Danone Dumex competitive edge

How does a Danone Dumex (Malaysia) Sdn Bhd SHAMSUDIN, SITI AKMAZNI maintain the brand’s competitive edge?

1.0 Introduction

1.1 COMPANY BACKGROUND

Danone Dumex[1] is part of Groupe Danone, a Fortune 500 company which was operate since 1958, one of the most successful healthy food companies in the world. Its headquartered is in Paris, France. Besides, Danone Dumex manufactures infant and child nutritional products and these products are then distributed in Singapore and Malaysia with exports to twenty countries in Asia, Middle East, Africa and Europe. It is the market leader and ranked number one in overall customer satisfaction in a study conducted among medical professionals and the retail trade by AC Nielsen. Then, it is also named as a Top Three Brand Family by AC Nielsen in 2002 and 2003, as well as Best Employers in Malaysia for 2003 and 2005.

1.2 Justification of the topic

In this assessment, I have choose Danone Dumex company because it has higher market share that lead it become a market leader in infant growing milk formula industry. As a manufacturer of infant and child nutritional products, all its products provide the right nutrition for optimum growth and development especially support a good digestive system of children at different stages.

Besides, this company has an international relationship with Singapore, Brunei, Middle East and Africa in exporting its products. Thus, here, we can say that it is a multinational company in this industry. So, because of this, I want to investigate and do research about this company in this assessment.

2.0 Findings

2.1 New logo and packaging

Recently, Danone Dumex (Malaysia) Sdn Bhd is thinking to rebrand its products. In this rebranding, Danone Dumex change logo and packaging[2]. The packaging was modern, dynamic and contemporary look and feel according to the Danone Dumex’s sales director, Joris Bernard and GCH Retail (M) merchandising director, Ian Cruddas[3].

2.2 Long-relationship with Malaysian parents and children

Danone Dumex also want to communicate and commemorate long-term relationship with Malaysian parents, children and with the people outside. As it has a new brand identity, this will lead to customer’s loyalty to its products[4]. Hence, this sale of new product of Danone Dumex will boost its market.

2.3 Price

Usually, as a market leader, the price of the products will be increase. But, for this company, Danone Dumex products are expected to not increase in price. It thinks and confident that the sales of its products will boost the markets and thus, cover its probably loss[5] from the cost of production, promotion and cost to advertise the products.

3.0 ANALYSIS OF THE ISSUES

3.1 Current Situation

Product life cycle[6] is used in this analysis to show points at which businesses may need to consider launching new products, as older ones are in decline, allow a business to plan different styles of marketing, help a business to manage its product portfolio and identify points at which extension strategies may need to be introduced or should no longer sell a product. (Dave Hall, page 179).

Hence, in this situation, Danone Dumex products now in maturity stage because its products have become established with a stable market share, as a market leader (Dave Hall, page 116 and 117) and the sales are clearly higher than any competing businesses in the same market (Peter Stimpson, page 135).

Introduction Growth Maturity Saturation

3.2 New logo and packaging

As a market leader and its products are at maturity stage, the competitors will enter the market to take advantage of profits. Thus, Danone Dumex decided to rebrand its products because it wants to maintain the brand’s competitive edge[7] where it is one of the advantages of rebranding. (Dave Hall, page 204 and 205). These can allow people and customers outside alert quickly with its products and expected the new sales will boost the sales of the products[8].

3.3 Long-relationship with Malaysian parents and children

The launch of its new brand identity had cause Danone Dumex to both communicate and commemorate their long-term relationship with Malaysian parents and children[9]. When having a long-relationship with Malaysian parents and children, this will help this company to get back in track and the new sales of the products will boost the sales.

3.4 Market leader

From the article[10], Danone Dumex is the market leader in infant milk formula in Malaysia, which also has a market share about 40.9% in the year-to-date June period 2009 in the Standard Growing up Milk (GUM). It is also currently sells and exports its products to Malaysia, Singapore, Brunei, Middle East and Africa[11] that cause it to have higher market share and growing in market. Being a market leader, it will achieve the competitive edge because competition has become stiff for players in the growing up milk formula industry and this will not be a risk faced by this company.

3.5 Price

The products can be expensive to promote and maintain the brand. An establishing a successful brand in a competitive market can be very costly. Small business may not be able to afford this. (Dave Hall, page 202). Cost of production, promotion and market the product will be higher as it is a new looks product. But in this situation, Dumex does not plan to increase prices of its products[12]. As a result, Danone Dumex’s products are remaining in gaining the profit because of the loyalty customer in buying Danone Dumex’s products[13]

3.6 SWOT Analysis of Danone Dumex

To see the problem faced by this company clearly, I use SWOT analysis to access the present position of this company, the future or expected possible changes.

Strength

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