Essay on How Craft Changed Oreo Marketing Strategy in China

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How Kraft Changed the Oreo and Its Global Marketing Strategy for Success in China

Gale Business Insights: Global Case Study Collection

Learning Objectives

After analyzing this case study, students should be able to do the following:

Explain at least three benefits of market research in product development for international and emerging markets
Identify traditional and nontraditional strategies for increasing revenue through entering new global markets
Appreciate the effect of cultural norms and tastes for firms expanding to new markets
Discuss how firms can focus products to local tastes while increasing brand value globally
Introduction

One of the more popular strategies for firms to increase profits in the 21st century
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Sales had been flat for the first five years of the 2000s and were in decline. "In 2007, Kraft Foods China was an unprofitable, $100 million business that was not growing," noted Sanjay Khosla, Kraft Foods’ president of developing markets, in an interview published by the Boston Consulting Group. Kraft was even thinking of pulling the product out of the Chinese market completely, due to poor sales.

The company as a whole was performing poorly. This led to a shake-up of executive management in 2006, with Irene B. Rosenfeld installed as chief executive officer (CEO). Rosenfeld had previously worked at Kraft for 22 years before leaving in 2003 to head Frito-Lay North America. In early 2007, Rosenfeld outlined a strategy to turn the company around that included product quality, research and development (R&D), and acquisitions as critical to the future growth of the company. Rosenfeld hired cutting-edge business leaders such as Khosla to help create the strategy that would change the way Kraft Foods Inc. does business.

Fewer, but Larger Bets: Growth Through Focus and the 5-10-10 Strategy at Kraft Foods

When Sanjay Khosla left Fonterra Group in 2007 to spearhead Kraft Foods’ business in developing countries, he was tasked with discovering a way to realize the potential for growth in developing markets that had eluded Kraft and so many other large, successful

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