Question

Danone SA, the French food products company, targets consumers in developed countries with premium brands such as Evian and Badoit mineral water and the Dannon and Activia yogurt brands. Which target market strategy does this illustrate?

1) Differentiation strategy
2) Cost leadership strategy
3) Focus strategy
4) Market penetration strategy

Answer 1

Danone SA exemplifies a differentiation strategy by offering premium brands and creating a perception of higher value among their products. They target consumers in developed countries looking for quality and brand prestige in mineral water and yogurt products.

Step-by-step explanation:

The French food products company Danone SA employs a target market strategy that focuses on providing high-end products such as Evian and Badoit mineral water, as well as the Dannon and Activia yogurt brands, to consumers in developed countries. This strategy reflects a differentiation strategy, which is characterized by creating a perception that their products are distinct from competitors' offerings in terms of quality, brand image, and value provided to the consumer.

The practice of product differentiation is essential in monopolistic competition and can also contribute to the establishment of an oligopoly. By differentiating its products through variety, styles, flavors, brand recognition, and marketing, Danone SA seeks to position its brands as premium within their respective markets, thereby aiming to attract a specific segment of consumers willing to pay more for perceived higher quality and brand prestige.