Mingchi Choo's Blog

At what point does friendly competition turn into an all-out war? And, more importantly: at what point should ethics be considered when waging that war?

With its first product released in 2007, Chobani could be considered an underdog in the yogurt world, especially when compared to a giant like Danone. However, Chobani became the largest seller of Greek yogurt in the US market within two years — so to retaliate, Danone upped the focus on its Greek yogurt line, Dannon Oikos, launching an aggressive marketing plan. Tactics used included changes to the packaging that emphasized the Greek origin of their product, advertising in men’s fitness magazines, and celebrity endorsements by a Greek-American actor named John Stamos. Coupled with a Super Bowl ad and countless in-store samples, this is a clear example of how a well-established player in the market can employ marketing to greatly impede the progress of newcomers.

Granted, this is something that should be expected in business, but it still highlights an interesting question: when should companies draw the line when it comes to aggressive marketing policies? Is it when they have forced all other competitors out of the market? Granted, the Greek yogurt market has not become a monopoly, but how close does it have to get before it becomes a question of ethics? On the flip side, is it acceptable because they are protecting themselves and their own profits?

Since 2011, Chobani’s market share has fallen from nearly 50% of the Greek yogurt market to 39%. This is a 11% drop, compared to Danone whose share rose from 18% to 29%. Chobani is currently fighting back through price cuts in order to hold on to its customers, and has recently recalled a shipment of moldy yogurt that has caused over 200 reported cases of illness.

Related Links:

Medical Daily: Chobani Recall 2013 Update: 223 Complaints Associated With Moldy Yogurts

Bloomberg Businessweek: A Culture Clash in the Yogurt Aisle

Bloomberg Businessweek: Danone Plots Revenge Against Chobani