Personal thought about Korean snack brand :)
Have you tried the cookie made by Kraft, Oreo? Can you think of any foreign snack brand?
In Korea, there are many popular snack brands such as Nongshim, Orion, Haitai, Lotte, and Crown perhaps. I wonder if there is any Korean snack brand that does a good job in foreign countries. I got a chance to think more about these brands and how they manage their business domestically and internationally. Although I didn’t do research about their business expansion outside of Korea, I assume that these brands at least have been a good job to fit Koreans’ tastes. How about foreigner’s tastes? Have they thought about foreign consumers trying Korean snack? How about globalization of their business?
Oops, Kraft’s Mistake!
I read an article about Kraft’s global expansion on their star product, Oreo. Among plenty of famous products by Kraft, Oreo, if you know well about this snack, has been a star product of Kraft. Not only Kraft itself produces high revenues in U.S. but also other foreign countries as well, especially China. Actually, Kraft didn’t catch the Chinese’ tastes who aren’t big cookie eaters. Besides, traditional Oreos were too sweet for Chinese tastes. Also the price was too expensive where the package of 14 Oreos priced at 72 cents. According to the article, the market for biscuits in fiscal 2007 was just $1.3 billion, compared with $3.5 billion in the U.S. at food retailers excluding Wal-Mart Stores Inc. Based on this factual result, Kraft reformulates Oreo from the original.Kraft’s Localization Strategy in China :)
Not from marketing class but from strategic management class that I am taking this semester, I learned various strategies applying to various situations. Few days ago, we talked about Starbucks and their globalization as the strategy of expanding the business outside of U.S. where their original business has started. What Starbucks used for the globalization was localization strategy where pressure for local responsiveness is high and pressure for cost reductions is low. For example, Starbucks came to Korea and open many stores in many different places focused on each place of Korea’s local conditions. Also in China, Japan, and Brazil, Starbucks applies different strategies to make high customer satisfaction. Reading this article, I thought Kraft might have adopted this localization strategy as they attempt to establish the business in foreign countries. Kraft considered the Chinese’ tastes for their number one product, Oreo whether it fits Chinese people tastes or not. They had to consider Chinese eating habits or cultures and perhaps their perception of U.S. snacks. Among four national competitive advantages, Kraft took ‘local demand conditions’ as the biggest national competitive advantage and worked on it for Chinese consumers. I found that this was part of the Rosenfeld’s idea who is the CEO of Kraft.
Concluding thoughts of New form of Oreo :)
Unlike original Oreo, Kraft created different shapes of Oreo but the same ingredients perhaps with low sugar contain for Chinese people. The new Chinese Oreo consisted of four layers of crispy wafer filled with vanilla and chocolate cream, coated in chocolate. I could find the new form of Oreo in our school convenient store as well. I didn’t check the price but it was interesting to see this different series of Oreo and that product caught my attention to buy and try. In my opinion, Kraft’s analysis on the global environment in China was very outstanding that Korean snack companies should try in foreign countries not just selling in Korean town. We need to take globalization more seriously and apply appropriate localization strategies to appropriate environment. Reference
http://online.wsj.com/public/article/SB120958152962857053.html?mod=2_1567_topbox
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