"We are investing in building brands for Chinese consumers, not to introduce Western brands to Chinese people," said Mark Clouse, Kraft's Beijing-based chairman-president for China. "If this is your goal, then you must first start with Chinese consumers and build brands and products that meet their needs, while using our global scale where it provides a competitive advantage."
Other marketers have found their popular Western brands don't necessarily fit local tastes and customs. Kellogg Co., for example, has struggled for years without much success to make cold cereal a breakfast item. But Chinese continue to prefer hot breakfast meals such as rice porridge.
How the Chinese eat an Oreo
By creating products and flavors that better appeal to young Chinese, Kraft has turned the mainland into the second-largest Oreo market in the world (after the U.S.) and a fast-growing market for its Tang instant-beverage brand.
With products such as Oreo flute wafers and white chocolate-coated wafer sticks, both introduced this summer, Kraft is moving Oreo, its most heavily advertised brand in China, "from cookie to sweet snacking," said Mr. Clouse. The products also reflect local food customs, since Chinese do not have a Western-style cookie habit.
"We're still protecting core equity but in China, it's not just a cookie brand; it's a confection and snack brand now too," he said. "We're also building Oreo as a food brand on an emotional-benefit platform, especially in China, where brands tend to be functional in nature."
To coincide with the launch of the products, which are featured in point-of-sale materials, Kraft is running two TV spots in China by DraftFCB for traditional Oreo cookies to provide brand support. One is a global spot, "Triple Play," featuring three young ballet students dipping the cookies into a glass of milk. The second, "Magic," was created for the mainland and depicts a Chinese mother and son enjoying Oreos.
Oreos for everyone
Kraft developed the coated wafer sticks in Beijing and the flute wafer in Taiwan, with mainland China in mind, but both products could be introduced in other Asian markets.
Kraft also put its development team to work on Tang. After discovering there were no major strawberry-flavor drinks in China, but that the flavor tested well with kids, the company created a strawberry Tang.
Although orange-flavor Tang is the most common of more than 30 flavors, the company tailors flavors to consumers' taste preferences in each market, such as sour cherry in Turkey and mango in Saudi Arabia and the Philippines. Even the orange flavor varies, with a sweeter orange in Brazil and a more-tart version for Argentina.
In China, Kraft has developed two other products for the Tang line, including Tang Sport, China's first sports drink aimed at kids, and a portable single-serving of Tang.
"There are a lot of sports drinks in the market, but they are targeting adults with their flavors, quantities and nutritional benefits. We've taken Tang's strong equity in fruit and orange flavors and brought those flavor profiles to a sports drink with the right amount of electrolytes to put back what the kids need," Mr. Clouse said.
As a child-friendly brand, Tang can make a sports drink that would be regarded as appropriate for kids. "Moms are fearful of other sports drinks because they show big athletes on the packaging, and think maybe giving those other products to kids isn't the right answer," he said.