Running head: GRAMEEN DANONE FOODS 1

Grameen Danone Foods

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GRAMEEN DANONE FOODS

Grameen Danone Foods

Introduction

Grameen Danone Foods LTD is a leading novel food industry in Bangladesh. It was

formed as a result of a joint venture between Grameen group and Danone Asia Pte.Ltd. The

company produces Shokti Doi plus, a nutritious yogurt, which is a milk product meant for needy

children. The target market is in rural areas. The study will discuss the four elements of the

marketing mix, the strategies for social marketing, and the VFBOP entry model for international

business. The four aspects of marketing, also known as the 4 p’s to include product, pricing,

promotion, and distribution.

The four P's product, pricing, promotion, distribution

Grameen Danone specializes in yogurt as the primary product, locally known as Shokti.

The yogurt has been made available specifically for children that need nutrition. Shokti suits

local taste in that it is sweeter and thinner. However, Shokti yogurt is available at an affordable

price. Grameen Danone fortifies Shokti with thirty percent of vitamin A, zinc, and iodine (Akter,

Jamal, Ashraf, McCarthy, & Varsha, 2019). To keep the cost down and prices low, the factory

makes use of the locally available materials. Small-scale farmers are the ones who supply milk,

which is the main ingredient. The price of yogurt has been made affordable for customers. There

is a different price for the urban and rural areas considering the purchasing power of people in

urban areas is higher compared to rural areas.

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Promotion is mostly done by word of mouth. As a brand name, Shokti has had a

considerable impact on the promotion of the product. It means “yogurt for power,” having a

symbol of a muscled lion on it. Lion-dressed mascots are also used in the promotion representing

the benefits of taking yogurt. The use of the renowned footballer Zinedine Zidane for advertising

contributed instant recognition for the novel JV and its yogurt.

Moreover, in a bid to strengthen their promotion, Grameen Danone engaged nutritionists

to explain how the yogurt could help children recover any substantial loss from formerly

deprived nourishment. Distribution is done through two channels; through the shops and also

through door to door. The village shops are small while there is a bit larger store in urban areas.

In Bangladesh, poor mothers are trained and employed for the door to door sales. Trained

mothers are supplied with yogurt and insulated bags. They are also shown how to use insulated

containers and advised only to carry what they can sell at the moment to avoid spoilage.

Strategies for social marketing

Grameen Danone marketing strategy emphasizes on two main areas, make the product

get to households and also to send an appropriate message to the customer. Grameen Danone

made sure that they delivered a product that suited the local taste. There are many activities by

Grameen Danone Foods linked to social marketing which include, providing education to their

consumers about their nutritional requirements, health matters, and setting up rural sales and

supply structures. GDF has arrangements in place to reduce poverty as well as improve

malnourishment situation among rural children. Through the distribution channels, the GDF Can

sell fortified yogurt to impoverished slums children at affordable prices. The involvement of

women by GDF in their company’s value chain has dramatically improved their lives. Poor men

and women have grown from aid beneficiaries into producers, suppliers, distributors, and also

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customers. According to (Rangan & Lee, 2012). Two hundred eighty farmers are suppliers of

raw milk,30 residents work in maintenance, quality control, and production departments,175

women work as sales ladies distributing Shokti+ in the rural areas.

VFBOP entry model for international business

The ‘Bottom of Pyramid’ is a model propagated by C.K. Prahalad.it encourages

companies to try their luck in undeveloped and unattended markets at the BOP. Emerging

markets are growing in diversity hence creating a need to review market entry and development

strategies. About 70% of the world population is a potential market, with consumers having little

or no income. Most global market policies somehow ignore BOP as a possible the world's largest

market. Although the group has a yearly buying power of less than USD 1.5, it represents almost

90% of the developing world (Peerally, De Fuentes, & Figueiredo, 2019). It is a real struggle for

the BOP to access most public services and also public amenities such as fresh drinking water.

According to the studies, the sector represents 10% of the BOP market. According to Rangan,

and Lee (2012), in Honduras, Tegucigalpa, communities have made agreements with utility

companies to make payments through micro-financing and monitors individual usage. This is

because there are no service providers available to provide essential services. Due to a lack of

banking services, the BOP seeks its credits from local stores and local moneylenders. This tends

very expensive as they are charged high rates. Robbery and theft are rampant since most

payments are made in cash. The BOP doesn’t have access to public health care. The hospitals are

far, especially for the rural market. The participation of the private sector is low, around 14%

Mathur, Swami & Bhatnagar (2016).

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Conclusion

Grameen Danone Foods Ltd is an excellent example of a social business initiative. Group

Danone and Grameen bank joint venture illustrates the VFBOP model anew way of looking

business. It’s a continuous innovation to realize social objectives. Moreover, it is an increasing

partnership between private enterprise and social entrepreneurs. Unlike other companies, the

company focusses on social needs and utilizes the global potential to promote influence. The

sales increased from 150,000 cups in 2008 to 35.2 million cups in 2013. The number of

employees at the end of 2013 was 976, including 697 salespeople. Shokti Doi has opened a new

window in Bangladesh by fulfilling the requirements of children such as vitamin A, iodine, zinc,

and also a good flavor and taste. VFBOP model may work differently applied in different

cultures.

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References

Akter, S., Jamal, N., Ashraf, M. M., McCarthy, G., & Varsha, P. S. (2019). The Rise of the

Social Business in Emerging Economies: A New Paradigm of Development. Journal of

Social Entrepreneurship, 1-18. https://doi.org/10.1080/19420676.2019.1640772

Rangan, V. K., & Lee, K. L. (2012). Grameen Danone Foods Ltd.: A Social Business. A Social

Business (January 31, 2012). Harvard Business School Marketing Unit Case, (511-025).

https://www.hbs.edu/faculty/Pages/item.aspx?num=39376

Peerally, J. A., De Fuentes, C., & Figueiredo, P. N. (2019). Inclusive innovation and the role of

technological capability-building: The social business Grameen Danone Foods Limited in

Bangladesh. Long Range Planning, 52(6), 101843. https://store.hbr.org/product/grameen-

danone-foods-ltd-a-social-business/511025?sku=511025-PDF-ENG

Rangan, V. K., & Lee, K. L. (2012). Grameen Danone Foods Ltd.: A Social Business. A Social

Business (January 31, 2012). Harvard Business School Marketing Unit Case, (511-025).

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