The document outlines Kraft Foods' marketing management assignment, focusing on their strategy to introduce a fat-free Oreo to capture the health-conscious consumer market. Kraft, as the world's second-largest food company, aims to leverage its strong brand recognition and address competition by promoting healthier products amid rising ingredient costs. The marketing plan targets women aged 18-45 with promotions emphasizing health benefits and new packaging to increase sales and market share.

1. Master of Business Administration
Marketing Management
Assignment
Name: Heba M. Ali
Student No.: STU20199
Prof.: Dr. Ian McPhee
Word count: 3800
Due Date: 15 October 2012
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2. Table of Contents
Topic Page
Due Date: 15 October 2012........................................................................1
Financial Analysis................................................................................................................11
Break Even Analysis ............................................................................................................11
Sales Forecast.....................................................................................................................14
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3. Kraft Foods’ Marketing Plan
Executive Summary
Kraft is the 2nd largest producer of Consumer food products after Nestle, it
operates in around 70 countries across the world with around 98000
employees and sells its products in over 150 countries in Latin America, Asia
Pacific, Europe, Middle East and Africa through its subsidiaries, Kraft Foods
International Inc and Kraft Foods North America Inc (Kraft Foods, 2010).
Kraft manufactures and markets packaged retail food products like cookies,
confectionery, coffee, juices, powdered beverages, cheese products, ready-
to-cereals, desserts, meals and processed meats. All these products cover
major costumer sectors like Snacks, Beverages, Cheese, Grocery and
Convenient Meals under the major brands like Kraft, Jacob’s, Philadelphia,
Maxwell house, Nabisco, Oscar Mayer, Post, Oreo and LU (Kraft Foods
Brands, 2011).
The Kraft products are being sold via many distribution channels like
distributers, satellite warehouses, operated companies and public cold-
storage facilities, depots, and other.
Having realized that it was losing the market, Kraft carried out research which
enabled it to be able to serve people well it had to start producing healthy
foods. This is the only way it would ensure that it continued enjoying the
market it already has. Its focus has shifted to healthy eating styles and this
explains why it has introduced the new Fat Free OREO whose objective is to
solidify its grip on the market and portray it as a company that supports
healthy eating life styles .The fat free OREO is expected to become a leading
fat free snack in the market in the whole world. There are other products such
as OREO piecrust, OREO ice cones, and OREO Fat Free snacks that are
available for vending machines which Kraft is using to enhance its sales (Kraft
foods, 2011).
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4. Figure 1 (Carnegie Research Inc., 2009: p. 2-2)
(Note: All dollars in million)
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5. Situation Analysis:
a- PESTEL Analysis
1- Political
The Political environment is suitable for Kraft foods to introduce its new
product to the market. The UAE political status is stable and encourages even
new investments.
2- Economic
As mentioned the economic and political environment in UAE are in a good
condition for Kraft to launch its new product, the country became a centre in
the Gulf/ME area attracting investments and job seekers too.
3- Social
Kraft products are well known in UAE and its advertisement about Oreo
(Children oriented) is well known too. Not only Oreo but all of its brands some
are in the second place after Nestle and other are in the first place already.
4- Technological
Kraft implemented successfully innovative ideas and processes to create
values to its customers; it gives care to the customer needs before building its
strategy, the company has SAP Net weaver technology platform to make
ensure that information and business support transformation flow to every unit
(FBR, 2008).
5- Environmental
Kraft has committed to reduce the effect of its operations on environment; it
reduces the intake of water, carbon dioxide release and materials use in
packaging (KFSPFS, 2009).
6- Legal
Kraft has a long history maintaining corporate compliance along with all local
or international implication; the company obeys laws, rules and regulations in
order to sustain its business profitability and credibility (Kraft Foods, 2011).
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6. b- Internal Analysis
Kraft core competencies: Kraft has donated average of $770 million over
the past 25 years in both cash and food, implemented community programs
and supported charity like the mobile food pantry (Kraft foods, 2011).
- Kraft has a very market resistance and popular to its investors, the
company shows significant pricing expansion; the firm’s top-line advanced
11.5% led almost exclusively by organic expansion, which was 8.4% in the
quarter; Kraft’s adjusted operating income over 12%, productivity
enhancements, foreign currency; and earnings per share jumped from 23.4%,
to $0.58 in the quarter. Nestle, for example did 60.9 billion in sales but only
had 7.3% inorganic growth and 4.1% real internal growth (Yahoo! Finance,
2011).
c- SWOT ANALYSIS
Strengths
 World’s second largest food
company
 Strong brand
 Brand recognition & loyalty
 Distribution network
Weaknesses
 Sharp rise in the prices of
ingredients
 Increase the expenses of ads
 Geographic concentration
 Limitation in rising the price of
the product
Opportunities
 Expansion in developing
markets
 Repositioning
 Offer organic products
 Offer Fat free/Sugar free
Threats
 Purchase issue
 Competition
 Decrease the consumption
 Price issue
Strength
Kraft foods stand out as the largest branded foods and beverages in the
Middle East Asia and the entire UAE market. The products are found in
almost 99 Percent of all households in the UAE market. Kraft Food Inc. is one
single brand that nets approximately $1 billion every single year. By 2006, it
was ranked as one of the top cookies maker with sales exceeding
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7. $1,432,539,000. Kraft Food Inc. still remains one of the leaders in this market
commanding the nine topmost slots in as far as the best 20 cookies are
concerned. OREO is one of the products that Kraft food relies on to continue
commanding and controlling a big share of the market. It is one of the
products that make Kraft Food Inc. a house hold name in the UAE market
(Kraft Foods Fact sheet, 2011).
Kraft has several brands that it wants to grow, it does this by:
To strengthen its presence in the market, plans are underway to introduce
new fat free OREO cookies. This strategy is not only intended to
accommodate the whims of the customers who do not purchase products
from Kraft Food Inc., but it is intended to adapt to the ever changing eating
habits of the consumers. It also aims at develop products that are in line with
the current trends in the UAE market. The strategy is to develop a new Fat
Free ORERO product that contains 0 grams fat, 0 grams of sugar per every
serving. This product is targeting the UAE and other markets.
Weaknesses
Kraft Food Inc. sales have in the recent past declined a thing that has been
attributed to the sudden increase in the prices of the products in the 1980’s.
This sudden increase in prices made consumers cut down on their
expenditures on the products. The number of products purchased by every
consumer declined steadily. Similarly, the introduction of private labels heavily
ate in to the market that had for a long time been a preserve of Kraft Food Inc.
cookies.
The fact that the sudden increase in the prices of Kraft Food Inc. cookies was
exogenous for instance increases in the prices of ingredients made it difficult
for the prices to be lowered below the current prices because this would make
the firm make losses. This implies that the new Fat Free OREO was to be
sold at prices that were slightly above the original OREO which was $3.00 per
package. The price for the new OREO would thus be $3.15 per package.
The other factors that could be blamed for the decline in the overall sales is
that the products that Kraft Food Inc. had been producing did not initially
target a society that is health conscious. Kraft Food Inc. has since then
introduced fat reduced products to try and lure the consumers back. Currently
the consumers’ attention has shifted to no fat products. For instance OREO
has a fat content of 7 grams and 14 grams of sugar for every serving. This is
high especially if the same is compared with the competitors whose cookies
have only 4.5 grams of fats and 5 grams of sugar for every serving. This is
what prompted Kraft Food to introduce some new products that are fat free.
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8. One such product is the new Fat Free OREO which is expected to help Kraft
food Inc. is able to capture the lost market and raise the sales to the targeted
levels. Kraft has also focused on the fact that it needs to produce products
that are not only healthier but ones whose quality is assured.
Opportunities
There are a number of opportunities Kraft Food Inc. is bound to benefit from.
The fact that the firm is among the leaders in this industry makes it better
placed in terms of consumer loyalty and attracting new clients. The benefit of
scale and the fact that retailers are already aware of the products Kraft Food
Inc. deals in makes it well placed to command a big following in the market.
Kraft Food Inc. being rated 21 of the top 25 companies across the globe gives
it an upper hand on the international market it has its products sold in various
markets including the most advanced Economies of USA, European Union
and UAE market. The new packaging for the Fat Free OREO has a label
‘‘Weight Watchers for points for servings’’ is expected to draw more attention
and generate great interest and it is expected that it will increase the level of
confidence (Steven Goer, 2008).
Threats
As an international company, Kraft Food Inc. faces competition from several
other firms that Manufactures cookie brands such as Nestle or national
companies. The firm commands a larger market with an annual sale of
$554318700. Its market is part of the market that Kraft Food Inc. wants to cut
in to while at the same time retaining its existing customers. The other
competition that Kraft Food Inc. is expected to wade off is AngelLite that
specializes in the manufacturing of fat free sandwich cookies. AngelLite has
about 140 products which are fat free, and whose sales are on the rise. This
is expected to continue giving Kraft Food Inc. competition. There are also
new companies in the market whose continued product appeal and the firms
growing fame is a major threat which Kraft Food Inc. has to urgently address
(FBR, 2008).
Marketing Objectives
The original OREO targets majorly children. The cookies focused on attracting
children with new colours such as cream which was aimed at ensuring that
there is a new interest generated among children who are better placed to
convince their parents to buy the new cookies. The Fat Free OREO on the
other hand targets women between the age of 18 -45 who in most cases are
health conscious but still have unquenchable desire for sweets. These groups
of people are mostly city residents who fall in the middle and upper income
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9. classes. The focus is on the group of people who enjoy recreational activities
because this is the time they get to consume Fat Free ORERO products.
Among the groups that are targeted by Kraft foods are those who engage in
swimming, jogging, power walking etc.
This group is targeted because of their wish to lead a health life but have
unending crave for sweets. To turn them from such products as sweet, our
target market will substitute such high calorie products with Fat Free OREO
cookies. They will not only buy our product for themselves but will also carry
home a few packets for their loved ones. Children who have become
vulnerable to obesity are considered by Kraft as secondary targets. The
primary target is therefore provided with an opportunity of engaging in what
they like most without running risks of developing health related
complications. To be precise the targeted market will consume approximately
three cookies per day which will quench their craving for that day.
Kraft Food Inc. is determined to maintain a reputation of manufacturing tasty
cookies though it faces a problem where its products are known to be
fattening and hence it becomes difficult to distance itself from the image
created in the customers. To be able to mitigate the losses that may result
from this, Kraft shall engage in promotional activities so that the targeted
audience may feel its presence and notice its products. This is what will
ensure that they choose products from Kraft and not those from competitors.
Mission Statement
We are committed at ensuring that our customers are aware of the fact that
we have the snack food they have been looking for. We also want them to
know we are in business to provide for their wants and needs while we work
hard to ensure that the products we manufacture are health conscious and in
line with their lifestyle.
Objectives
The OREO product has been very successful and Kraft Food Inc. is
determined to venture in other areas that have recently attracted a number of
customers. The focus is to improve on the quality of the products and reduce
marketing that target children. We focus on increasing the public awareness
of the disadvantages derived from excessive fat in intake to actual providing
them with products that are fat free such as Fat Free OREO.
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10. Marketing Plan
Kraft Foods Inc. in UAE: MEA Regional Office, Employees: 130
Figure 2 (Carnegie Research Inc., 2009: p. 2-16)
Projected Goals
• Accessing new markets that consist of customers who watch what they eat
with an intention of losing their body weight by reducing their fat intake.
• Introducing in the market Fat Free OREO
• Marketing OREO snacks as one of the top Fat Free product in the market.
• Diversify in to other Fat Free products such as OREO pie crust, OREO ice
cream, and repackages of Fat Free OREO for vending machines.
Financial Objectives
• Targeting to sell 5 million bags of Fat Free OREO products
• To increase the market by aggressively marketing OREO product to
women who are between 18-45
• Focus at increasing OREO sales.
Marketing Objectives
• Focus on people who are on strict diet such as weight watchers and south
beach. (See appendix C)
• Promote Fat Free OREO packaging by making use of new and attractive
colors.
• Promote a healthier product to consumers who are health conscious.
Marketing Strategy/Tactics
One of the strategies to be used by Kraft is to target and reach out to health
conscious women aged between 18 -45. In this case the strategy would be to
focus on encouraging those who are already purchasing and using the
products to increase the frequency at which they buy our product. The media
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11. targeted for advertisement includes magazines and the TV because of the
wide range of people it is able to reach. (See Appendix C)
Financial Analysis
It is estimated that Kraft Inc. spends about $10million to researching and
developing a formula for the Fat Free OREO. This effectively increased the
cost of production by $0.75 per package if this is added to the package cost of
0.15cents; each Fat Free OREO must then be sold for 15cents per package.
The marketing costs will be taken from Kraft Foods marketing budget which
means the marketing cost is not factored in to the cost of production.
Break Even Analysis
Kraft foods expects to continue operating on the same profit margin , the
price of one Fat Free OREO is $ 3.15 which is double the cost of producing
the same and stands at $1.57. If we divide this figure with $10 million, it
shows that 6.4 million packages are required to break even (Kraft Foods,
2011).
Marketing Mix
Consumer Promotions
Promotions on all Kraft Food products to be run in most of the retail outlets
while at the same time soliciting for the feedback from the consumers.
Coupons are targeted and should to be used to promote the products by
placing them on the website for people to download free of charge. When
carrying out the survey, the interviewee who provide a feedback and fill the
questionnaire to be provided with the coupons. Other seasonal promotional
activities to be organized to coincide with the media schedule with contests
being organized so that they win membership to various fitness institutions in
this region. . Other promotional activities to be organized during the months of
December where presents to be given to those who participate and win in the
promotions.
Positioning
For Kraft to be able to maintain its 21 position out of the best 25 in the world,
focus will be to create fat free products to compliment the products it is
already producing. Kraft uses the same reasoning to expand and target a
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12. wider market by reaching to the new target audience. To educate the masses
on the importance of the new Fat Free OREO this helps women to abide to
the low fat dieters without necessarily having to starve themselves.
Packaging
The packaging to be meticulously modified for the purpose of packaging the
Fat Free OREO which is featured in red and blue colours. Red is associated
with health life style while blue is maintained to honour the original OREO
which is blue in colour. Furthermore, the red colour is to be used to
differentiate between the fat Free OREO and the original OREO. The zip
locks seal to be used on the package to maintain freshness for a very long
period of time.
Communication Strategy
To inform the public that it is possible for it to watch what they consume and
satisfy their cravings without necessarily depriving themselves the delicacies
they crave for. The new product and the message are to be marketed in print,
electronic, and outdoor advertisements.
Press Release
To send out press releases that explains the new products and when the
actual distribution will be commenced. Press releases tend to be dispatched
through the media, retailers, editors of food and science and magazines
editors.
Public Relations
A few foundations to be chosen in the UAE market, sponsored so as to
popularize Fat Free OREO. The focus would be to contribute a certain
percentage of all the money collected from the sales that we make. The
foundations to be targeted are those that directly deal and help women.
Print Media
Magazines and newspapers should be used to disseminate information to
particular demographics of the targeted audience. The fact that the
magazines have a longer shelf life means that it should be used as it w
always remind the readers of our products and the benefits that can be
derived from them.
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13. Electronic Media
Kraft food tends to specifically focus on the use TVs and websites for
marketing purposes. This methods are a little bit expensive but they have the
ability to reach the targeted market hence they are very effective. Our website
is to be tailored so that it features information on our products with special
emphasis on the Fat Free OREO.
Magazines
Running advertisement in almost all magazines and prints in the UAE, the
magazines to feature the advertisement should be those that can be able to
reach diverse group of women and should appeal to the targeted market.
Among those that will feature most of the advertisements includes health
magazines that focuses on good eating habits. And any other magazine
considered commanding a wide group of readers.
Television
The TV station chosen should be able to reach as many people as possible
and should have the ability to connect to a wide range of women being
targeted. TV stations such as Aljazeera, BBC and many other that have a
wider coverage in the UAE would be targeted (See appendix B). The TV net
work chosen must be popular and should be able to run the advertisement
during morning and evening news and during any other prime time. The
advertisements should also be run during times when health related programs
are being run. They should also be featured when women tailored programs
are being aired.
Outdoor Advertisement
Billboards erected to be erected along high traffic roads and highways and be
effectively used so that the advertisement reaches a large audience. This is
how motorists and their passengers will be able to know more about our
products and increase the possibility of having the products bought.
Media schedule
Though the advertisement program is scheduled to run throughout the year,
there are specific months which are important since they have more than one
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14. activity taking place. The months in which advertisement activities will be
enhanced includes January, February, April, may, September, October and
December (See Appendix C). The months of January and February are
important since this is the time people make New Year resolutions. This is the
appropriate time to promote Fat Free OREO since most people are expected
to resolute to reduce fat and sugars in their diets. Product such as OREO will
be available to such clients. The months of April and May are crucial months
since this is the time people begin to watch their diets and their weights. This
is the swimsuit season as people prepare for summer. September and
October are significant because this is the Halloween time. Promoting our
products at this period with a few offers could help them a great deal. In
conclusion, the month of December is a holiday month that comes with a
number of festivities. Watching your diet is a must since it helps in cutting
down weight. This is the time one has to eat Fat Free OREO so that he does
not add on unnecessary weight during this festive season.
Performance Evaluation
The public opinion is very important consequently, for evaluation purposes, a
survey needs to be carried out to monitor the public opinion and the feedback
that helps to determine the strength and the weaknesses of our product. The
public should also be able to state the modifications that they think are
necessary to make the product serve them better. The survey questions
should be posted on Kraft website and inside the packages of our products.
For every completed survey, a reward of $1 should be given in terms of
reduced price for the extra OREO purchased.
Sales Forecast
Kraft foods estimate that the sales for the first year will be around 5 million
packages. Most of these products are expected to be sold in the second half
of the year. The second half of the year will realize greater sales because it
will take some time before the consumers learn about this new product. In the
second year it is projected that the sales will hit the 7million packages
because most of the store will be stocking this product and more customers
will be aware of the existence of the product following aggressive marketing
campaigns. By the end of the first quarter of the second year, the Fat Free
OREO will have sold enough packets to earn profits (Kraft Foods, 2011).
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15. MARKETING BUDGET
Appendix A
ADVERTISEMENT& MARKETING AMOUNT IN US $
MAGAZINE 10,000,000
TELEVISION 100,000,000
PROMOTIONAL ACTIVITIES 1,000,250
SALES INCENTIVES 5,000,000
PUBLIC RELATIONS 1000,000,000
CONTIGENCIES 2,000,000
TOTAL 1,118,000,250
Note. The above budget caters for the companies expenses on 12 products
namely OREO, Cadbury, Trident, milka, Tang, Kraft Food Inc. kraft,
Jacobs,LU, Philadephia, Oscar mayer, and Maxwell house ( Trefis 2011).
When we divide 1,118,000,250 by 12, it is estimated that OREO alone
contributes$ 93,166,687.5 towards the expenses.
Appendix B
Promotional activities for Fat Free OREO in the UAE market
Number of people
targeted
Number of people
converted in to customers
Newspapers /magazine 100 millions 2million
Television advertisement 200 millions 1 million
Billboards 500,000 10,000
Sales incentives 300,000 100,000
Other Promotional
activities
1 million 100,000
Appendix C
Month Amount spend on
advertisement
Product targeted
Jan, Feb $500,000 Fat Free OREO
April &May $ 200,000 Fat Free OREO
September &October $300,000 Fat Free OREO
December $200,000 Fat Free OREO
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16. RECOMMENDATIONS
In my opinion, Kraft is one of the most respected companies in snacks whose
portfolio is unrivalled because they produce brands that people love. To
maintain this position, it is important that;
• They produce snacks that are healthier but delicious and capable of satisfying
customers’ desire.
• Hold on its iconic heritage brands and increase resources for marketing in
their respective market specifically to market its Tang powdered product in
Asia more aggressively
• Deliver the best services so as to win the customers and consumers,
colleagues, suppliers and communities.
• To maintain acceptable quality so as to gain new consumers and maintain the
loyalty of those that already exist. Nutritional value of its products must be
maintained, with appropriate package integrity maintain because it is key to
customers at point of sale.
Maintain a strong upstream collaboration with the suppliers
RERERENCES
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17. 1- Carnegie Research Inc., 2009. Legal and Regulatory Issues, Retrieved on
3rd
October, 2012 from
http://www.angelfire.com/jazz2/vernonhead/carnegie/kraft.pdf
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on 30th
September, 2012 from
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009.04FINAL.pdf
3- Kraft Foods is Creating a More Delicious World2011.CSRwire Website,
retrieved on 4th
Oct, 2012 from http://www.csrwire.com/press_releases/32274-
Kraft-Foods-is-Creating-a-More-Delicious-World
4- Food Business Review (FBR), 2008.Kraft foods deploys SAP Net weaver
technology. Retrieved on 1st October, 2012 from http://www.food-business-
review.com/news/kraft_foods_deploys_sap_netweaver_technology_platform
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October, 2012
from http://phx.corporate-ir.net/phoenix.zhtml?c=129070&p=irol-
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from http://www.mondelezinternational.com/Investor/corporate-
governance/politicalcontributions.aspx
7- Kraft Foods Brands, 2011.Retrieved on 25th
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Associated press, and Retrieved on 1st
October, 2011 from
http//www.usatoday.com/money/markets/2008-09-18-dow-adds_N
9- Form 10-Q for KRAFT FOODS INC, Yahoo! Finance 2011 report retrieved
on 10 October, 2012 from http://biz.yahoo.com/e/111104/kft10-q.html
10- Steven Goer, 27th
October, 2008. Fostering Innovation at Kraft Foods,
retrieved on 1st
October, 2012 from
http://www.ideaconnection.com/interviews/00058-fostering-innovation-at-kraft-
foods.html
11- Kraft Foods, 2011. Kraft Foods Fact sheet 2011 retrieved on 5th
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2012 from
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18. http://www.kraftfoodscompany.com/SiteCollectionDocuments/pdf/kraft_foods_
fact_sheet.pdf
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