Market Analysis, Competition and Target Customers Analysis

As the macro- and meso-level analyses have shown (see our posts from 4/22/2014), there are a number of favourable factors for launching such a premium chocolate-coated biscuit in Russia, as Oreo. Let us remind you that due to the growth in population’s disposable income, premiumisation has become the strongest trend affecting the biscuits market: chocolate coated biscuits category is set to demonstrate the highest retail value growth in 2013 at 14% as it is perceived as the premium product (Passport GMID, 2014). Moreover, Russian consumers demonstrate little brand loyalty and find themselves in constant search of novelties – the trend that we will capture by introducing the new and bright brand of Oreo. 

However, Oreo will have to survive in a fierce fight with competitors, as the internal rivalry has been established to be severe (see our posts from 4/22/2014). First of all, let us consider competitors of potential Oreo producer in Russia - Mondelez Rus OOO. In the following, you can see the bar chart of biscuits market concentration in Russia.

Source: Passport GMID, 2014

As we can see, market concentration is very low and competitors are struggling with each other for market share. What is optimistic for Oreo launch based on these data is that its potential producer, Mondelez Rus OOO, is the market leader and consequently will have much power, resources, established distribution channels, connections, etc for introducing the new brand into its Russian portfolio.

However, we should not disregard the risk that Oreo might cannibalize other brands in Mondelez Rus OOO’s portfolio. Being one of the top brands for Mondelez Rus OOO, Yubileinoye is also the second-leading brand (4.1% value brand share in 2013 (Passport GMID, 2014)) of the whole Russian market for biscuits, running closely after the brand Lyubyatovo by United Bakers OOO (4.9% value brand share in 2013 (Passport GMID, 2014)). As Yubileinoye is known to have chocolate-coated biscuits line and any chocolate-coated biscuit is perceived by customers as premium (Passport GMID, 2014), it might become a competitor with Oreo and cannibalization might take place. This is certainly the situation we need to avoid. 

So, in order to prove Yubileinoye and other Mondelez Rus OOO brands’ potential for cannibalization by Oreo, we included a question on what biscuits brands consumers most frequently buy in our survey (https://docs.google.com/a/student.spbu.ru/forms/d/1qVlk4o8zFpI07V8lq31kztt-05A0s2ccVYR-VYK6fGI/viewform). Judging by the answers to this question, we shall identify potential Oreo’s targets for cannibalization, study their positioning and, when working out a strategy for Oreo, we shall take it into account and position Oreo in a different way to avoid cannibalization (more information on this topic will be posted in our Brand Strategy post).