Introduction
Marketing sustainability and the effectiveness of promotional campaigns are often the defining criteria for business success. The example of Oreo, the globally known brand that produces filled biscuits, is evidence of this statement. Starting its business in 1912, after over a hundred years of development, the company has been transformed more than once, changing its name (Racoma, 2019). The final name was given in 1974 (Oreo Chocolate Sandwich Cookie), and since then, the brand’s products have become globally recognized (Racoma, 2019). One of the company’s key features is a unique way of interacting with consumers, namely a strategy based on recognizable biscuit consumption practices, despite the fact that other confectionery products are manufactured under this brand. Although such pastries are made by many other companies, Oreo is one of the leaders in its industry, and a competent marketing policy is a significant prerequisite for this. This paper aims to assess the specifics of Oreo’s strategic development and identify relevant solutions that have influenced the business’s global success. The main factors to evaluate are the marketing mix consisting of 4Ps with a primary focus on product, pricing, and place, as well as brand positioning.
Oreo’s Marketing Strategy and Mix
The variety of promotion strategies is a factor that equalizes market participants and allows them to choose appropriate promotion algorithms based on innovation, pricing, or other criteria. According to Dwivedi (2022), Oreo’s marketing strategy is largely based on momentum-building tactics. In other words, the successful choice of a number of parameters, namely time, place, method of influence, and some other characteristics, are the critical components of success and client recognition. Masud (2020) argues that due to the brand’s global exposure, Oreo has been able to successfully promote new products and not only cookies, which is largely justified by the gained customer loyalty. The company’s ability to dominate other market participants and avoid the threat of substitute products characterizes Oreo as a sustainable brand. As the factors for evaluation, the company’s product, pricing, and place can be considered, which will reveal characteristic aspects related to strategic development in the marketing plane.
Product Strategy
Oreo’s market success is largely associated with the success of one product, namely a round-shaped chocolate biscuit consisting of two halves and containing cream inside. Masud (2020) notes that this shape, traditionally called a sandwich, is easy to sell because its simplicity and uniqueness are key success factors. In addition to the biscuit itself, the company also pays attention to the filling, which comes in cream, strawberry, chocolate, and other flavors. Depending on the preferences of local markets, the brand supplies the appropriate products, which helps avoid an oversupply of products and, at the same time, addresses consumer demand successfully. Elliott (2021) draws attention to the shape of the cookie and argues that the game format promoted by the manufacturer is a marketing coup. As the company slogan says, “Twist ‘em, dunk ‘em, or just plain eat them!” (Elliott, 2021, p. 6). This playful form of consumption resonates with millions of children around the world, which, in turn, is an additional way to increase sales since adults, as a rule, seek to satisfy their kids’ interests. As a result, Oreo has created a sustainable product strategy that is globally recognizable.
While analyzing Oreo’s cookies as the main product of the brand, one can note that it is in its growth stage in the life cycle. There are no obvious drops in demand, and the company continues to increase its sales potential in different countries, expanding target markets and strengthening brand value (Masud, 2020). Compared to the maturity stage that many other corporations are in, the brand in question does not need to stimulate sales through tough decisions and drastic change strategies. In addition, Oreo withstands competitive constraints by being one of the leaders in its chosen line of work, which also speaks to its growth stage and eliminates the need for a jump start. Unlike some rivals, the company successfully sells products due to recognition, which is a strength. The brand is globally recognizable and well-known by different client segments. Oreo’s cookies are classified as basic products since they are affordable and not luxurious, which allows different categories of the population to purchase them on a daily basis. Thus, the uniqueness of the product is complemented by its availability, which opens up opportunities for buyers to purchase freely in any volume.
Among the key benefits that customers see when purchasing Oreo cookies, one can mention a good taste profile, a variety of the line, as well as customer focus. The company always meets the interests of consumers and offers a number of flavors and fillers that are characteristic of the preferences of individual regions. This differentiation is highly valued by the target customers and is beneficial for both parties. Due to the rich assortment, more buyers are willing to buy the corresponding flavors of cookies, which, in turn, is in the hands of the company and allows it to capitalize on profits significantly. Dwivedi (2022) also draws attention to brand association manifestations; eating a cookie that consists of two halves with fillings inside is mentally associated with the Oreo brand. It was the first company to popularize this form of cookies. Therefore, while evaluating the corporation’s product strategy, one can claim successful work.
The competitive factors that can potentially influence sales are associated with imitators’ activities, price differences, product differentiation, and scope. For each of the characteristics, Oreo provides rivals with worthy competition. The brand is perceived as the one whose shaped cookies are original, which reduces the risks associated with imitators. In terms of price parameters, the product is affordable, and with regard to differentiation, a wide range is presented. By covering numerous markets in different countries, the company is far ahead of its rivals. As a result, by creating a recognizable brand and selling it cheaply, Oreo has realized the goal of global promotion and gained popularity not only due to its delicious but also affordable products.
Pricing Strategy
To satisfy the interests of the largest possible number of consumers globally, Oreo adheres to a policy of democratic pricing and promotes affordable products. According to Masud (2020), this strategy is justified and allows the company to maintain high levels of sales while eliminating the risks associated with rivals’ activities or new market entrants. This factor is particularly important since, due to a large number of market participants, even small changes in prices can be a driver of shifts in consumer interest. In addition, Oreo sells products that are in demand among different populations, which enhances the value of building an adequate pricing strategy. Masud (2020) evaluates the average cost of these cookies and states that compared to other popular brands, of Oreos are 17-20% cheaper (p. 88). These figures indicate a significant market success because, adhering to an affordable pricing policy and, at the same time, having stable profits, the company is a success with consumers.
When assessing the effectiveness of the pricing policy, one should note that adhering to the principle of affordable sales is a rational decision. Customers are not willing to pay much for a basic product, and a low cost allows for constantly attracting new buyers. In addition, having established itself as an affordable brand, Oreo cannot dramatically increase the price of products since target markets will clearly react negatively to this. Any increase in product costs occurs in the standard stage and is insignificant, which does not affect the overall demand. Thus, the corporation does not have to adjust its pricing policy to specific restrictive measures or requirements from the outside.
The pricing strategy Oreo adheres to in its operations is competitors-based. According to Masud (2020), the company relies on the cost of similar products from rivals to form an affordable price range and, thereby, retain the target audience. This method is convenient largely due to an opportunity to not only maintain the customer base but also to monitor rivals’ activities, thereby not missing any social trends or other parameters that can affect demand. Occasional discounts are an essential factor in maintaining customer interest, and depending on demand dynamics, specific offers can be applied to sell products sustainably. The campaigns Dwivedi (2022) mentions are the result of targeted work to create value propositions and strengthen brand loyalty, which is largely accompanied by price aspects. In addition, by setting a reasonable price range that is different from that of competitors, Oreo secures an image of a democratic brand, which, in turn, has a positive effect on the share of sales. Therefore, the company’s pricing strategy may be characterized as successful and corresponding to business interests.
Place Strategy
Global product promotion is one of Oreo’s strengths, allowing the company to have stable distribution routes in numerous global regions. Dwivedi (2022) notes that the brand utilizes the “Mondelez International distribution network to reach out to its customers” (para. 27). Moreover, to reduce the logistics costs associated with transportation, the corporation has production factories on all continents, which, according to Masud (2020), is evidence of a global business. To control supply and demand parameters effectively, Oreo’s analytical department is constantly working to establish optimal delivery routes to distribute cookies and other confectionery products with minimal costs. Racoma (2019) states that the corporation operates in more than 100 countries, and this result confirms the company’s global presence, making it one of the most recognizable brands, along with such corporations as Coca-Cola or PepsiCo. In terms of points of sale, products are sold at different outlets, including small shops, large retail chains, and other stores, which is also evidence of a well-built place strategy. Therefore, successful marketing activities and logistical initiatives have enabled the company to establish a global presence and conduct business internationally without fear of competitive activities or drops in demand.
To interact with target consumers, the company uses not only traditional points of sale but also online space. Social media posts, the development of the official website, and other activities on virtual platforms help attract new customers and retain old ones (Dwivedi, 2022). In addition, this mechanism is a convenient way to control sales volumes and marketing success by evaluating the dynamics of purchases on relevant online sites. Getting feedback from customers is also a crucial option implemented through communication in a virtual environment. For the distribution of products, Oreo adheres to a rational strategy of focusing on the extensive rather than the selective type. The brand’s products have no age restrictions or other constraints requiring compliance with specific sales conditions. This helps the company trade in a large number of outlets without critical limitations. Racoma (2019) draws attention to the absence of restrictions on distribution and notes the demand for the brand at different points of sale. This allows the company to market its products as widely as possible without having to segment sales by geographic criteria. Such a perspective is a valuable factor in enhancing Oreo’s competitive advantage.
As a marketing scenario, the push method is more acceptable than the pull principle. Oreo is at its growth stage and easily segments consumers by interests and needs, thus gaining an opportunity to promote products successfully. Unlike the pull practice, the push approach allows for more flexible marketing decisions. As a result, the products that Oreo introduces to target markets are delivered in response to demand indicators and benefits for the corporation but not as the goods on which the business is critically dependent. In addition, the brand does not need trade partnerships, except in cases aimed at “scintillating announcements while revealing its upcoming collaborations with leading brands” (Dwivedi, 2022, para. 19). Due to its optimistic strategy development and open market communication, Oreo does not conflict with other participants. The brand is globally recognized, which eliminates the need for tough competitive struggles. Regarding profit-sharing possibilities, some external factors may be decisive. For instance, Masud (2020) highlights the price dynamics of cocoa as one of the potential prospects for boosting the company’s revenues due to the distribution of assets among suppliers. In general, the corporation’s place strategy is successful and profitable.
Promotion Strategy
Oreo’s promotion strategy has proved to be effective largely due to the uniquely chosen advertising move associated with the shape of its cookies and the algorithm for eating them. Another important step is the rational use of social media. According to Dwivedi (2022), while posting humorous posts on popular media platforms, the company has built up an extensive subscriber base. Traditional promotion through television has become the background of success, but today, during the era of online advertising, the company has successfully realized the possibilities of digital marketing. Engaging celebrities to advertise cookies is a move that has ensured the popularity of the brand and increased the buying intentions of a wide range of consumers (Masud, 2020). By following social trends, Oreo also actively interacts with customers. Elliott (2021) cites the recent campaign to urge citizens worldwide to stay at home to prevent the spread of COVID-19 while also encouraging them to buy branded products to spend time with loved ones. As a result, one might note that all the components of the marketing mix are successfully addressed by Oreo, which has enabled the company to win customer loyalty globally.
Brand Positioning
One of the main objectives that Oreo adheres to in its brand positioning strategy is the desire to create an image of a product that could occupy a special place in the purchasing perception of consumers. In other words, if buyers do not perceive the difference between two similar products, the risk of achieving a high competitive advantage is reduced due to the lack of evident distinctions. Therefore, Oreo promotes products as those that have a distinctive status and are characterized by a popular advertising image promoted through various channels. Masud (2020) argues that a wide range of flavors is one of the strengths of Oreo’s brand positioning. Moreover, by constantly interacting with consumers, the company successfully segments the target market and offers appropriate products for different categories of the population, which is a crucial factor in a competitive environment with numerous participants. By evaluating how buyers feel about specific products, the corporation creates value propositions for both children and adults based on current social trends and market expectations. These activities are valuable prerequisites for successful brand positioning and strengthening the company’s status globally.
Along with many other large companies, Oreo actively promotes corporate social responsibility initiatives to maintain the status of a brand interested in contemporary issues. This aspect of positioning allows for maintaining customer loyalty and attracting new partners who are ready for collaboration. By supporting initiatives to protect the environment, help vulnerable communities, and other significant programs, the corporation maintains a favorable image and strengthens its prestige in the international arena. For instance, Brooks et al. (2020) provide an example of a campaign aimed at raising awareness of LGBT issues among citizens and mention the participation of Oreo which offered rainbow-colored cookies to the market. By actively studying target markets, the company takes into account individual demographic characteristics and cultural identities, thereby offering consumers those products that meet their expectations and do not violate any ethical beliefs. Particular attention to children’s interests has allowed the brand to strengthen its presence in those points of sale where children’s food products are sold. Such attention to the young audience is due to special advertising moves and the aforementioned practice of the unique eating of cookies, which turns an ordinary snack into entertainment.
A special factor in brand positioning is the company’s pricing policy. Oreo strives to maintain affordable product prices and aims to attract as many buyers as possible with any income level. Market segmentation based on age and cultural preferences is also a valuable decision. The focus on the promoting strategy has allowed Oreo to reduce the bargaining power of buyers because, according to Masud (2020), market segmentation is a direct precondition for such an outcome. Consumers have no influence on pricing or supply factors, which simplifies the operation and allows the corporation to operate freely by focusing on enhancing brand value. Continuous product improvement, in turn, is a factor designed to create consumer confidence in the company’s interest in consumer needs. Unlike other confectionery manufacturers, the Oreo brand positions itself as one that is suitable for people of all ages, which expands the range of potential buyers. As a result, through successful segmentation, stable sales are carried out, thereby strengthening customer loyalty and expanding the geography of coverage.
While paying particular attention to promotion and marketing steps, Oreo also strives to maintain the high quality of its products. From a brand positioning perspective, this activity is important for several reasons. As Masud (2020) argues in his research, about half of the respondents cite taste as a critical factor in product selection, and 36% mention flavor as a significant criterion (p. 91). The Oreo product line is extensive, and depending on the region, consumers may find the cookie they like the most. A high assortment is an additional incentive for customers to choose Oreo products from a wide list of similar goods, which is beneficial for the company and helps it strengthen its brand. In addition, targeted offers for different population categories increase promotion success and stimulate customer loyalty. Thus, a high-status image, the emphasis on promotion strategy, target market segmentation, corporate social responsibility initiatives, and high-quality product offering are the main criteria of Oreo’s brand positioning.
Conclusion
Based on the analysis of the marketing mix (4Ps) and brand positioning characteristics, the strategic development of Oreo has been assessed. The company has been a corporation operating in the global market for many years. Through an effective promotion strategy and the creation of unique value propositions for buyers in different countries, Oreo has earned high customer loyalty and has become one of the most recognizable brands. A focus on affordable prices for buyers, multiple outlets, active engagement of media opportunities, and a wide range of products are the key factors behind its market success. Segmentation and the promotion of corporate social responsibility initiatives are additional criteria that determine brand recognition in the international arena.
References
Brooks, M. E., Craig, C. M., & Bichard, S. (2020). Exploring ads of the world: How social issues are framed in global advertisements. Howard Journal of Communications, 31(2), 150-170. Web.
Dwivedi, C. (2022). Twist, lick, and dunk – Oreo’s marketing strategy. The Strategy Story. Web.
Elliott, C. (2021). Food marketing and the regulation of children’s taste: On packaged foods, paratexts, and prohibitions. Canadian Food Studies/La Revue Canadienne des Études sur L’alimentation, 8(1), 4-11. Web.
Masud, M. F. (2020). Marketing research and integrated marketing communication plan of Oreo. International Journal of Research Publications, 65(1), 79-102. Web.
Racoma, B. (2019). How Oreo adapts around the world. Day Translations. Web.