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In its new campaign for its only biscuit brand, Oreo, Mondelez continues with the brother and sister motif. The campaign, which airs from the 9th of December, depicts the duo locked in a tussle over a pack of Oreos and a glass of milk. Only this time, the brother is none other than Bollywood's heart-throb, Ranbir Kapoor. The over-100-year-old brand, which has come into India when Kraft's food division is looking to get a larger share in the food pie, has used a brand ambassador only in two other countries - China and Argentina.
So far, Oreo has banked on portraying people-next-door, who play out the act of twisting it open and dunking it. Having launched two more flavours - strawberry and chocolate - what market exigency prompted Oreo to look to Kapoor for endorsement?
Chella Pandyan, associate vice-president, marketing, biscuits, Mondelez International, says, "When we looked at brand Oreo closely, we felt that there was an opportunity to slightly increase the age to which we appeal. We had used kids in our communication in the first two years, so we tended to get portrayed as a brand for kids. We had the product all right, but the communication needed to be more broad-based, and what better way than going with a celebrity?"
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The market for cream cookies had been traditionally viewed as one targeted at kids and their moms, who would shop for them. But it has moved on since the last decade, to include products and formats that would appeal to an adult just as much. Mayank Shah, group product manager at Parle Products, the leaders in biscuits, says, "Till about 2004-05, the cream cookie market was predominantly a kids market, packs would be priced at Rs 10. We launched cream biscuits for Rs 5 in 2004, the tendency to sample creams went up. They could budget a cream pack into their basket even after buying a marie or cracker for their daily consumption."
What had been a fruity-flavoured category, saw the advent of bourbons and dark chocolate fillings and, as with Oreo, flavours such as vanilla. So much so that, chocolate is said to comprise half of the cream cookie market today, followed by fruity fillings (25 per cent) and others. Shah points out that for an indulgence category such as cream cookies, which does not figure in one's daily diet, novelty is the key. Products like Parle's cream-filled Golden Arcs (or ITC's Dark Fantasy) and dark chocolate cookies have also ushered in premiumisation. Premium cookies as per market estimates still account for a small part of the cream and cookie market (around 0.15 per cent), which includes Oreo.
However, the brand had attempted to breach the premium-mass divide with its packs of three cookies for Rs 5 earlier. Pandyan who has worked on Oreo since right after its launch, says, "Our objective was to keep it accessible. There are other levers for a premium feel such as advertising and packaging. When you open a pack, you will rarely find it powdered because of our investment in the boxes."
Oreo has been able to corner around Rs 270-280 crore in revenue according to industry estimates (of the Rs 1,550-1,600-crore premium cookie market). That means its three flavours and bare minimum pack variants (two-three for each flavour) has given it around 1.3 per cent of the overall biscuit market and double of that in the cream and cookie market. It has had to go up against the stalwarts which now includes ITC in the biscuits space. While cookies, which are generally value-added, premium biscuits, is lorded over by Britannia, cream cookies, including the sandwich cookies from Oreo, are led by Parle Products. Creams and cookies comprise nearly half the biscuit market that Parle leads (followed by Britannia and ITC).
Pandyan notes, "Biscuits is an important pillar of Mondelez India. Oreo is one of our 10 power brands in two years." A market observer says that while smaller packs had driven trials on its launch, Oreo has since reduced its emphasis (distribution for example) on the Rs 5 packs and now focusing on contribution from its Rs 10, 20 and 30 packs.
It is now attempting to reach out through its association with a popular celebrity. Cream cookie brands need not have worried about reaching out earlier when rural and semi-urban accounted for just 15 per cent, according to Shah. However, with these markets contributing to 50 per cent of the creams market, a brand can not make do with just metros and tier I towns anymore. Pandyan says that distribution in close to 700,000 outlets will play a role as the count is a lot more than classic chocolate-selling footprint.
As for choosing the messenger, Pandyan says that Oreo will use not one, but two, for the campaign: The Tamil star Karthik Sivakumar for southern markets and Kapoor for rest of India. Deploying a south-specific campaign is being seen as Mondelez' attempt to cover ground in the southern markets. "Both of these guys cut across ages and embody a childlike lightheartedness that is at the heart of the brand," says Pandyan.
Yet, he insists that A&P spends as percentage of revenue has not gone up after the celebrity-signing spree. Oreo has heavily used point-of-sale activations and below-the-line marketing, apart from mainstream advertisements, so far.
For this campaign, Pandyan says, the media-use will be a calculated mix: "We have recognised the need to operate south a little differently, the intensity of share of voice has to be high. It is not about what we can do but what we must do in that market. However, in other markets, we have taken into account the fragmentation in urban TV-viewing, which has brought late-night programmes in vogue. So, our niche placements will take that into account."
The aptitude for digital marketing that had won Oreo the Cannes Cyber Grand Prix this summer, has also been carried forward by the Indian arm. Taking after New York's 'Daily Twist' campaign that illustrated 100 current events or historical anniversaries with Oreo cookies in 100 days, India has its 'Daily Dunks' on its Facebook page. "Both urban and small-town India have been moving on to digital, and hence, our contextual and timely takes on popular happenings," says Pandyan.
The challenge for the brand would be to tip the balance of its marketing spends. Market observers say that so far, Mondelez has been investing in the brand much more than its earnings.
