Sunday, 14 October 2012

Cadbury And Oreo: The Benefits Of Combining Strengths

Sometimes, when long-established brands are failing to command the sales, a wise marketing strategy is to use the time-honoured philosophy of ‘strength in numbers’. Mondelez International, the snacks company spun out of Kraft Foods which owns the much-loved British brand Cadbury, is one of the latest examples of this method in action. It has created a new chocolate bar combining Cadbury Dairy Milk and the US brand Oreo.

The new bar, called ‘Dairy Milk with Oreo’, is now available and yours for just £1.42 per 120g. It consists of a milk chocolate bar containing a creamy filling with Oreo cookie pieces – thus combining the elements for which each brand is most famous. It is expected that there will be a significant marketing investment in this new product over the coming months.

This kind of combination approach works because the holding company is already one step ahead in terms of marketing. In this case, the holding company Kraft does not have to establish an entirely new concept but is instead trading on the existing popularity and renowned quality of Cadbury and Oreo. But the combination is a clever twist as it allows consumers to look at each of these brands in a new way. In one stroke, the manufacturer has managed to rejuvenate the images of both brands and get a new product launch off to a flying start.

Kraft has already seen some success with this strategy, when in March this year it launched a new product to rival the global giant Nutella – a combination of its Philadelphia cream cheese spread and Cadbury’s chocolate. It has even customised this product to suit individual market tastes. In Germany, for example, the cream cheese is mixed with the highly popular Milka chocolate brand.

It could be said that confectionery producers in general need to find new ways to generate interest in their brands right now. Annual sales of chocolate bars fell by over six per cent over the past year. This may perhaps be down to increased awareness of the need for healthy eating, or perhaps to growing costs of ingredients such as sugar, corn and cocoa.

Added to this, it is well known that the Kraft takeover of Cadbury was not without its controversy and this caused the food giant to post a fourth quarter drop in profits of 24% in 2011. Clearly something fresh was needed, and this fusion with Oreo may well give the brand the boost it needs.

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