Name: Thuy Vu Course: Selling to export market

Student number 1504160 Assignment 1

1. Reasons for Danish Klassic to not meet expectations

To understand why Danish Klassic failed to enter a new market, a small research was made to compare
current cream cheese brands in Saudi Arabia. In a research, more than a half of the total amount of
cream cheese was distributed through hyper market and a quarter of it was sold through supermarket.
Therefore, Lulu hypermarket in Saudi Arabia was chosen for a quick competitor analysis. The result is
illustrated in table 1 below.

Brand Dannish Klassic Puck Kraft Almarai Nadec

Packaging

Material Brick carton glass glass glass Glass

Size 200 140, 240, 500, 235,430, 120, 500, 900, 500
(gram) 910, 1100 490,890 1100
Colors Red, blue, white White, blue, White, blue, red White, blue, White, blue,
yellow yellow yellow
Made in Denmark Riyadh Not given Not given Not given
Language Arabic Arabic, English English Arabic, English
Arabic,
English
Table 1: Cream cheese brands in Saudi Arabia (Source: Lulu hypermarket 2019; the current
author.)

Packaging: Based on the fact that after a change from brick carton to glass, Danish Klassic gained their
market gain, it is implied that Saudi Arabia market were familiar with cream cheese in jars. 4 out of 5
brands (except for Philadelphia) sold on Lulu hypermarket have their cream cheese and feta cheese in
glass containers. However, there is no brand having long-lasting cream cheese in a carton brick.

Package size: From the article, Danish Klassic cream cheese first arrived in a pack of 200gr. After the
package was redesigned and the material was changed into glass, it came in 2 sizes: 140gr and 240gr.
Nowadays, it comes in 5 sizes to suit the increasing demand in dairy product with lower price per unit.
Other competitors of Puck such as Kraft, Almarai also offers their products with a wide range of sizes.
Nadec is the only brand that having cream cheese in a single size the way Danish Klassic did. Selling
products that come in various sizes match customer needs with their purchasing decision.

Package colors: Danish Klassic package came in three different colors: red, white and blue. It was poorly
designed and packed in cartoon which made the product did not catch the attention of end users. Red
color is often false believed in food industry to increase appetite but in fact people consume less food in
a red plate than in a blue plate or white plate (Harrington 2015). In a research explain color meaning in
Middle East, red color brings anger meanwhile blue is a sign of safety and protection, yellow tint relates
to happiness and prosperity and white is the most favorite color used in Saudi Arabia (Alkhamisi et.all
2013, 19; & Yasmin 2017). It might not a coincidence that all of cream cheese packages are mainly
Name: Thuy Vu Course: Selling to export market
Student number 1504160 Assignment 1

designed in blue and white. Opposite to aiming at minimalistic designed favored in Western countries,
Saudi Arabic consumers expect the freshness, happiness and peacefulness from the design. It is
interesting to note that the main colors which are used in all current cream cheese products are blue
and white.

Research and Development: Danish Klassic invested a half of its total investment in running marketing in
tradition marketing channels to catch the most attentions of their target market. However, they did not
invest much in research and development which is the first step in the business chain to understand
their culture differences, consumer behavior, buyer decisions… Due to too high marketing cost but low
returns due to lack of cultural awareness, they had to withdrew from the market in 1988.

Language: Danish Klassic advertised their products in Arabic however, in the new package design as well
as comparing with their competitors, the language support is in both English and Arabic. This will expand
their English-speaking customers and make the product more professional.

2. The brand name Danish Klassic

When first hitting the market, the marketing strategy was to focus on presenting a high-quality product
made in Denmark. The brand name “Danish Klassic” implied to the assured quality of cream cheese
made from fresh cow milk from fields in Denmark. It was also expressed through the sign “made in
Denmark” on the package. After the change, the product now is made in Dyadh, Saudi Arabia to present
a local friendly brand.

The design of the package was not excellent as mentioned before. It looks pale and does not encourage
people to try the product. However, if a brand wants to express its “classic”, the design should be
simple. To some extents, it achieves a simple classic look. In my opinion, their brand name follows their
marketing strategy and it is not a bad name.

I personally do not know why the brand “Danish Klassic” failed to gain its brand equity. Puck or Kraft is
either short or easy to remember but focusing on the origin of the product is a good marketing strategy
if a new product wants to differentiate from its competitors. Karou & Khemakhem (2019) states that
developing country consumers prefer foreign products meanwhile developed country consumers
prioritize domestic products. Therefore, it should have applied in this case. If Danish Klassic is introduced
in Vietnam, it will win the market. Since in my country, any products that are written in any languages
than Vietnamese even that the consumers cannot understand, are a symbol of high quality. The further
the distance, the higher the quality perception.

3. Meaning to Finnish companies

The case company Dannish Klassic leaves a lesson not only for Finnish companies but also for other
enterprise aiming at internationalization. There are a few things that companies should consider when
entering a new market. However, the first step is to invest time and efforts in doing market research.
How much different it is will depend on how far the two countries are and how different their cultures
are. It is important to understand customers we are selling to, to fulfill their needs before investing
money in and to minimize losses.
Name: Thuy Vu Course: Selling to export market
Student number 1504160 Assignment 1

Culture awareness is an important factor to note. For example, even within Vietnam, people enjoy
cooking at home in the North while preferring eating out in the South. Mc Donald first entered Ho Chi
Minh city in the Southern part in 2014 and they had so much international experience. They failed to
enter Vietnamese market because they were unable to adapt to the local taste and not be able to
compete with local options (Eric 2017). It has been traditions for the Vietnamese people to believe that
fast food and fried food are unhealthy and they prefer food that is served fresh and including rice,
vegetables salad.

Marketing strategy also needs to suit new market. Marketing is a tool to approach potential customers
and firms need to make them reasons to try their products instead of sticking with their competitors.
The more detail the customer segment is, the easier it is to find what they like about. Then after that,
marketing strategy can be created to attract their attentions. Language selection, cultural difference,
customer researches are things need to be considered to make an effective marketing strategy.

Packaging seems to be a small thing that are often forgotten in entering new market. However, with the
change from carton to glass in the case study given the taste is similar, Danish Klassic gains its market
again. Package is the visual tool presenting the company, so it applies what a firm understands about
their customers.

Therefore all of the factors contributing value to customers need to be studied because it may be
obvious in the domestic market that customers like this might become a point that the customers do not
like in the target market. Therefore, research and development should be invested the most in
understanding and adapting to the target market.
Name: Thuy Vu Course: Selling to export market
Student number 1504160 Assignment 1

Source:

Alkhamisi, A; Ba-brahem, A; Abdulla, A. 2013. A study of color as marketing cue in Saudi Arabia. Vol 5,
(1). URL: http://www.sobiad.org/eJOURNALS/journal_IJSS/arhieves/IJSS_2013_1/Abrar-Omar.pdf.
Accessed 7 Feb 2020.

Eric, J. 2017. American fast food fails to win over Vietnam. URL:
https://www.efe.com/efe/english/entertainment/american-fast-food-fails-to-win-over-
vietnam/50000264-3401851. Accessed 10 Feb 2020.

Harrington, B. 2015. Why are fastfood signs red. URL: https://www.businessinsider.com/why-are-fast-

food-signs-red-2015-9. Accessed 7 Feb 2020.

Karou, S & Khemakhem,R. 2019. Consumer ethnocentrism in developing countries. Vol (52), 2, pp.63-71.
URL: https://www.sciencedirect.com/science/article/pii/S2444883418300809. Accessed 7 Feb 2020.

Lulu Hypermarket. 2019. Cream cheese. URL: https://www.luluhypermarket.com/en-ae/. Accessed 7

Feb 2020.

Yasmin, H. 2017. The meaning of color psychology in the Middle East. URL: https://stepfeed.com/the-
meaning-of-color-psychology-in-the-middle-east-1935. Accessed 7 Feb 2020.