DANONE IN ASIA (Korea)

- ACTIVIA -

Miranda BULDUKYAN
Charlotte VERNAY
Jessie SOYEUX
Thomas VIDAL
Thierry WU
Léa ROUX EMLV – S6

TABLE OF CONTENTS

TABLE OF CONTENTS .......................................................................2

INTRODUCTION................................................................................3

I. SITUATION ANALYSIS.....................................................................4

1. The external environnement ..............................................................................4

2. The customer environnement.............................................................................8

II. PORTER...........................................................................................................10

III. SWOT ANALYSIS..............................................................................................12

IV. MARKETING STRATEGY...............................................................15

1. The dairy Market Structure in Korea ................................................................15

2. Primary and Secondary target market ..............................................................16

3. Product strategy .............................................................................................17

4. Pricing strategy ..............................................................................................19

5. Distribution.....................................................................................................21

6. Integrated marketing communication and promotion strategy...........................22

CONCLUSION.................................................................................24

APPENDICES..................................................................................25

REFERENCES..................................................................................29

2
 INTRODUCTION

Our study is related to the dairy product ACTIVIA, pertaining to the DANONE group
established in Asia. For many years Asia has been considered a very promising market. Its
economical developments are deemed to continue in the future and maybe at a more rapid
pace.

So, we have decided to concentrate our attention on the launching of the Activia brand on
the South Korean market. Danone group, number one in the world for yogurts, hopes to
get a prominent place in such a market. Studies have shown that the consumption of this
kind of products is recent and little developed in Asia compared with other continents.
As a first step, a few years ago, Danone has obtained a big success in launching
Activia/bio in China and Japan.

Thanks to this breakthrough Activia has become the first brand in yogurts and also the first
brand among the Danone products. Encouraged by this success, Danone has put on the
South Korean market, the third richest country after Japan and China, last September 3,
four types of yogurt: two traditional and two drinkable. Danone is known all over the world
for the quality of their advertisement. For yogurt in particular the stress has been put on
well-being and health brought to consumers. These qualities have been hammered in
South Korea. To conquer this market, Danone makes huge efforts to adapt this product to
the local taste and need.

To that effect, Danone has hired Korean teams to be employed in research and
development. A special team is also working on standards and regulations. To make sure
the final product will fit in the market and will be accept by a large portion of the population,
Danone multiplies trials and tests with potential consumers. The well-being mentioned
above that is a major point underlined by the Danone’s advertisement perfectly meets the
Korean concern. This population is keen on this aspect of life. As a result, consumers are
ready to pay a higher price to get this quality. And naturally Danone, with its Activia brand
is trying to take advantage of it.

3
 I. SITUATION ANALYSIS

1. The external environnement

• External environment

In this part, we are going to show the external environment of South Korea. Indeed,
Danone before to enter in the market in South Korea, has to know and analyze the
external effect. It can exert considerable direct and indirect pressures on both domestic
and international activities.
Through the external environment, we reveal why it is important for Danone to invest and
launch their yogurt in South Korea.

• Economic and growth

South Korea belongs to Four Asian tigers refers to the highly developed economies.
Before the 60’s South Korea was very poor countries the gross domestic product was
$260 per capita. But between 1960 and 1990 South Korea has maintained high external
growth rates and rapid industrialization. South Korea followed the model of Japan to
improve their economies and develop the country, and currently the gross domestic
product is around $19 000 per capita, it is similar to Europe countries such as Greece.

Nowadays, it still one of world’s fastest economies and South Korea is the 11 th world
power. To reach this development, South Korea based on powerful industry with adds
value such as high technology, technology of communication to ensure external growth.
About the exportations, China, United States and European Union are the best customer.
South Korea is specialized in 4 mains sectors, electronic, car industry, shipbuilding and
implement. These 4 mains industry represents 60% of all the exportations and continues
to increase, 4 companies dominate the exportations in South Korea LG, Samsung, SK,
Hyundai.

4
About the importations, South Korea does not have energy resources and needs to import
raw material in order to transform. China provides 20% of the importations.
In South Korea, France has 1.1% of the market share for the exportations. The graphic
represents the exportation comes from in South Korea and the food industry represents a
little part of market share of the exportation in South Korea, the food industry has already
established their companies in Korea.1

• Political trends / Legal and regulatory issues

As we have seen, foreign market exchange is a very important to Korea to ensure their
development. To make easier the relation between South Korea and the rest of the world,
South Korea has established some agreement with others countries in order to export and
imports goods. It belongs to world trade organizations, United Nations and between the
Asia countries it belongs to Asia-Pacific Economic Cooperation cooperate on regional
trade and investment liberalization and facilitation. APEC's objective is to enhance
economic growth and prosperity in the region and to strengthen the Asia-Pacific
community and Association of South East Asian Nations in which the members have free
trade area to import and export.

Korea signs the free trade agreement with United States, Chili. We can say that South
Korea opens the frontier for foreign investment. South Korea understands that the foreign
investment can develop the countries, currently South Korea needs the foreign investment
and make a deal with the rest of the world.

• Competitions

About competition, we can say that in Korea, the two competitors Danone and Yoplait are
already launched their yogurt. Since 1983, Yoplait use domestic company Binggrae to
launch their product, Yoplait can attract the customers using Korean company. The
domestic competitors, which share 80% of market share, are Yakuit Korea, Namyang
Dairy Products, Maeil Dairy Industry and Binggrae (Yoplait).
Competition in the yogurt industry could soon heat up. French food maker Danone
launched four yogurt products under its Activia brand. It is hoping to grab a share of the
local dairy market, which has long been dominated by local brands.
1
Appendix 1

5
Even if Danone is the last competitor to enter in the market, Danone anticipates the
changes in the environmental conditions and establish a strategy to attract customer and
compete with the competitors. We suppose the brand; the product can change the
behavior of the customer because South Korea is changing because the consumers
accept the product come from other countries.

• Technological advancement

Company such as Danone needs important structure to extend the company and launch
product. Indeed, for a company, which works in food industry, it is important to have
different structure to import the product in country. South Korea has many harbors to
import and export the product. The most important for Danone is the logistic because
Danone needs to respond the demand of the consumers and provides the channel of
distribution so the way of delivery and the delay are the most important for Danone. In
addition, Korea is a leader on information technology, for Danone it permits that the group
receives quickly the information and avoids some problem with the distribution. Danone
has opened a factory near the sea to ensure the production and the distribution through
the country. Danone Korea opened a research and development facility at Korea
University, to develop products suited to the Korean palate.

• Socio-cultural trends

In South Korea history, the country has known social dislocation with Japanese
colonization. The nation was divided into North and South Korea. A war between the two
Koreas ended in an uneasy cease-fire. After the war and a period of military rule, the
South Korean economy grew significantly and the country was transformed into a major
economy and a full democracy.
The influence of Korea culture comes from outside with Confucius and Chinese Buddhism,
it used Chinese writing before to change. We can declare that Korean behaviour; some
attitudes are very similar to Chinese culture with the same habits.
Currently, South Korea has a population of over 50 millions, making it the third most
densely populated country in the world. Most of people live in Gyeonggi province, which
include Seoul and Incheon. But South Korea has some problem with demography. Indeed,

6
the fecundity is very low and in the future, the elderly class will be more numerous than the
young class and the life expectancy reach’s 78 years old (60 years old in 1960).2

Nowadays, the most of consumer is between 25 and 35 years old. They have a good job
and the power of purchase is important and the comfort is a priority. They are interested by
the new technologies and pay attention to online video games and the new cellphone.
They are also sensitive to foreign product and international brand, they consume foreign
product because it’s a sign of quality. Korean consumers are influenced by friends,
colleagues, families and the purchases are often a sign of acknowledgment and hierarchy.
So, the purchases are motivated by the brand, the image, the quality and the price. That’s
why the consumer goods is a success in South Korea.
With the modification of the country and their development, Danone is ready to launch the
product because the society accepts to consume the product. In addition, the consumers
are satisfied to find international product with quality in the supermarket.

2
Appendix 2 and 3

7
 2. The customer environnement

The Korean consumers succumbed of the “well-being” and they wanted beneficial
products for health like fresh and dairy products. Thanks to the increase in the standard of
living, the behavior of consumption of the Korean population was occidentalized, which
implies important changes of behavior in the agro-alimentary area. The rice consumption
passed from 128 kg per year and per person in 1985 to 82 kg in 2004, on the other hand
the transform products as the dairy products have strongly increased.

While launching Activia in Korea, Danone try to adapt itself to the needs and the desires of
the Korean consumer. Danone recruited a team of Korean of research and development in
order to adapt Activia to the local tastes with a single formula. At the beginning of the
launching, 4 references were proposed with various tastes, then others tastes should
appear with an aim of enlarging the market.

Activia reminds to the consumers the values such as: life, natural, fresh and nature. Activia
is set up like a « health » product. The Korean consumer is very demanding and is ready
to pay the full price for products, which improve its health. Activia, which is fermented milk,
contains some Bifidus Actif ESSENSIS, which in fact is its specificity, Korean are very
sensitive to the fermentation, which is in the middle of their management. They have more
than 2.000 years of experience in the area of the vegetable fermentality.

• Profile of a Korean Consumer

In 2005:
• Number of household: 15,9 millions
• Average of Monthly Income per household: $2900
• Expenses of monthly consumption per household: $2400
• Expenses of household consumption: $410 Mds (more than 50% of GDP)

It’s an important market where expenses of consumption increase regularly.

8
 • Loyalty and the relationship

Concerning the loyalty and the relationship with customers, in this new market, Danone
can introduce a system of gifts, the consumer is rewarded. For that, he has to accumulate
points, which are in the packaging with a code, after the customer goes in Activia’s website
and subscribes. He can win gifts like coffee pot, basket picnic, box of vine… This system
can cheer them to collect points and so, buy more Yogurts Activia.

9
 II. PORTER

from 0 = low to 5 = strong

1- Threat of substitute products: 4

In the market for dairy products, substitute products are relatively large (chocolate
desserts, vanilla, fruit, cereals, ice creams...). On the other hand, none contains the pro-
biotic bacteria. The South Korean population is not used to purchase this type of products
(healthy products) and it is clear that Danone must convince its customers to change their
habits.

2- Bargaining power of suppliers: 4

Key leaders in the field of dairy products are limited, suppliers are unlikely to impose their
requirements on prices and conditions.

3- Rivalry among existing competitors: 3,5

10
The South Korean market already has domestic competitor, which produce yoghurt and
other product such as ice cream, milk and the customer may prefer buy the same brand.
The entry of a new product benefiting from a priori advantage in the major field of health
would be difficult and that is why Danone has chosen to partner with a major Korean
supplier: LG, which will help to penetrate the market.

4- Threat of new entrants: 1

The consumption of yoghurt is more recent and less developed in Asia than in other
regions of the world. Nestle and Unilever don’t have a very high penetration rate in Asia,
especially in South Korea.

5- Bargaining power of buyers: 1

Since there are four competitors in the market for dairy products, the bargaining power of
wholesalers (buyers) is relatively limited. That is why the market leaders can afford to put
pressure on buyers.

11
 III. SWOT ANALYSIS

Activia by Danone implanted in Korea

Strengths

• Activia yogurts are the most sold in the world and the first Danone brand in turnover.
• For the production of Activia yogurt, the most automated factories of the group are
now in Korea with innovative recovery and treatment of water and energy systems.
Here, Danone shows the example with ecological and socially responsible factories.
• More over, Danone’s manager, Olivier Faujour is supported by the Korean
government: as the country has enormous structural surplus of milk, the
introduction of Danone would help them to sell everything.
• Korea has also let Danone investing a whole Floor of “Korea Univesity", the second
University of Seoul, for its Department of Research and Development.
• Danone has signed a distribution agreement with LG Group whose Household &
Health Division is the most important FMCG Company in Korea.
• Activia/bio had been very successful in China and Japan so it's a point of
comparison for Korea.
• One of the arguments, which had persuaded Danone to open its Korean subsidiary
is in two words: well-being. The Korean consumer is demanding and willing to pay a
high price to tangible solutions that improve their health.
In Korea, "Life gives life": the fermentation is at the heart of gastronomy.

12
 Weaknesses

• The Korean market for fresh dairy products is one of the most competitive in term of
product and competitors.
• Price for dairy products are expensive in Korea.
• Few consumption of yogurt in Korea.

Opportunities

• Very successful in China and Japan, the brand continues to expand their product in
Korea and attract a new customer in Asia.
• Koreans consume only 8 pounds of yogurt per year against 33 for French so the
idea is to expand the market by increasing consumption.
• Danone's strategy is to grow the market rather than taking market share to Korean
actors existents. For that Danone intends to launch new products 'premium' offering
health benefits credible and innovative. Danone had already implemented this
strategy in other countries such as Argentina where the yogurt consumption per
capita increased from 7Kg in 2002 to 13kg in 2005.
• For after, the group is working on new flavors as kimchi yogurt, the national food in
Korea, and expects to import of France more that its flagship product "Activia".
• Overall, Danone plans to invest 50 million euros in Seoul in the 5 next years.
• Korea has more than 2000 years of experience in the vegetal fermentation so that,
Danone, as an expert in the animal fermentation is thinking about mix both
experience.

Threats

• Consumption of dairy products is more recent and less developed in Asia than in
other regions of the world because of high specificity of Korean gastronomy
concerning tastes.
Danone is an expert in animal fermentation whereas local companies are experts in
vegetal fermentation so it can be a problem if Danone does not find the way to get
the Koreans used to it.

13
 Looking more closely at the SWOT analysis, we have many internal strenghts and
many external opportunities, firms in this enviable position can take an aggressive stance
toward their marketing strategy. Expansion and growth, with new products and new
markets are the key to an aggressive approach. Danone is totally in this strategy, they
appeared in Korea in 2008 and launched their best product Activia. The aim is clearly to
target a new consumers in Asia.

To reach the aim, Danone immediately thought of mixing these two competencies. At first,
in order to bring its products and its experience in this part of the globe as the leader looks
forward to convert the Danone brand with an investment in the next 5 years more 5 million
euro, and partly because Danone knows how health and well being is important to
Koreans which the food giant wants to seduce by integrate their culture. The project of a
kimchi yogurt, the staple food of Korea, is also underway.

Danone has not implemented for anything in Korea: since the dazzling success of Activia /
bio in China and Japan, given that Korea has a structural surplus of milk and knowing the
importance that health is for Koreans for whom "life brings life, Danone has advantage
with their own competency in terms of health with the product Activia yogurt which is most
sold in the world with an active bifidus promote digestive comfort.

14
 IV. Marketing Strategy

1. The dairy Market Structure in Korea

• Size

According to the Korea Dairy Committee, Korea consumed 2,980,047mt of milk in 2008,
down 2.4% from 2007. Korea’s per capita consumption of dairy products was 63Kgs in
2007 and it is estimated to be around 61Kgs in 2008. Korean milk consumption has been
stagnant with Korea having the lowest level of birth rate in the World (1.20) and slow
growth in drinking milk consumption.

• Growth Rate

In 2008, local consumption of major products declined mainly due to the stagnant
consumption. As we can see on the board, consumption of yogurt is decreasing roughly.
That is why it is very awkward to enter such a market. The best companies have to be very
competitive and very different from the other ones.3

• Importation

Korea imported US $672 million worth of dairy products in 2007, recording a 15.4% of
increase over the previous year. This increase was led by strong growth in imports of
cheese, butter-based products and yogurts such as Yoplait or Danone for instance.4

3
Appendix 4
4
Appendix 5

15
2. Primary and Secondary target market

Activia is a new product on the Korean dairy market. The augmented product is based on
active probiotic culture, having a positive effect on the metabolism. It also helps to protect
the digestive system and intestinal transfer.

According to these benefits, the primary target market is the woman market. Women from
25-50 years old, being from high social classes and that look after their health and their
body. Moreover they tend to obey to a specific diet, which helps them to keep this healthy
life.

Activia is a very good tool within. The basic characteristics of this primary market are first
being from high social classes. Indeed, in Korea, Activia has just been launched and its
communication has a specific goal. At First, attracting people who get the best purchasing
power, it is the most important step. Then, they are probably young, they are willing to take
care of themselves and be aware of benefits of Activia.

Regarding food industry, their basic needs are first keeping them into a good fit. That is to
say, they are not in fond of purchasing food that is not healthy enough nor that will not help
them to keep their body in a good shape. However, their basic needs are to buy something
that has the best value regarding the quality and the price.

The secondary target market of Activia could be any lambda old person who is interested
in taking care of its health. They could have usually intestinal problems so that Activia
could help them to regulate their slow intestinal transit. The secondary market is a bit
difficult to hold and to understand because Danone has come into the Korean market very
lately compared with the other international markets. Activia is a product that helps
everyone with intestinal problems. The core product is a yogurt that is loaded with live
organisms, called Bifidobacterium animalis in the microbiology world that were renamed
and trademarked Bifidus regularis by Danone. Probiotics are known as "beneficial
bacteria," which, if carried in the intestinal tract in significant amounts, are thought to ease
some digestive concerns. That is why, Activia has been attracted by old people that want

16
to eat a yogurt with a good taste and at the same time that helps them to regulate their
intestinal transit.

The communication process has to be doubled, the fame of such a product is still under
construction. Moreover, prices are higher than the other yogurts, that is why they should
be from a high social class. It is thus more important in Korea because there are plenty
yogurt ranges remaining that are cheaper than Activia.

3. Product strategy

• Brand name

Activia is known and appreciated within the world. Even though a lot of customer in the
western civilization still call it « Bio », that is its old name that has been changed into
Activia because of European legislation.

Activia is recognized everywhere thanks to the original name and its slogan: « active
inside and you can see it outside ». This advertising slogan is kind of popular everywhere
and it has made this yogurt so known. As its brand name « Activia », this yogurt is active
inside and that works outside. Bio-Activia is present in the fast moving consumer goods
market where brand name changes are both numerous and problematic since the
customer must find the product himself on the shelves it has a high brand equity as it is
leader and well-known in his market.

Finally, the positioning and visual identity of Bio and Activia are identical which reveals two
different problematic issues. The brand name is very important for such a product,
customers are able to recognize the yogurt wherever they are in any store they will be.
Activia is a very good name; it is used within the entire world without any change unless
changes at the alphabet level.

Activia is a range of yogurt launched by Danone. Danone is a very big French food-
products multinational. Leader in the fresh dairy market: Water, Yogurt and so on.
Danone's aim is to bring the health issue to the greatest consumers worldwide.
Its strategy has been well-made to the Asian market. Indeed the consumption of yogurt is

17
more recent and less developed in Asia than in other regions. With a success in China and
Japan with the Activia brand/Bio Activia is the first brand of Danone in turnover but also the
best selling yogurt in the world, Danone has begun its implantation on the Korean market
according to this strategy by offering dairy product more adapted to this type of
consumers, yogurts with vegetables for instance.

• Packaging

Since 2006, the Activia packaging has changed in order that the product became known in
the entire world. Activia gathers more than 15 products: with fruits, with cereals, lights and
so on.

The basic packaging is the same anywhere from Paris to Seoul. The packaging is very
simple, made in plastic jar. The originality is the color. Indeed, the most important aspect of
the packaging is the green color that overwhelmed the packet. Usually, the green color is
used for pharmaceutical issues rather than for food-products.

The green color attracts consumers to purchase it. In Korea, it is something very unusual;
Yogurts have a simple package with a simple color. The packaging could help Activia to be
implanted in such a Market, that is why it is important to deal with an original but attractive
packaging.

It is a very good option and one of Danone's originality. We also can see that with another
Danone yogurt, which is Essensis, the package is all in pink.

• Differentiation

18
As Activia has just been implanted into the Korean Market, it seems difficult to judge its
position strategy but we can say that Danone and especially Activia has an international
impact.

The differentiation with other yogurt is based on the bactery that is in the yogurt. Activia is
a great-tasting yogurt that contains Bifidus regularis which is a natural probiotic culture that
can regulate the digestive system. This bactery is only available in Activia. That is why
Activia is so well-known and so appreciated by women especially.

The position strategy on the Korean Market is well enough for a beginning. The Korean
market for fresh dairy products is one of the most competitive in the world. Prices are also
among the highest in the world. The consumption of Yogurt is one of the lowest into the
world. That is why it is very important to be « the one» within this market. To be well-
known in such a market, as said above, the best thing is to build a partnership with one
local company. Danone should consider a distributorship/agency to ensure effective
distribution in the market. A local presence would help exporters keep in touch with any
changes in the regulatory environment and market trends.
That's Danone has done, that is why the position strategy in a close future could be as in
other Asian countries such as Japan or China: one of the yogurt best-seller.

4. Pricing strategy

• Price comparison to competition

In Korea, Yogurts have high prices, that is why Activia's price would not be a real major
problem on the market, even though compared to other yogurts Activia has not a very high
price.

It is one of Danone's strategy: offering a good healthy products with a price that matches
the quality. Activia's fame has been partially done thanks to such a strategy.

In order to get the lowest price for consumers, the best idea would be to produce the
yogurts themselves in Korea. Indeed, cost are lower there than any other western
countries.

19
Regarding prices on that special Korean market. Activia's prices are quiet similar to its
other competitor. Indeed, Activia plain taste yogurts are 2280 South Korean Won that is
worth 1.36 Euros for 4 boxes. Then, one of its famous competitors Yoplait is 1800 South
Korean Won that is worth 1.10 Euros. Activia is then on a similar price range. However,
retailer brands are 900 South Korean Won cheaper than Activia.
We can say that the price strategy taken by Activia is a strategy of being at a high standard
of price. That is to say, Danone is trying to be a high level. Activia is one of the most
expensive yogurts on the Korean dairy market. The best thing to do, in order to be adopted
by the Korean consumers is to create discounts such as Buy one get one free or others
such as promotions.
Indeed, it is a totally new market for Activia and Danone, even though a lot of Korean have
heard about Activia thanks to the globalization.
Moreover, samples or degustation are also welcome to attract consumers, it is the best
way to get people and to be known in such a market.

20
5. Distribution

• Channels and Intermediaries5

To produce its yogurts Activia, Danone decides to build a factory in Korea. This factory is
based in Muju and it construction started in 2008 and finished in the beginning of 2009.
Danone choose to build a factory in Korea for two important reasons:

Firstly, Danone wants to be integrated in Korea and more generally in Asia. That’s why
Danone decides to product its yogurts in Korea. The Korean’s culture is totally different of
the European’s culture and to be integrated in Asia and in Korea for long time, it’s
important for Danone to have a facility and a factory in Korea.
Secondly, the work cost is less expensive in Korea. So, for Danone is more interesting to
produce its yogurt in Korea. This high-technology factory is one of the most automatic
operations of the group Danone.

In the Korean’s culture, it’s important for a foreign company to have a partnership with a
Korean’s company to have access to the biggest shop in Korea. That’s why Danone
signed a partnership with LG Group in 2009. LG Group has a food division, Household and
Health, which is the biggest company in the food distribution in Korea. LG is the exclusive
partnership for all the distribution for the yoghourts Danone. Thanks to this partnership,
Danone can launch it new product and Activia will be sold in all the food market.
For the distribution, Danone understood that to launch a product in Asia and in Korea, it’s
important to have a partnership with Korean’s company but also to have a facility in Korea
with teams who work with Korean to understand the needs of the Korean consumer but
also the business habits in Korea.

5
Appendix 6

21
6. Integrated marketing communication and promotion strategy

• Advertising Strategy

To launch it new product, the yogurt Activia, Danone decides to launch a marketing
operation in the street of some big city of Korea (Seoul, Busan, Daegu, Ulsan, Daejeon).
This marketing operation starts with yogurt tasting in the big street of this city of Korea.
Some hostesses will give in the street of Korea some yogurt Activia.
There will be some hostesses at the bottom of the business building for people who work
in the building.
With this strategy, Danone will start to be famous in Korea and the hostesses could know if
people like the taste and the yogurt and if not why. The hostesses could also give some
information on the product, Activia but also on the company, Danone Group.
In the same time, an advertising of Activia will be diffuse on the Korean TV and in Korean
Newspaper.

• Public Relation

Danone is a new investor in the Korean market, and so finds to create a new business
network to set up better on this new market. That’s why, M. Rigoud, the CEO of the
Danone Group will open the new facility and the next factory the next October with
Zinedine Zidane. Every year, Danone organize the world cup for the young footballer, the
Danone Cup, and Zinedine Zidane is the sponsor of this competition. For the next edition,
Danone tries to collaborate with the Korean Football Federation to select a team to
represent the Korea for the next edition of the Danone Cup in Brazil.
This kind of event permits to Danone to be famous in the world and in Korea and
especially in the young Korean.

• Promotion Strategy

For the beginning, Danone will use the pull strategy and so use it notoriety in the food
sector and more particularly in the yogurt sector. Thanks to it notoriety, Danone could
attract the Korean consumer to a new Danone product, Activia.
In a second part, Danone will use the push strategy, that is the intermediaries between

22
Danone and the consumer with it new partnership, LG Group and more particularly,
Household and Health, which permits to Danone to enter easier on the Korean
hypermarket. And after, Danone could use it product and more especially, the taste to
attract some new consumers. With this promotion strategy, Danone enter in the Korean
market thanks to it partnership and it famous name, Danone. After to launch it product,
Danone could develop it promotion strategy around it product, the yogurt Activia and it
taste.

23
 CONCLUSION

Danone, the word leader in dairy products is now implanted on the South Korean
market with its range of products ACTIVIA.

The more difficult for the company is to impose itself front his competitors, (Yoplait,
Nestlé...) and the domestic competitors, which get 80% of the market share such as Yakuit
Korea, Namyang Dairy Products, Maeil Dairy Industry. Besides, we have seen that the
Korean market for fresh dairy products is one of the most competitive in the world.
Danone is the last company to enter in the Korean market, so it had to develop a powerful
strategy. We have seen previously that in order to impose his products, Danone has
chosen to partner with a major Korean supplier: LG, which will help to penetrate the
market.

The products proposed by Danone are not simple products, they get healthy, and they are
based on a pro-biotic culture offering the concept of “well-being”. For several years,
Korean people are interested in their health, and they consume more yoghurts than
before. Asia, and more precisely Korea is a promising country, foreign companies have
reason to penetrate this market. However, they must develop an efficient strategy to win
the trust of its consumers and to impose his weight front the high competition. That is why,
the launching of a new range of products has to be precisely elaborated to match the
needs of its consumers.

Culture, language and geographical boundaries are not a problem to launch a new
product, however it must be careful about these factors to correspond to the consumers.
Publicity has to be in cultural norms while respecting the product identity. For Activia the
slogan stays unchanged in the worldwide: “Active inside and you can see it outside”.

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 Appendices

Appendix 1:

Appendix 2: Pyramid of ages - South Korea 2008

Source: Data from U.S. Census Bureau, International Database

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Appendix 3: Population in South Korea

Source: Data from U.S. Census Bureau, International Database

Appendix 4: Growth rate in Korea

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Appendix 5: Growth rate per products

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Appendix 6: Structure of classic distribution in Korea

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 REFERENCES
Articles on websites:

• Lee Eun-joo for Joongangdaily, 2009. New Danone yogurt on the way, South
Korea.

Available from:
http://joongangdaily.joins.com/article/view.asp?aid=2909627
(22nd March 2010)

• Konnors group for Trading market.2009, Danone Korea launches four yogurt
products under Activia brand ,South Korea.

Available from:
http://www.tradingmarkets.com/.site/news/Stock%20News/2514673/
(22nd March2010)

• New Zealand Trade and Enterprise for New Zealand Trade and Enterprise, 2009,
Sector Profile for Dairy products in the Korean Market, South Korea.

Available from:
http://www.nzte.govt.nz/explore-export-markets/market-research-by-industry/Food-and-
beverage/Documents/Dairy-market-in-South-Korea-Feb-2009.pdf
(22nd March 2010)

• « Les produits laitiers Danone font leurs premiers pas en Corée du Sud »

Available from:
http://www.aujourdhuilacoree.com/

• « Zidane in Seoul for Danone Cup »

Available from:
http://www.fkcci.com/fr/activites-de-la-fkcci/evenements/pictures-gallery/091030-zidane-in-
seoul-for-danone-cup.html?tx_gooffotoboek_pi1[fid]=2&cHash=3edebfecc8

• « Corée du Sud: lancement des produits de la marque Danone sur le marché »

Available from:
http://www.ubifrance.fr/produits-laitiers/

http://danone.co.kr/product/healthActivia.asp

http://www.danoneetvous.com
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Books:

Exporter en Corée du Sud - Yves De Ricaud 2006

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