Essay on Poverty and Danone

Decent Essays

Week 5 Assignment 1
Danimal in South Africa Case Study Assignment



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 …show more content…

Is Danone successful in addressing the needs of the bottom of the pyramid? What can they do better?
Pretorious had the 4P’s in mind when product was developed. The price was initially set at R1.00 in 2005. This was beneficial since the transaction would require one coin interaction which made it simple and valuable for the targeted children’s market. To avoid additional margins added onto the final price, the price was printed on the lid. Danone themselves just broke even with no profits.
To address nutritional shortcomings in the typical diet of a child from a poor family — especially vitamin A, iron and zinc — the company wanted to enrich the yoghurt with these nutrients. The yoghurt also needed an extended long shelf life due to lack of electricity and fridges.

Danone promoted their product, by associating the name “Danimal”. Danimal was combination of “Danone” and “animal”, which gave a sense of pride in Africa. A colorful energetic leopard as the logo appealed to children, while the nutritional facts appealed to the adults.

They created a product for the bottom of the pyramid that was initially introduced into the Gauteng province but later expanded into two other provinces, Kwazulu-Natal and the Free State.
I think that Danone did a great job by providing the needs of the bottom of the pyramid. They spent little money and used existing equipment with no marketing. They made a product that was

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