Dannon

Dannon’s Success in the US Yogurt Market

Daniel Carasso established the Dannon firm in 1942 after moving to America. He felt that the company’s original name, Danone, was too French for Americans, so it was changed to Dannon Milk Products. Additionally, the rebranded business had to adopt a different approach than the one the parent company had been applying in other nations. The market for yogurt in America was new. Even with a new product, the company was able to successfully open a new market thanks to a mix of creative marketing techniques and a dedication to consistently producing foods with health advantages. In the 80’s Dannon eventually grew to become a subsidiary of the parent company Danone and had within that period grown to more than 17 categories. Their corporate strategy was targeted at growing their sales and in the process increase the consumption of yogurt in the United States. Compare to other countries, the US was still considered an emerging market when it comes to the consumption of yogurt as recent as 2007 (Marquis, Shah, Tolleson & Thomason, 2010).

Formulating a New Marketing Strategy

In 2009, almost seven decades after venturing into the North America market, the management of the company undertook a new strategy to that would help the organization progress forward. This plan was seen as the next logical step towards becoming the leader in the yogurt market. The company’s executive for public relations, Michael Neuwirth, was tasked with identifying how the long-standing traditions at the company could be effectively used to aid in the formulation of a new marketing strategy. They had to choose between using the company’s track record in CSR initiatives or using a more internally focused method.

Communicating the Company’s CSR History

The company’s initiative dubbed “Give Hope to Every Cup Campaign” proved that they could improve its sales through increased public awareness. The highly publicized campaign served to increase awareness among its customer base just how much Dannon company, as well as its parent company, greatly value CSR as an integral part of their business model. It also demonstrated how the history of the company’s entire corporate structure is the basis of their strict policy of public transparency. Additionally, this campaign also helped the organization eliminate a competitive advantage held by a competitor. Previously, an industry rival Yoplait had created a campaign “Save Lids to Save Lives” to dramatically increase their sales (Marquis, Shah, Tolleson & Thomason, 2010).

This strategy was successful as can be seen by how they gained increased media coverage and also received many responses. The polling numbers indicated that consumers in the US were more likely to buy from a company that has previously supported a nonprofit initiative or organization. The increase in sales, as well as the increased public exposure, are an indication that this strategy is most appropriate and the company would gain numerous benefits by communicating to the public. Examining this decision from the perspective of the management, they would only have to add the public as the new group of stakeholders.

Impact of the Corporate Parent

Any undertaking by Dannon Company that increase social awareness and consequently the market share in the US should be seen as a reflection of the larger Danone corporate philosophy. Danone views CSR as a core component of their organizational vision hence their mission statement “To bring health through food to as many people as possible.” (Marquis, Shah, Tolleson & Thomason, 2010, p. 491).

In their efforts to implement this vision in practice, the company focuses on three areas; nutrition and health which can be seen in the research and education institutes established in various counties, placing great value on people both within the organization and the external stakeholders, and nature which can be seen in the measure taken to reduce the carbon footprint.

Danone encouraged its subsidiary to take up all these in their CSR strategy. Dannon also recognized that its initiatives were not in opposition to the financial expectation of their parent company. Rather the top management embraces them as key contributors to the success of the organization. Dannon on its part has demonstrated a willingness to continue the traditions of the parent company as a strategy to increase their market share.

Communication Strategy

There was already a communication strategy in place when, Michael Neuwirth, began engaging with members of Dannon company’s top management. He had opened dialogue in a bid to understand the CSR programs from the perspective of the consumer. Therefore, since Dannon Company’s strategy is aligned to CSR and they already have an internal structure in place, the focus should be on how to effectively extend these communication channels to the public.

First Dannon company should educate the communities living around its factories about hoe CSR contributes their well-being. Their message should be premised on how CSR activities are directly tied to organizational objectives (Ranchhod & Marandi, 2006). On communication channels, the company should increase the frequency of periodicals like newsletters, CSR audit findings, press releases as well as marketing campaigns with the primary message being the health benefits of their products. While implementing these methods, the company should bear in mind that the point is not just to advertise their products but also show the company’s track record of CSR.

Also, the company should implement a transparent public forum, most preferably in an online environment such that it is accessible at any time. Through this forum, the company would be able to exchange ideas with its customers more efficiently. This creates a feedback loop that is important for sustaining long-term sustainability (Kim & Ferguson, 2017).

The most effective way Dannon could determine the effectiveness of their CSR programs by communicating directly to all stakeholders. Such a direct approach also provides a roadmap for the company to develop new CSR techniques while also ensuring the current ones are not outdated and ineffective.

Conclusions

This analysis shows that Dannon Company already has a significant advantage over their competitors. While most other organizations struggle to define how CSR fits into their business model, Dannon has an advantage in that its parent company that has embraced this concept as part of their business practices. Danone company believes in doing what is right not just because it what is expected of them, but also because it makes business sense.

Despite their impressive record when it comes to CSR activities, Dannon needs to improve on openness and transparency to the public, a concept they are beginning to embrace. In the internet age has made the world smaller and information can reach all parts of the globe at near instantaneous speeds. The company should take advantage of the internet to communicate their positive initiatives and benefit from these efforts. According to Kartajaya, Kotler & Setiawan (2013), consumers in the contemporary business environment reward environmentally and socially responsible organizations through loyalty. From a fiscal perspective, the company would benefit by gaining a higher market share. Internally, the company also benefits by gaining a proven strategy that can be used as a blueprint for competing with industry rivals in the future. The case of Dannon contributes to the many organizations that have demonstrated that CSR and profits can coexist to the benefit of all stakeholders.

References

Kartajaya, H., Kotler, P., & Setiawan, I. (2013). Marketing 3.0. Hoboken, N.J.: Wiley.

Kim, S., & Ferguson, M. A. T. (July 05, 2017). Dimensions of effective CSR communication based on public expectations. Journal of Marketing Communications, 3, 1-20.

Marquis, C., Shah, P., Tolleson, A., & Thomason, B. (April 01, 2010). The Dannon Company: Marketing and Corporate Social Responsibility. Harvard Business Review. Retrieved from https://hbr.org/product/the-dannon-company-marketing-and-corporate-social-responsibility-a/410121-PDF-ENG

Ranchhod, A., & Marandi, E. (2006). Strategic marketing in practice 2006-2007. Oxford: Butterworth-Heinemann.