Chobani was able to grow demand for its product by leveraging what promotion” strategy?

Introduction to Marketing 5C Analysis - Company, Customers, Competitors, Collaborators, & Context

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EMBA Pro Marketing 5C analysis for Value Innovation By Chobani case study
EMBA Pro Marketing Approach for Value Innovation By Chobani
Company Analysis - 5C of Marketing
Customers - 5C Marketing Analysis
Competitors - 5C Marketing Analysis
Collaborators - 5C Marketing Analysis
Context - 5C Marketing Analysis

EMBA Pro Marketing 5C analysis for Value Innovation By Chobani case study

Founded in 2005, Greek yogourt maker Chobani used value innovation to become the number one yogourt brand in the United States by 2011. However, due to some internal problems such as a lack of seasoned professionals and financial resources, and external factors such as competition and decline in demand, Chobani lost its market share to competitors starting in early 2013. With help from a private venture firm, Chobani took several steps to turn things around by 2016. Will Chobani be able to regain its leadership position going forward? If so, how will it fuel its growth? Arpita Agnihotri is affiliated with Northland College. Saurabh Bhattacharya is affiliated with Newcastle University.

Case Authors : Arpita Agnihotri, Saurabh Bhattacharya

Topic : Leadership & Managing People

Related Areas : Entrepreneurship, Manufacturing

EMBA Pro Marketing Approach for Value Innovation By Chobani

At EMBA PRO, we provide corporate level professional Marketing Mix and Marketing Strategy solutions. Value Innovation By Chobani case study is a Harvard Business School (HBR) case study written by Arpita Agnihotri, Saurabh Bhattacharya. The Value Innovation By Chobani (referred as “Chobani Yogourt” from here on) case study provides evaluation & decision scenario in field of Leadership & Managing People. It also touches upon business topics such as - Marketing Mix, Product, Price, Place, Promotion, 4P, Entrepreneurship, Manufacturing.

Our immersive learning methodology from – case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Leadership & Managing People field, company, context, collaborators, competitors, customers, Marketing Mix factors, Products related decisions, pricing strategies and more.

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5C Analysis is a marketing tool to do a situational analysis in which Chobani Yogourt operates in. It inculcates both the macro and micro environment factors that impacts Chobani Yogourt. The 5C analysis allows marketing managers to put probabilities to different types of risk exposure Chobani Yogourt is facing in the marketplace and design marketing strategies accordingly.

Marketing strategy is about making marketing decisions in the face of macro environment uncertainty, competitive pressures & strategies, and other economic factors.

The 5Cs of Marketing Analysis are - 1 - Company, 2 - Customers, 3 - Competitors, 4 - Collaborators, and 5 - Context.

Chobani Yogourt faces 4 major types of risk exposures – risk corresponding to technological innovations, demand risks, production or delivery risks, and international risks.

Company Analysis - 5C of Marketing

Key Question Answered – What are the strengths and weaknesses of the company and how marketing can improve the effectiveness of its core strength and alleviate the impact of its weaknesses.

Marketing managers at Chobani Yogourt needs to analyze the internal strengths and weaknesses of the company before making marketing decisions. Each organization has different marketing budget, different skill sets to execute marketing strategies and promotional campaigns. The company analysis will help the Chobani Yogourt to optimize the use of the marketing resources. In terms of the four risks mentioned above –Marketing managers at Chobani Yogourt needs to focus on risks corresponding to production and delivery risks. If the company fails to match the consumer expectations then no amount of smart marketing can build a sustainable competitive advantage.

Company Factors

Brand Equity – Chobani Yogourt has strong brand equity both among the existing customers and potential customers. It can leverage this brand equity to expand into new segments.

Quality of human resources to create and manage effective campaigns – Chobani Yogourt attracts some of the best talent in its industry and the skill level of Chobani Yogourt existing workforce is very high. Chobani Yogourt has strong marketing department which helps it to design effective and successful marketing campaigns.

Culture of the Chobani Yogourt – As the Value Innovation By Chobani explains the firm has a strong culture of product and process innovations.

Research and Development spending – As a leader in various product segments, Chobani Yogourt spends significant amount of resources on research and innovation in field of – product design, process optimization, marketing strategies, and building IT network to support all the promotion and distribution strategies.

Checkout Marketing 4P and Marketing Mix Analysis Marketing 4P & Mix analysis of Value Innovation By Chobani

Customers - 5C Marketing Analysis

Key question answered - How Chobani Yogourt can identify attractive market segments and choose a market targeting strategy.

Marketing strategy of Chobani Yogourt needs to meet two broad objectives – carefully selecting target market and designing marketing activities to achieve desired positioning in hearts and minds of the target market. Customer analysis by marketing managers of Chobani Yogourt can include – growth rate of the industry, potential market size of both the overall market and target segment, tangible and intangible product features desired by consumers in the industry, core purpose of buying the products, frequency of purchase, recent purchases, industry trends, income levels etc.

Based on our 4 broad risk framework for 5C analysis – marketing managers should focus on demand risk and technology risk in customer analysis section.

Customers Factors

Who the target customer is – Should Chobani Yogourt go for a broader segment or position its product in niche segment. My suggestion is that it should focus on the niche segment as it is highly profitable.

What is market size of the segment that Chobani Yogourt wants to target – I believe the market size will grow at a steady pace and it will present various opportunities to expand into adjacent segments.

What is the Customer Life Time value – Rather than focusing marketing efforts around single purchase, Chobani Yogourt should develop marketing strategy that can maximize customer life time value.

How to grow share of customers purchase basket – The decision marketing department at Chobani Yogourt needs to take – How it can grow the customer purchase basket share with Chobani Yogourt products.

What are the features most desired by consumers – Marketing managers at Chobani Yogourt needs to decide which are the features most desired by consumers and how Chobani Yogourt can position itself to deliver those 2-3 critical features.

Competitors - 5C Marketing Analysis

Key Question Answered – Who the competitors are, what their marketing strategy is, and how Chobani Yogourt can design its marketing strategy in view of competitive pressures and limited marketing resources.

The core function of marketing strategists and marketing managers is to design marketing activities that can help Chobani Yogourt to thwart competitive pressures from established players as well as potential entrants. Marketing managers of Chobani Yogourt has to make decisions regarding – Where to position the brands respective to Chobani Yogourt own brands portfolio and competing brands What are the marketing strategies of competitors. Should Chobani Yogourt competes directly with the competitors or find niche positions within the segments. What type of competition there is in the industry that Chobani Yogourt operates in.

Based on our four risks exposure framework – In competitors analysis marketing managers of Chobani Yogourt should closely analyze – demand risks and technology innovation risks.

Competitors Factors

Product Line Depth Decisions for Chobani Yogourt – Depth involves targeting different segments within the same product range. Higher the depth, the more the company needs to spend on individual brands without putting too much focus on the parent company.

Intensity of rivalry among existing players – if the intensity is high then the profitability is usually low in any industry. Thus it requires Chobani Yogourt to spend higher resources on marketing efforts.

What will drive future growth and how competitors will try to take share of that future growth – technology innovations can result in making present positioning less profitable so Chobani Yogourt needs to continuously innovate and look for new opportunities.

Product Line Breath Decisions – This not only pertains to Chobani Yogourt product strategy but also its distribution and supply chain management strategy. Broader line requires more positioning strategies and higher marketing spending.

Positioning strategy vis a vis competitors – The critical marketing decisions for managers at Chobani Yogourt is what strategic position to choose which at same time is – different from competitors and relevant to the customers.

Threats of new entrants to profits of Chobani Yogourt – Marketing efforts are often barriers to entry in the industry and new entrants not only have to have huge marketing resources to compete with the incumbents but also need high level of marketing know how.

Threats of substitutes to Chobani Yogourt – The threats of substitutes often arise either from economic cycle or technological innovation. It may require repositioning of certain brands on part of Chobani Yogourt in certain markets.

Countering Marketing Campaigns of Competitors – Often one competitor campaign has to be matched with a counter campaign to stop the product trial of the competitor’s product by the firm loyal customers. It has to be done to control the churn of customers.

Collaborators - 5C Marketing Analysis

Key Question Answered – How flexible & robust Chobani Yogourt supply chain is and how much bargaining power the collaborators in the value chain have.

Collaborators include the supply chain partners both upstream and downstream of the value chain. For doing Collaborators analysis Chobani Yogourt needs to critically evaluate the supply chain based on numerous factors such as – bargaining power, what suppliers bring to table, flexibility & agility of supply chain, revenue sharing at each step of the value chain.

Based on risk exposure parameters under the collaborators analysis Chobani Yogourt marketing managers should focus on risk exposure to international risks (because Chobani Yogourt has international operations), and production and delivery risks. For example if the collaborators effectively able to meet the demand increased by effective advertising of Chobani Yogourt marketing department then it will go a long way in enabling the company to thwart new competition and devise premium pricing strategy.

Collaborators Factors

Flexibility of supply chain and international risks – In international markets the critical question in front of Chobani Yogourt is how much localize based on local preferences. Rest of the decisions from production to marketing is based on this critical decision. Opportunities to localize the production and other processes to reduce risk of organization wide supply chain risk in international market.

Position and bargaining power in the value chain – If the collaborators have strong bargaining power then Chobani Yogourt will not able to sustain higher margins even with higher marketing expenditure.

Number of suppliers and abilities of the suppliers – If there are too many suppliers then it will become expensive for Chobani Yogourt to manage them but if the number of suppliers is too few then it will expose the company to supply chain disruption risks.

Managing delivery and services in times of uncertainty – Most global organizations such as Chobani Yogourt are diversifying rapidly to reduce delivery and supply chain risks. Chobani Yogourt should also focus on it.

Risks to intellectual property rights and patents – Operating in international markets can expose Chobani Yogourt to theft of Patents, Copyrights and other Intellectual Property Rights. Any marketing and diversification decision should be taken after evaluating these risks.

Context - 5C Marketing Analysis

Key Question Answered – Which are the macro economic factors that will significantly impact both the business model and the marketing strategy.

Context Analysis encompass the diligent analysis of macro environment factors such as – political and social environment, regulatory environment, economic conditions in the markets that the Chobani Yogourt operates in, rate of technology innovations in the industry, legal environment, environmental standards in the industry etc.

Two main forms of risk exposure in the context analysis are – International risks, and technology & innovation risks exposure.

Context Factors

Foreign Exchange Exposure – International operations not only bring risks of marketing strategies that are not relevant to specific market but also risk of foreign exchange exposure. In last 10 years most US organizations have lost money because of FX exposure in countries such as Venezuela, Argentina, Turkey, Russia & Indonesia.

Regulatory Framework – It not only impacts the type of the advertising and marketing campaign a company can run but also the type of products Chobani Yogourt can sell. For example the standards & regulations for Chobani Yogourt products in US and European Union are vastly different.

Political Risks to Chobani Yogourt – Geo-political risk have increased over the last three to four years with developments such as US-China trade situation, Brexit, and rise of yellow vests in France.

Economic – The consumer behavior during boom time and recession time is often totally different so marketing managers at Chobani Yogourt has to decide how the consumers will behave in the present economic situation.

Employment – Given the employment crisis in Western Europe and emergence of Gig economy and employment in US and all the major western economies – employment has become a critical factor in designing marketing strategy. Employment not only impacts the purchasing power of the customer but also impacts the self esteem and brands she can associate with.

Inflation & Diversification – Inflation impacts the pricing strategy of Chobani Yogourt as high inflation can result in lower income from the present sales.