia and ITC) is very strong
while unorganized sector also poses some competition.

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SWOT ANALYSIS (Pooja Juneja)
Table 6: Kraft Foods SWOT
Strengths Weaknesses
Worlds second largest food
company
Strong brand equity
Pioneering innovation
Strong distribution network
Research & Development
Unimpressive Market share
Debt requirements
Geographic concentration
Opportunities Threats
Expansion in developing markets
Explore Cadbury markets
Repositioning
Offer Organic Products
Cadbury purchase issues
Fierce competition
Unhappy customers

STRENGHTS
After Nestle, Kraft Foods Inc. is the largest food company in the world. The company has
been able to build significant expertise in the manufacturing and marketing of
confectionary, food items and beverages.
It has to its name over 11 brands across markets of America, Europe and Asia. The company
has strong brand image and offers various innovative products to its customers.
Kraft Foods provides is an example of a company which has employed traditional
distribution network as well as a 2 tier direct store delivery distribution network to great
efficiency.
The companys R&D initiatives have also been a major reason for its success by continuously
providing safe, healthy and innovative products to the customers. Effective R&D has helped
the company sustain its market position.

WEAKNESSES
The company is relatively weak on its market performance. Kraft foods acquired Cadbury
which has no doubt increased the companys profit ratio to many folds but it also added lot
of debt pressure on the company.
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Despite of its operations in various markets and presence in US and other markets, the
company is weak on geographic concentration. Kraft foods has low market share but it
enjoys high margins in grocery business.

OPPORTUNITIES
Kraft Foods can engage considerable efforts in market expansion by focusing upon
developing markets of Asia like India, China and Japan. These markets have shown great
potential for the business.
Although Kraft Foods have acquired Cadbury but lots of its resources of revenue are still
untapped to the company. Cadbury is a major player in the developing countries and earns
billions of revenues from its customers in India, China and other Asian countries.
Further, Kraft foods can employ the brand equity of Cadbury to offer new products in these
markets to explore these markets and opportunities present there further.
Secondly, Kraft Foods can also look to reposition itself in the existing markets with more
unique and health-centered products. There is an increasing trend among the customers to
buy fresh, original and organic products. The company can reposition itself in the market as
a provider of farm fresh products to gain the customer attention.

THREATS
The profit margins of the company dropped subsequently, especially after the acquisition of
Cadbury. The customers stopped purchasing the products offered by Kraft Foods, thus,
hurting the market position of the company
Further, the company faces immense competition from international (Nestle, Harshey) and
domestic level (E.g. Parle and Britannia in India) competitors in the various countries where
it operates.

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VALS SEGMENTATION (Nikhil Gurg)

VALS Segmentation is primarily used for segmenting on the basis of
values, attitudes and lifestyles. VALS is a framework which is highly
beneficial for such segmentation. The VALS segmentation for Oreo
Biscuits will be as following,

INNOVATORS:
Innovators are high end people who have high
resources and high motivation. They are the leading
edge of change having high income and self esteem.
Oreo being a high end product well suit their personality
and they also have the resources to purchase such
product. Oreo, due to its make and packaging, is a kind
of product that fits into their behaviour towards finer
things in life i.e. the prestige products. With its eloquent
shape, exotic design on the sandwich biscuits and finish
on the product it fits with the lifestyle of the consumers.

THINKERS:
Thinkers are the high resource people who get motivated by ideals and beliefs. They are
mature people who are highly responsible and well educated. Their primary sources of
leisure are family and are highly rational and practical in their spending. Hence, Oreo
extremely fits into such segment because it is extremely evident from the advertisements
also where extremely well educated father seeks to have pleasure of playing the TLD game
with his daughter. The product is also rational expense for this segment because the
advertisement says to use the product with milk making it further beneficial for the kids.

ACHIEVERS:
These are high resource segment who primarily get motivated by achievements. These are
successful and satisfied people who respect authority and favour established product. Oreo
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being the no. 1 product in the biscuit segment is a well established brand and suits the
lifestyle of this segment.

EXPERIENCERS:
This segment is primarily motivated with self expression. They also have high resources and
these are mainly the young generation having lots of energy. This generation prefer new
clothing and fast food who particularly emphasize on new products. Oreo being a new
brand in the biscuit segment have targeted this segment through it famous Twist, lick and
dunk activity that is not only energetic but also request social activation of consumers.

MAKERS:
Even though Oreo is a high end product but with extreme pressure from competition and
market pressure, Cadbury has launched the economic pack of Oreo biscuits in the market.
These biscuit can be targeted at this segment that even though has low resource but are
motivated with self expression. The company has used the same Twist, lick and dunk activity
for its promotion as well and has also used the concept of family and product features
which motivates this segment.

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PRODUCT STRATEGY (Shikha Mittal)

Oreo initially entered the Indian Market with Oreo Vanilla Cream biscuits. These were well
received by the Indian customers.

It is also planning to come out with Oreo Choco Cream. This new flavour was based on the
insights
Indians love the chocolate flavor, which is the single largest cream flavour in the
Indian market with a share of 45% of the cream segment.
44% of Indian households are sole chocolate cream consumers.
Oreo Choco Cream will be available in two SKU's across all retail outlets pan India.
Rs. 15 for a 6 unit slug pack of 58.8 gm
Rs. 30 for a 12 unit slug pack of 117.6 gm
B2B Market
Oreo is also promoting its use as a basic ingredient for various sweet dishes and desserts.
The idea is to let Indian players (in restaurants and QSR segment) innovate and come up
with their own versions of Oreo dishes.
It has collaborated with Caf Coffee Day to introduce a new shake , Crunchy Frappe ; Mc
Donalds to introduce Mc Flurry; Kwality Walls to introduce Oreo Swirl and very recently
with Mad Over Donuts.
These products are being backed up by digital marketing by respective companies in
collaboration with Oreo.
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This has the following advantages
1) Its creating a strong complimentary B2B market for the product.
2) New Oreo based products strengthen the brand, giving it publicity and visibility.
3) This helps in co branding and product extension.
4) It creates a greater youth connect (Increase customer Delight).
PRICING STRATEGY (Deepak Arora)

Initial Import Route:
Oreo entered India through the import route. The imported pack, consisting of 14
biscuits was initially launched at Rs. 50 (about $1).
Kraft realized their pricing flaw, that the product was prohibitively expensive for the
value conscious Indian Masses, who would usually buy biscuits at less than half the
price and simultaneously get more quantity too.

Subsequent Localization
The company therefore, in order to correct their action, chose to opt for localization
strategies. This resulted in a $19.1 billion acquisition of Cadbury in 2009.
The locally produced Oreo biscuits were priced at Rs. 5 for a pack of three, Rs. 10 for
a pack of seven and Rs. 20 for a pack of 14 for heavy usage, and carried a Made in
India tag on the packing.
The Made in India Tag meant using locally sourced ingredients, modification of
recipe to suit Indian tastes and possibly cheaper ingredients, a smaller size and
competitive prices
Cadbury cracked its distribution well for Oreo, given the correlation between
chocolates and biscuits. The company was innovative with lower-priced packs and
bet on the recognition for the foreign brand
The pricing strategy, especially for the 3 pack, allowed Oreo to drive impulse
purchases and trials from the Indian consumers.
Marginally cheaper than Britannias Jim-Jam treat which is priced at Rs 25 for 14
biscuits.
27 | P a g e

DISTRIBUTION STRATEGY (Rohit Batta)

The 'in-store behaviour' is the driver that leads to purchase at the point of sale. The factors
which have been exploited by Oreo to drive sales by understanding Indian consumer
behaviour are:
Availability Bold Display Eating Out Market

1. Availability
Availability is a major factor which affects buying of Indian consumers. This requires
a strong distribution network, Oreo took advantage of Cadburys intensive
distribution network to reach the Indian consumers.
Awareness generated at the 12 lakhs store reach of Cadbury and the display at the
point of sale has helped Oreo to acquire the Indian customer. Cadburys distribution
network includes 2,100 distributors (including super-stockists) and 450,000 retailers
Oreos launch was also combined with a rural thrust, in which the rural spokes were
offered schemes on target achievements for five months, the highest gift being a
laptop. The super-stockists were also offered incentives and recognition.

Figure 5: Oreo Distribution

(Source: Storm in a Milk-Cup: Oreo in India By Dev Narayan Sarkar)

28 | P a g e

2. Bold Display
A bright, bold design by Oreo attracts customers eyes. The train point of display stands out
from the rest of the merchandise at the point of sale.

(Source: http://www.behance.net/gallery/Oreo-Train-Display/3966785)

Visi-coolers
Visi-coolers are the special display cases that give Cadbury
visibility at the retail location and keep the chocolate from melting
in the oppressive Indian summer heat. According to a study, the
outlets that had Visi-coolers generated sales that were 15 percent
higher than those at comparable outlets. On the principle of
leveraging what works, it was decided to double the number of
locations with Visi-coolers, from 20,000 to 40,000 retail outlets.
The permanent in-store displays have been doubled from 5,000 to
10,000. The distribution has been expanded into 2,100 additional
towns and villages, bringing the total number of sales outlets to
550,000 in India.

29 | P a g e

3. Eating Out Market
Oreo is targeting to be more than a cookie. It is now a part of ingredient mix of delicacies of
quick service restaurants (QSRs), including ice cream shakes, donuts, and frappes. For
Example, Oreo Milk Shake are very popular in many QSRs. According to an executive of Mad
Over Donuts, 20% of their sale includes donuts with Oreo.
PROMOTION STRATEGY (Shikha Mittal)

Cadbury and Oreo
Kraft roped in Cadbury to for Oreo (globally its Krafts Oreo; In India its Cadburys Oreo)
because of following reasons
1) Cadbury has a stronger presence in India with superior marketing and distribution
hold, as compared to its parent brand Kraft.
2) Association with Cadbury brings perceptions like family bonding, traditions,
chocolate and delicious to mind. This re-enforces the Oreo Positioning, hence
giving Oreo a strong base here.

The brand is targeted to family with focus on consumption by next generation. The idea is
to make the new generation brand evangelist, when they grow up with TLD ritual.

Nielsen Research
Nielsen Research conducted in 6 cities to map Indian families views on evolving Children
and Parents relationship came out with findings that parents today crave more time with
their kids. In an international survey (The Global spirit of childhood report), three out of five
parents (63%) say spending time having fun with their kids is more important to them than
it was to their own parents when they were growing up.

Some of the important findings are
Not even half (47%) of all the mothers feel that the father in todays world is extremely
involved with their child
52% of parents expressed that they would like to have more knowledge on being a better
parent
30 | P a g e

Only 57% parents agree that it is the joint responsibility between the two parents to
bring up a child
69% of the fathers say their work-life balance does affect the level of involvement with
their child
A mere 44% of fathers and 43% of mothers are very satisfied with their work-life
balance
Only 55% of parents are very satisfied with their current level of involvement in their
childs life
A majority of Indian parents (77%) are ready to trade part of their salary in exchange
for more time with their kids
4 major activities where parents spend time with children are , Snacking , watching TV
at home, Helping in their studies and chatting with them.

Twist, Lick and Dunk
This ritual is a trade mark for the brand. It has created fun filled moments for family (based
on family bonding) in various countries globally.
In India the dunking ritual already existed prior to Oreo. Biscuits are dunked in tea and
eaten. Hence Oreo will not be building a completely new ritual in India. Consumer research
has shown, Indian consumers are looking for new innovative products, and Oreo with its
TLD ritual plans to give this innovation to its customers.

Father Son relationship
According to the Nielsen Survey, 94% of Indian parents convinced that it is extremely
important for fathers to spend time with children. With dynamic change in Indian Values,
relationships are changing as well. The survey confirms that 53% of Fathers say their
relationship with their kids differently as theirs was with their own fathers. The key factors
causing these differences are
1) Fathers are seen more of as Friends now
2) Better Education and awareness
3) Parents have a busy schedule (with both parents working, Fathers now plays more
part in domestic activities as compared to before).
31 | P a g e

A close bond with fathers in the growing periods of a child, also gives the child a
psychological edge. Hence Oreo has chosen Father-son relationship as a center theme for
their campaigns.

Father Daughter Duo
This campaign is based on the insight little girls are fond of playing their mothers role and
the liberties they take with their dad; the fathers have a compulsive need to indulge and
pamper his little princess. It explores the dynamics of a father & daughter relationship.

Siblings
The new ad campaign for Oreo Choco Cream captures the playful relationship of two
brothers. The brothers enjoying the snack face the dilemma which is chocolatier, the cream
or the biscuit itself. Its based on the unique relationship that the siblings share. It starts of
as a coach-student relation and eventually develops in one of equals, as they discover both
cream and biscuit are equally chocolaty.

32 | P a g e

Mass and Digital Media
(Supported by Interface Communication)
Oreo has high engagement score on social media with its followers. It keeps the
engagement high using various campaigns.

Facebook / Twitter (#DailyDunks)
The Facebook fan page has more than 3 million users. Oreo has launched a campaign called
Daily Dunks Focus. This campaign focuses on content with connect. Based on some
happenings in Indian context, some content with Oreo as theme is build immediately.

Youtube
Oreo launched its new flavor Choco Cream using Youtube and Facebook. The campaign
was named as Oreo Surprise which had a game at the end of which you could unlock the
new Choco cream TVC of the product.

Sahib, Sindh and Sultan, the ancestors of the
Indian Railways: On 16 April 1853 the first
passenger train was inaugurated between now
renamed Chatarapati Shivaji Terminus, Mumbai
and Thane. Covering a distance of 34 kilometres, it
was hauled by three locomotives, Sahib, Sindh and
Sultan.

Its a biscuit, its Oreo, its
Superman- A steel Oreo was
posted on Facebook page on Indian
release date of The superhero
movie Man of Steel. This one
received 6.5K+ likes, 136 comments
and 217 shares.

33 | P a g e

On Ground Activities
(Supported by Candid Marketing)
Cadbury is spending one third of its marketing budget on ground activities and in store
promotions. The segment being where all the brands are clustered together in large store
formats, Oreo has developed special Oreo Panels, to increase in-store visibility.

Oreo Togetherness
This campaign symbolizes the family togetherness. It was based on insight, There was a gap
between desired and actual time spent together by parents and children.
34 | P a g e

Oreo Togetherness Bus
This bus will travel to 9 cities New Delhi, Mumbai, Bangalore, Ahmedabad, Pune, Lucknow,
Hyderabad, Kolkata and Mysore. It will provide a platform for parents to bond and
interact with their family.

Consumer Behaviour and Some Concepts (Shikha Mittal)
1) Perception of Colour: Blue colour signifies Security, Dignity and Respect. Oreos
positioning around family and togetherness can be linked to this.

2) Figure And Ground : As seen the advertisements are centered around two themes
(Figures)
a. Twist, lick and Dunk Ritual
b. Togetherness (Father Son / Father Daughter Relation)
These are clearly separated from Ground (the cute graphics of kids and their innocence
being used). Hence the brand has successfully been able to put across its brand name and
proposition consistently through various media.

Special interactive activities around Twist
Lick and Dunk ritual were planned to be held
in the bus. Parents were encouraged to Take
Oreo Pledge, to spend more time with their
kids.
35 | P a g e

3) Relationship Pricing: The brand encourages long term relations with the consumers.
This is seen through their effort in Social Media campaigns (to increase consumer
engagements) and ad campaigns that touch real lives of people. This has also helped
in making a low involvement product a High Involvement one.

4) Normative Reference Group: All the campaigns are based on family and
togetherness. They directly influence the children and teens to buy the product. The
Togetherness Bus was also based on family concept. India being a High context
culture, this strategy has paid off efficiently. In a very small time Oreo gained 6%
market share of cream segment.

5) Needs Being satisfied:
a. Social Needs (Maslow Hierarchy of needs): The ads depict the need of a
strong and happy relationship between fathers and children. The
son/daughter seek love and affection from their fathers which they willing
giving.
b. Affiliation (Trio Of Needs): The young children seeking attention from their
fathers and taking liberties around them.

6) Motivation (Value Expressiveness): The various campaigns positively reflect
consumers lifestyle and values. The values of a strong father children relationship is
reflected consistently through the communication

7) Consumer Learning (Repetition): The twist, Lick and Dunk ritual is centered on this
concept. Though the concept pre existed in India, However using it with Milk had to
be built upon. Oreo did this through its consistent campaign message.

36 | P a g e

PACKAGING STRATEGY (Nikhil Gurg)

Packaging
Being a FMCG product, the brand requires to outshine
itself in the eyes of the consumer so that it can be
easily noticeable at the retail outlets among the
competing other brands kept in the shelf. This makes
packaging an important aspect of FMCG products.
As can be seen the product has been furnished into a
dark blue colour that is extremely brightening. The
company has followed the same concept of packaging
as used in the international standards. It still has kept the Cadbury logo because the brand is
launched under the Cadbury umbrella which is the subsidy of KRAFT Foods. The company
extremely believes in its Oreo ritual of twist lick and dunk in milk and thus they have
primarily launched the product with vanilla flavour showing white as symbol of both flavour
and milk and thus presenting the necessary benefits of the product.

The company has followed its the Indian standards in terms of packaging with a green
symbol representing the product as a vegetarian product and can be consumed by both
vegetarians and non vegetarians. The company also maintains the necessary disclaimers of
ingredients.

The packaging of the product should be so that it
explicitly signifies its benefits as expressed in the
product in terms of benefits of milk usage with
the product and the taste factor.

With bright blue colour for view noticing ability, milk and taste as its benefits and Cadbury
brand value, the packaging of the brand has been correctly made so that it achieves the
necessary consumer sight and thus becomes part of consumer choices.

37 | P a g e

PRIMARY CONSUMER RESEARCH (Nikhil Gurg)

Key Objectives
The Key objectives of the research are as follows,
Understanding of User preference in Biscuit Segment in terms of various factors like
Taste, Price, Variety, Flavour and Brand.
Understanding of competitive scenario of Oreo
Impact of these preferences with respect to different factors on the buying
behaviour of Oreo Biscuit.

Understanding of User Preference in Biscuit Segment

Figure 6: User Preference to Taste

Analysis:
It is clearly evident from the above analysis that users extremely favour those biscuit brands
which are favourable in terms of taste as 93% of the total users expect taste as a major
factor for buying biscuits. Thus this analysis can be beneficial for new product development
of Kraft Foods under the Oreo Brand. The brand should primarily focus on taste as key
aspect to increase customer base and market share.
74%
19%
3% 1%
3%
Taste
Highly Favourable
Favourable
Neutral
Unfavourable
Highly Unfavourable
38 | P a g e

Figure 7: User Preference to Price

Analysis:
It can be implied that though price is not highly favourable aspect while understanding the
buying behaviour of consumers for biscuit segment but it is a favourable feature. This is
primarily because of low involvement during the buying process. Yet brands like Oreo, which
target premium segment should have a pricing strategy such that it represents a status
symbol, gives the needful image of premium segment yet does not gives negative effect to
the buying process.

Figure 8: User Preference to Variety

0%
5%
10%
15%
20%
25%
30%
35%
40%
Highly
Favourable
Favourable Neutral Unfavourable Highly
Unfavourable
11%
38%
30%
14%
7%
Price
0%
10%
20%
30%
40%
50%
Highly
Favourable
Favourable Neutral Unfavourable Highly
Unfavourable
7%
41%
37%
12%
3%
Variety
39 | P a g e

Analysis:
Similar to price, variety is another factor for which though consumer prefer to have yet it
does not impact extremely on the buying process as 37% of the respondents are neutral for
the factor. In case of Oreo brand, it does not has any major variety in its umbrella hence it
does not impact much of the marketing strategy of the company.

Figure 9: User preference to Flavor

Analysis:
Flavour is again a major factor in terms of consumer buying preferences in the biscuit
segment with 83% of the consumers willing to buy particular biscuit if they find multiple
flavours of the brand. This can also been from the sales perspective where larger the
number of flavours, larger is the shelf space occupied and thus higher is the eye catching of
consumers. Kraft foods need to think into this aspect and should bring up a major strategic
effort in terms of flavours. This can be seen as the company has recently launched the most
appreciated chocolate flavour under the Oreo umbrella.

41%
42%
11%
4%
1%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Highly Favourable
Favourable
Neutral
Unfavourable
Highly Unfavourable
Flavour
40 | P a g e

Figure 10: User preference to Brand

Analysis:
Consumers in biscuit segment do prefer brand as one of the factor for the purchase but it
does not impact much. This is evident from the fact of highly fragmented market of biscuit
segment, large number of small and large players with lower market share.

Competitive Scenario of Biscuit segment
We have made the study keeping in mind the above factors and our discussion with retail
outlets of Katwariya sarai and on the basis of above discussion we came to the point that
Good Day (Britannia), Hide and Seek (PARLE), Butter Bite (Priya Gold) and Sunfeast (ITC) are
the major competitors of Oreo (Kraft Foods).

Figure 11: Brand Preference in terms of Taste

21%
34%
29%
8%
8%
Brand
Highly Favourable
Favourable
Neutral
Unfavourable
Highly Unfavourable
15%
62%
18%
3% 2%
Which brand do you prefer with respect to
Taste ?
Good Day
Hide and Seek
Oreo
Butter Bite
Sunfeast
41 | P a g e

Analysis:
As it is evidently seen that Hide and Seek is the market leader in terms of taste with majority
of 62% favouring the brand as having better taste than others. Though Oreo is next in the
preference but the difference between the two represent that Oreo needs much more
efforts in terms of marketing, product development to increase its preference.

Figure 12: Brand Preference in terms of Price

Analysis:
With only 12% prefer Oreo in terms of price, the company should look into its pricing
strategy. Though the results show Hide and Seek and Good day as market preference but it
should be also understood that our study has a limitation of respondents primarily from the
middle income segment and thus it may lead to limitation in results.

0%
5%
10%
15%
20%
25%
30%
35%
40%
Good
Day
Hide and
Seek
Oreo Butter
Bite
Sunfeast
Which brand do you prefer with
respect to Price ?
29% 38% 12% 17% 4%
42 | P a g e

Figure 13: Brand Preference in terms of Flavour

Analysis:
In terms of Flavour also Hide and Seek has been the market preference. Oreo, even though
has recently launched its second flavour of Chocolate is the second preference primarily
because of its twist lick and dunk choice of the product.

Figure 14: Brand Preference in terms of Brand

0% 10% 20% 30% 40% 50%
Good Day
Hide and Seek
Oreo
Butter Bite
Sunfeast
13%
48%
27%
9%
3%
Flavour?
23%
43%
29%
1%
4%
Brand?
Good Day
Hide and Seek
Oreo
Butter Bite
Sunfeast
43 | P a g e

Analysis:
Oreo has been a major preference in terms of brand preference among its market players.
With 29% preference the brand has started to become one of the major players even
though the brand has recently been launched in the market as compared to other brands.

11%
12%
25%
22%
30%
Flavour preference with respect to Oreo
biscuits
Highly Unfavourable
Unfavourable
Neutral
Favourable
Highly Favourable
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Highly
Unfavourabl
e
Unfavourabl
e
Neutral Favourable Highly
Favourable
Series1 8% 14% 45% 25% 8%
8%
14%
45%
25%
8%
Price preference with respect to Oreo biscuits
44 | P a g e

5%
23%
45%
21%
5%
0%
10%
20%
30%
40%
50%
Highly
Unfavourable
Unfavourable Neutral Favourable Highly Favourable
Variety preference with respect to Oreo
biscuits
5%
22%
19%
36%
18%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Highly Unfavourable
Unfavourable
Neutral
Favourable
Highly Favourable
Taste preference with respect to Oreo biscuits
11%
18%
23%
26%
22%
Brand preference with respect to Oreo biscuits
Highly Unfavourable
Unfavourable
Neutral
Favourable
Highly Favourable
45 | P a g e

REFERENCES

1) http://www.afaqs.com/news/story/30817_Twist-Lick-Dunk-says-Cadburys-Oreo-
biscuits : Last accessed on 7/7/2013

2) http://articles.economictimes.indiatimes.com/2011-03-03/news/28650799_1_parle-
products-parle-g-glucose-biscuit : Last accessed 8/7/2013

3) http://www.just-food.com/analysis/foreign-firms-face-fight-for-indias-biscuit-
market_id114659.aspx : last accessed 8/7/2013

4) http://www.hindustantimes.com/business-news/CorporateNews/Late-entrant-
Oreo-finds-Indian-consumer-willing/Article1-866005.aspx : last accessed 8/7/2013
5) http://www.exchange4media.com/50840_is-oreo-the-smartest-cookie-in-town.html
: last accessed 8/7/2013
6) http://www.domain-b.com/industry/Foods/20110304_kraft_foods_oneView.html :
Last accessed 9/7/2013
7) http://www.medianewsline.com/oreos-new-tvc-showcases-playful-relationship-
shared-by-two-brothers/ : Last accessed on 9/7/2013
8) http://www.campaignindia.in/Article/252877,oreo-introduces-india-to-the-twist-
lick-dunk-ritual.aspx ; last accessed on 9/7/2013
9) Source : http://lighthouseinsights.in/how-oreo-indias-daily-dunks-are-being-lapped-
up-on-social-media.html - last accessed 17/7/2013

CB Group 3 Final Report - Oreo

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