Essay Instructions: Please write about 100 words for the discussion post. Add about one source per topic if possible, if not its ok.
Please read the case study and answer the 2 questions at the bottom. No sources necessary.
THANKS!!!
DP 5
Answer the following discussion questions this week. You need to answer at least one DQ by the end of Wednesday so that your classmates have some discussion items to encourage discussion before the end of the week. Be aware that the concept of shared learning mandates your participation before the last day of the week. If you only contribute DQ submissions on Sunday, you have not met this requirement and you will receive only half credit for your submissions.
1. Name some examples of national symbols, and explain how these symbols might be used in marketing.
2. Explain the difference between enculturation, acculturation, and socialization. Why are these processes important to marketers?
3. Why are subcultures important to consumers?
Case Study 5
Campina (http://www.campina.com)1
By Dana Lascu
Case Outline
. C-1 Industry Trends
. C-2 Meeting Competitive Challenges at Campina: ?Adopting a Market Orientation
. C-3 International Expansion at Campina
Discussion Questions Notes
Campina is one of the leading dairy companies in the world and one of the few that produces only dairy products. A European company that remains close to its Dutch roots, Campina?s image evokes picturesque Dutch cow pastures and healthy lifestyles. The com- pany?s history can be traced to the Eindhoven area in Southern Holland; a dairy cooperative with the name ??De Kempen?? was created in 1947 and used the brand name ??Campina.?? In 1964, the cooperative merged with another cooperative in the Weert region in Holland and formed Campina, named after a regional moor. After several consecutive mergers?more recently, with Melkunie Hol- land?Campina Melkunie (or Campina, as it is informally known) became the largest dairy cooperative in the Netherlands.
In the Netherlands alone, Campina boasts 7,500 member dairy farmers. The farmers own the cooperative; Campina must buy all the milk the farmers produce, while the farmers must finance the cooperative, and in return, obtain a yield of the products sold. Campina itself is a nonprofit organization. Member farmers receive all the company profits. They have voting rights in the company that are proportional to the amount of milk they deliver, and they are represented by the Members? Council, the highest managerial body of the cooperative.
The separation between Campina, the operating company, and its cooperatives is evident: Campina is headquartered in Zaltbommel, in an industrial park in Southern Holland, while the dairies are located close to the consumers they serve, in different areas of the country.
C-1 Industry Trends
Several trends can be seen in the international dairy industry, in particular consolidation. The number of dairy companies is falling, and the production capacity of those that remain is increasing and becoming more efficient.2 Yet there are still companies that exist successfully in the $100 million to $200 million range of sales, surviving through a mix of ingenuity and innovation.3
The European Union remains the world?s top dairy producer, manufacturer, and trader of dairy products. Because the EU is a mature dairy market, the emphasis is on value growth and process- ing milk into products with high added value.4 As such, Campina?s strategy and general mission of ??adding value to milk?? fits well with this trend. Of the world?s top 25 dairy organizations, 14 have their headquarters in Europe.5
The degree of concentration varies significantly, however, from region to region. In Scandinavia and the Netherlands, a handful of major cooperatives dominate. In Greece, there are more than 1,000 dairy businesses, of which more than 700 make cheese. In Germany, where the industry was once comprised of numerous small, local- ized firms, most milk processors are either collapsing or merging. In France, the top five companies control 55 percent of milk produc- tion. In Scandinavia, the major players wield even more control: in Denmark, MD Foods (http://www.mdfoods.dk) and Klover Maelk control 95 percent of milk production, and in Sweden, Arla (http:// www.arlafoods.com) handles 80 percent.6
Another important trend is the focus on convenience (a pack- aging issue) and on value-added nutrition for functional foods (a product ingredient issue). Changes include creating new packaging and unique containers for innovative products. For example, Ger- man-based Schwalbchen Molkerei (http://www.schwaelbchen- molkerei.de) has debuted Go! Banana, the first milk energy drink made from fresh milk and real, pureed bananas, packaged in 330 mL Tetra Prisma cartons with fluted sides. Spain?s Pascual Dairy (http://www.lechepascual.es) offers a milk-based energy drink, Bio Frutas, in two flavors: Tropical and Mediterranean. German milk processor Immergut (http://www.immergutrocken.de) as intro- duced Drinkfit Choco Plus, a vitamin-fortified, chocolate-flavored milk, in the same carton. The United Kingdom company, Miller, (http://www.miller.co.uk) offers dual-compartment, side-by-side containers of refrigerated yogurt, while a new drinkable fruit yogurt from Nestle SA (http://www.nestle.com) debuted in the United Kingdom under the name Squizzos, sporting Disney Jungle Book characters in a triangular-shaped package that is easy to tear, squeeze, and drink.7
Cheese is also presented in innovative packaging. Baars, a subsidiary of the BolsWessanen Group, a United Kingdom Dutch company, launched a smooth, flavorful medium/mature cheddar cheese, called Maidwell, that does not crumble; it is sold in an attractive, innovative, clear-plastic, resealable pack. Rumblers, a convenient all-in-one breakfast product manufactured by Ennis Foods Ltd., United Kingdom, is also available in an innovativepackage that holds cereal and fresh, semiskimmed milk separately, all in one pack.8
Functional ingredients (health foods or ingredients that enhance the nutritional value of products) represent yet another important trend in the dairy industry: Dairy products represent the most important sector for functional foods, accounting for 65 percent of sales in a sector that is very buoyant given the consumer interest in health and diet.9 The leading companies in Europe in this domain are Campina Melkunie (Netherlands), Nestle (Switzer- land), and Danone (France) (http://www.danone.com).10 World- wide, Japan leads in the functional foods trend and is the only country with a regulatory policy, called FOSHU (Foods for Speci- fied Health Use), on such foods.11 There is a tradition of lactic acid bacteria culture drinks and yogurts in Japan, and many of these fermented drinks and yogurts contain other functional ingredients, such as oligofructose, calcium, and DHA, a polyunsaturated fatty acid derived from fish oil that is said to improve learning, lower blood pressure, help prevent cancer, and lower serum cholesterol.12 From Dairy Gold, Australia, comes Vaalia Passionfruit Smoothie, a low-fat milk-based drink containing 25 percent fruit juice, acid- ophilus and bifidus cultures, and insulin.13
C-2 Meeting Competitive Challenges at Campina: Adopting a Market Orientation
Historically, milk production has been supply driven, and excess milk has been used to produce cheese and powder milk. This strategy led to excess cheese/commodities on the market and the need for subsidies. Campina initiated a change in this arrange- ment. In the past 15 years, the company has been demand driven: Farmers are assigned production quotas that they are not allowed to exceed.
In another attempt to adopt a market orientation, Campina decided to eliminate all milk powder production because milk powder is a low-margin commodity. Instead, the company is focus- ing on building the brand to ensure recognition by consumers as a value offering and as a quality brand name.
According to R. J. Steetskamp, Director of Strategic Business Development at Campina, the company examines consumer behav- ior to determine where to fit Campina products in consumers? lives. As a result of its research, Campina offers four categories of products:
1. Indulgence products. This category constitutes an important growth area for the company. Campina produces numerous milk-based desserts, with the exception of ice cream? primarily due to the product?s seasonality and the logistics strategies involved in the transportation and storage of ice cream, which would differ from those for the rest of the company?s offerings.
2. Daily essentials. This category includes Campina products that shoppers purchase routinely, such as milk, buttermilk, yogurt, coffee cream, butter, cheese, and other items. Campina, using a strategy employed by all its competitors, also sells daily essentials under dealer (store) brands, rather than under its own brand name. For example, in Holland, it sells milk, plain yogurt, butter, Gouda cheese, and vla (chocolate or vanilla custard) under the Albert Heijn brand name. Albert Heijn is a dominant, quality supermarket chain in Holland owned by Royal Ahold?a large conglomerate that also owns supermarket chains in the United States (BI-LO, Giant, andStop & Shop). The company also sells daily essentials underdealer brands in Germany.
?3. Functional products. According to Steetskamp, this productcategory needs to be further explored and defined by the company. In this category are health foods and other milk- based nutritional supplements. DMV International is a Campina division that is present all over the world; it produces pharmaceutical products, food ingredients, and ingredients used to enhance the nutrition of consumers and their pets, such as proteins and powders with different functions. All these products are milk-based, and many of them are well known. For example, Lactoval is a popular calcium supplement.
4. Ingredients (food and pharmaceutical ingredients). This product category targets other food product manufacturers, rather than individual consumers. The primary purpose of the food and pharmaceutical ingredients is to enhance the quality, taste, texture, and/or nutritive content of the products manufactured by Campina?s clients. The company?s Creamy Creation unit specializes in blending dairy and alcohol to make various cream liqueurs, leading to both healthy and indulgent drinks. In this category fall meal replacement drinks and high protein drinks as well. With this category, Campina becomes a supplier to other manufacturers, rather than strictly a product manufacturer distributing to supermarkets.
C-3 International Expansion at Campina
One of the most important undertakings at Campina in the last decade was to expand beyond the Netherlands. In its first expansion effort, the company bought Belgium?s Comelco, another dairy cooperative. In Belgium, the company boasts the Joyvalle dairy products and milk brand and the Passendale, Pe`re Joseph, and Wynendale cheese brands, all marketed under the Campina umbrella brand.
Campina also expanded into Germany, purchasing a num- ber of cooperatives: Sudmilch (Southern Germany), Tuffi (West- ern Germany), and Emzett (Berlin). In Germany, its primary brand is Landliebe. There, the company sells Landliebe milk, cream, yogurts (seasonal, fruit, plain, and in different types of containers); different types of puddings including rice pudding, ice cream, cheese, and qwark (a traditional creamy cheese), plain or with fruit; yogurt drinks (with fruit flavors such as banana, cherry, lemon, peach, and orange); and different milk drinks with flavors such as vanilla and chocolate. The company also offers products such as coffee machines, cups, spoons, and other items for purchase online at its site, www.landliebe-online.de. According to Steetskamp, the Campina name will be used as the umbrella brand for all the company products; the name comes from the Latin ??from the land?? and is easily pronounced in all the different languages in Europe, the brand?s target market. The only brands that will not be brought under the Campina umbrella brand are the Mona brand in the Netherlands and the Landliebe brand in Germany because both have high brand franchise with consumers in their respective countries. Interest- ingly, the Landliebe brand name is close in meaning to Cam- pina, both making reference to the land.
As a result of these acquisitions and mergers, according to Steetskamp, Campina is the market leader in Holland, Germany,and Belgium. As the company website states, ??Campina is a house- hold name in the Netherlands, Belgium and Germany.??14
Campina has further expanded, with its own subsidiaries in the United Kingdom, Spain, Poland, and Russia, where it ultimately plans to use the Campina brand name. Already, the Campina Fruttis brand is one of the most popular fruit yogurt brands in Russia.
Discussion Questions
1. R. J. Steetskamp, Director of Strategic Development at Campina conducts consumer behavior studies to determine where to fit Campina?s offerings. What kind of consumer behavior concepts and models may help drive this research? Explain.
2. Campina is developing new products and new markets. The company is conducting consumer behavior studies to help with this effort. What kind of consumer behavior concepts and models may help drive this research? Explain.
