Oreos: a quintessentially American snack that has captured hearts the world over. We all know what it looks and tastes like: round, black and white and very, very sweet. In China, however, Oreos can take up a cylinder shape, have a strawberry filling or not be a biscuit at all, but a wafer.
This has been a pivotal part of Kraft Food Inc’s, the company behind Oreos, global success (a cool $1.5 billion in global annual revenue), which has only been possible through tiresome trial-and-error, extensive market and cultural research and a localisation strategy that tapped into the sweet tooth of the target markets.
When Kraft initially launched the sandwich cookie in China in 1996, it failed to lure buyers for the best part of the following decade. Kraft realised that the cookie crumbles differently in a new market, and in 2005, it decided their beloved snack needed to be rebranded, practically from scratch, if it was to make an impact in the Chinese market.
The first issue that needed to be addressed was the taste. Lorna David, in charge of Kraft’s global biscuit division, was quoted of saying that Chinese consumers liked the contrast of sweet and bitter, but found Oreos to be too much of each. The original taste needed to be modified, making the biscuit more chocolaty, while reducing the cream’s sugar levels.
The second issue was price and packaging. Typical American buying habits can be quite different to Chinese buying habits, particularly when it comes to food and snacks. At the time of launch in China in 1996, Oreos sold in the US cost ¢72 for a packet of 14. For the value-conscious Chinese, this was too expensive, so part of Kraft’s localisation campaign meant that it had to introduce smaller packets at a cheaper price to match Chinese buying habits.
The changes worked brilliantly, and spurred Kraft to takes its localisation initiative one step further, redesigning the biscuit to four layers of crispy wafers, filled with vanilla and chocolate cream and coated in chocolate. It looks nothing like the original, but had the similar look and feel of many other snacks on the market, only with Oreos original taste.
Kraft clearly took a great gamble here. To western eyes, the revamp looks unrelated to the original, a loss of identity, but to Chinese consumers it represented the best of both: A wafer biscuit a la Oreo. This opened the door to further innovations in the preceding years, as Kraft began experimenting with flavours. Its green tea ice cream and Double-Fruit Oreos [see image below] incorporated zests that spoke to the local market.
Since then, Kraft has implemented similar localisation strategies for its Oreo brand in other countries, most notably in Argentina where it released both the Alfajor Oreo, which resembles a traditional local confection containing almonds and cinnamon, and the Dulce de Leche and Banana Oreo, taken after a nation’s favourite chocolaty sweet treat [see image below].
In 2011, Kraft launched the Oreo biscuit in India, using locally sourced ingredients, adjusting the recipe to India tastes, shrinking their size slightly from its American counterpart and selling at highly competitive prices, especially in rural areas.
However, perhaps one of the most significant decisions was to change the company name on the packet from Kraft to Cadbury, since Cadbury was already a recognized brand in India (Kraft acquired Cadbury in 2010 for £12 billion). Kraft’s scope and resources demonstrate how it really considered all possible avenues in its localisation strategy.
The Oreo case-study offers a perfect example of how localisation can stretch far beyond just having words translated. Simply translating the packaging did not give the Kraft the returns from the Chinese market it initially anticipated. Only once the company embraced local tastes and buying habits did it become China’s best-selling biscuit.
Other multinational consumer brands have also given themselves a radical makeover when opening up to foreign markets. Starbucks in China, for example, does not see coffee as its main product, since the proportion coffee drinkers there is significantly less than in the US or Europe.
While brands should not be afraid to redefine themselves for different markets, it is important to find the right balance of localisation. The question on every global branding officer’s lips is to how to maintain the brand’s identity while adapting to the cultural norms and sensitivities of the target audience.
This counts for the product as much as it does for the marketing campaign. In as much as people don’t all speak the same languages, certain marketing techniques and campaigns may work in one country but completely fall short in another.
That is why as brands expand, they also need to become more flexible. Expand too far, however, and the brand may snap.
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