T ANG E XPANDS ITS U NIVERSE ! Presented by: Melisa Fryman and
Yu Chen
Slide 2
T ANG S ALES B LAST O FF W ITH NASA Originally invented and
marketed in the U.S. in 1957 by General Foods. Kraft Foods acquired
Tang and used NASA as a marketing tool. In 1962 Tang was adopted by
the space program to improve the taste of drinking water produced
as a byproduct of the life support system in the Gemini space
craft. In 1968 Tang sponsored ABCs network coverage of Americas
first manned flight around the moon - Apollo 8 mission. Early
Television Promotion Strategy:
http://www.youtube.com/watch?v=TWghCdIqedA&feature=player_embedded
http://www.youtube.com/watch?v=Wf1kw5Yp9Ck&feature=related
Slide 3
T ANG M ARKETING S TRATEGY G OES G LOBAL 25 years ago Kraft
began marketing Tang to China to mothers who believed children
needed more nutrition and found water boring - Tang fit their
needs. In 2006 sales including the China market grossed $500,000.
Beginning in 2007 an aggressive international marketing campaign
known as Winning Through Focus implemented in new markets. Tang
makes water more exciting
Slide 4
S. W. O. T Strengths: 1. Market penetration - Tang holds the
largest powder drinks market share in China. First introduced to
China in 1986 Tang = the powdered fruit drink And the powdered
fruit drink = Tang
Slide 5
Tang Makes Water More Exciting 2. Tang is creating new products
and engaged in indigenization. http://www.tudou.co
m/programs/view/p2 3sQQ89oTI/
Slide 6
D ISTRIBUTION 3. Kraft has its own Tang manufacturing
facilities in Tian Jing, Su Zhou and other districts, which
guarantees the distribution of the product. Tang has its own unique
distribution method in China.
Slide 7
Weakness: Price: The price of Tang is higher than other similar
products. Cost: Raw material costs and labor costs have increased,
so the production costs have also increase. S. W. O. T
Slide 8
Opportunities: Currently, salaries are higher than before, so
consumption ability has increased. The demand of healthy food has
increased.
Slide 9
S. W. O. T Threats: 1.Competition and challenges from other
drinking products. 2.Now people are changing their attitude towards
drinks.
Slide 10
R EBRANDING T ANG IN NEW MARKETS Krafts Tang sales doubled in
the last 4 years to $1billion. 2/3 of Growth comes from new
flavors, sizes & packaging in five new markets: Argentina,
Mexico, Brazil, Philippines & the Middle East. Innovative
flavors cater to local tastes. Krafts acquisition of Cadbury in
2010 assisted growth by opening up more distribution channels-
corner stores to core Tang markets.
Slide 11
M ARKET C USTOMIZED P ACKAGING Affordable, convenient packaging
unlocks growth. Traditional canisters were too big in some markets.
Smaller 2 liter sizes were made for Mexico priced below 50 cents
USD, and single-serve sizes were made for the Middle East.
Slide 12
N UTRITION AND L OCAL C ONTROL Giving local leaders from target
markets freedom to act as entrepreneurs was a main factor to the
success of Tang in developing markets. They use a glocal approach,
combining global and local expertise. Nutrition and tastes were
customized for local markets. In addition to the basic formulation
with vitamins C and A with minerals, Iron was added in Brazil and
the Philippines.
http://www.youtube.com/watch?v=Bj1DoChcEEk&feature=related
Slide 13
M ACROENVIRONMENT Krafts Marketing Strategy included
manufacturing Tang in the countries of the new international
markets: Brazil, the Philippines, and China. The Economic
Environment effects consumer purchasing power. Value marketing
offers consumers in developing markets quality at a fair price.
Results: lowered selling price in market segment, and employment
that provides increased income to increase overall sales. Tang
Manufacturing Facility in Pernambuco, Brazil (1of 6) Opened in May
of 2011, employing 800 locals, and providing an economic benefit to
society. Latin America is the largest international market for
Tang.
Slide 14
K RAFT P UBLIC R ELATIONS Tang Goes Green New standardized
powdered beverage pouch size in Latin America eliminated 3 mil.
pounds of package refuse annually. Dry mix packaging uses less
materials than bottled beverages. Tang launched the Prep, Drink, Do
Public Relations campaign in Brazil (2010) and recently in Mexico.
90,000 kids joined the Green Brigade for package recycling. $10
million donation to Bangladesh & Indonesia To eradicate
childhood malnutrition by empowering women with agricultural
education and creating microcenterprises for sustainable farming.
This is an investment in the region with expectations of future
sales of food products.
Slide 15
S UMMARY The corner stone of the marketing strategy in the
international markets was more autonomy for local leaders. It
allows the company to act like a small operation in country, while
leveraging its scale as an international firm. Ideas from the local
leaders assisted Kraft in packaging and flavor/formulation
decisions. Market research in the developing international markets
was key for producing products that fit the cultures. Initially,
China preferred powdered drinks by the glass not the pitcher.
Flavors to fit the cultures were essential to boosting sales. In
2009, after introducing new specialized flavors to specific
regions, sales jumped from a meager 4% growth in 2008, to a 42%
increase in Latin America and 25% increase in Asia Pacific markets.
Building manufacturing facilities in new markets reduced costs of
production, provided jobs for local residents and increased incomes
and buying power of those residents. Thus, increasing sales of Tang
in those markets.