Marketing 3300

Individual Project

Group 065 - MA

Code permanant :

I. Michel et Augustin : les trublions du got

Michel et Augustin is a French brand operating in the food industry. It was founded by

Michel de Rovira and Augustin Paluel-Marmont in 2004 and is recognized for having a

truly efcient marketing strategy. Indeed, the small company which started by selling a

single type of biscuits displayed in three avors at two convenience stores right next to

their former ofce in Paris has increasingly grown over the past few years, producing now

a wide range of snacks and drinks, being distributed by a sweeping variety of retailers and

strongly improving its brand familiarity. Based in Boulogne-Billancourt (an high-prole

suburbian town right next to Paris), it has developed very quickly into a reliable and

consumer-friendly brand having a two gures growth rate each year since it was created.

The development of the brand is clearly noticeable through the evolution of the product

range and the growing diverseness of their retailers as it will be detailed further. Moreover,

the famous Pinault family, (owner of the Kering Group, ex-Pinault Printemps Redoute -

PPR) which has been a shareholder of the company since 2008 through one of its

holdings, Artemis, has recently decided to proceed a seasoned equity offering of 3.7

millions euros and declared it was going to invest 12 millions euros over the next 5 years

in order to help the brand expanding worldwide. Accordingly to that investment, the two

founders have declared that their aim was to become the rst premium urban food brand

of the world, thus there seems to be a lot more to expect from the French entrepreneurs

over the next few years. The rst result of this investment and conspicuous development is

observable through the opening of a new ofce in Lyon, the very second of the rm, a

crucial step for a small business.

The rm which started by selling a biscuit named Le petit sabl rond et bon through a

couple of convenience stores now offers a wide range of biscuits, yoghurts, dairy drinks,

smoothies, some pastries and has recently launched four kinds of appetizers.

(Screenshot from micheletaugustin.fr)

2. The food industry : a rather complicated market for SME!s

As it is mostly occupied by huge rms such as Nestl, Danone, Kraft and Unilever, the

food industry can be harsh for small companies and start-ups but as in most industries,

innovation, quality and differenciation can be highly rewarded as Michel & Augustin!s

example proves it. Yet, there are some tendancies to analyze in order to get a better

understanding of Michel et Augustin!s success, they will be detailed in the following

paragraphs.

Over the past decades, the multiplication of food crisis (such as the Mad Cow Disease, the

Avian Inuzena, the Foot-and-Mouth Disease and the several scandals in the Chinese

food industry amongst other cases) has strengthen the mistrust of consumers in the food

industry. The organic, healthy and environment-friendly products have clearly took

advantage of this trend, the idea of consuming products which benets to health,

respectful of the environment and not full of avorants and preservatives having heavily

increased in the society and thus in the marketing strategies of the companies.

In terms of demand, food products are obviously necessary goods meaning that the part of

an household budget dedicated to food does not vary in function of the income. Thus, if

the income of an household decreases, this one will probably decide to lower other

expanses. A study published by INSEE in 2009 named Cinquante ans de consommation

en France explains that both consumption budget and its part dedicated to food

increased (respectively by 2.5% and 1.4%) between 1960 and 2007 and states that in

such a context le fait que les dpenses alimentaires continuent de crotre, mme un

rythme faible, s!explique aujourd!hui pour l!essentiel par des phnomnes de transferts en

faveur de produits de meilleure qualit, de plus en plus labors et diversis (essor des

dpenses de produits surgels et autres plats prpars) au dtruitement de produits bruts,

ncessitant plus de temps de prparation.

Therefore, trends and bandwagon effects are important in the food industry. Recently, we

have seen gluten-free products multiplying as well as palm oil-free products and fair-trade

ones. Weight Watchers is a quite good example of a rm which has been able to take

advantage of an emerging trend with the development of demand for weight loss products

and packaged food. As for Michel & Augustin, they clearly seem to benet of the

aforementioned transferts en faveur de produits de meilleure qualit as they based their

strategy on healthy and quality products.

In a market drived by a huge competition, differenciation, segmentation and positioning are

essential that is why marketing is a determining variable of a company!s market share,

therefore we will be discussing M&A!s marketing-mix and overall marketing strategy in the

next section.

3. Segmenting and positioning, an analysis of Michel et Augustin!s Marketing-mix

Michel & Augustin!s marketing strategy and taste for innovative communication has been

tied with a certain lack of budget for marketing when creating the rm. Their segmentation

has helped them to build an overall marketing strategy quite peculiar and distinguishing for

aiming at an audience avid of innovation. Indeed, the rm produces four kinds of goods :

sweet apetizers/biscuits, dairy products (yoghurts, drinks), smoothies and salted apetizers.

Those aforementioned markets can be segmented into the following classes : the regular

products, the organic ones, traditional products, the healthy and tasty ones (the

segment choosen by M&A for all their products) and naly the functional food.

The choice of serving the healthy and tasty segment is responsible for all the marketing

decisions took afterwards. The targets of this market are identied as individuals between

15 and 45 years old, urban and upper-class for the most part. They are dened by the

facts that they are willing to pay more for a qualitative product (made of great ingredients,

produced in a nearby area and free of avorants and preservatives) and seek for an

original experience.

After segmenting comes positioning which refers to what customers think about the brand.

As customers use to compare competitive brands, positioning denitly is a matter of

competition. M&A!s positioning relies on the products offered, the relationship between the

brand and the consumers and naly the image of the brand.

Through their products described as healthy and tasty, M&A claims to be a premium

brand. Their products reminds of some old recipes in a will to get older customers a bit

nostalgic while being innovative and mostly aimed at people who seek for an different

experience. The rather exotic and unusal avors of their products (for example the

Banana-Guava Vache Boire or the Pink berry-Thymus Sabls apritifs) is an

appealing way to differenciate from competitors.

Some of the brand!s competitors may have a similar approach such as Innocent with their

smoothies or Danone!s Les 2 Vaches but most of the competitors in the three

aforementioned markets are big companies which do not and cannot use a comparable

marketing-mix aimed at a submarket niche. Yoplait, for example, aims at teens with their

famous Yop but does not promote the healthiness of it at all because the product

contains lots of preservatives and articial avorants. As a matter of fact, M&A!s Vache

boire has been rewarded at the Salon de l!Agriculture two years in a row (2008 and

2009), respectively for the Rheum-Brown Sugar avor in 2008 and the Pinneapple-

Coconut one the next year.

The relationship between M&A and their consumers is also a decivise point of their

positioning. Indeed, their website offers plenty of ways to contact them and submit

comments or ideas about their products. The monthly doors-open events at their ofce

(which takes place every rst thursday of each month at Boulogne-Billancourt!s La

Bananeraie) is a particular way to connect to the consumers by hearing their critics and

comments, letting them know how the rm runs its production and what will be the next

products to be launched. Consumers take a special parts in some processes at M&A, one

example is a recent post on their Facebook page asking fans what avor they would rather

like to be sold for a new yoghurt (see screenshot below) this has also happened with a

packaging a few months ago.

There are others consumer-aimed events such as the pastry chef competition,

competitions to win holidays with the crew on their foody trips among other innovative

ways to connect and more regular ones such as events in hyper and supermarkets.

In addition to that comes the brand perception. Thanks to its colourfull visual identity,

childish logos and packagings added to the original names given to their products, M&A is

seen as a friendly brand. Their packagings, website and online presence enables the

development of a brand experience by using storry-telling (just like Vitamin Water does it

on their bottles, the packagings of M&A!s products often share a small story, a joke or a

recipe, and in most cases an invitation to come at La Bananeraie - their Boulogne-

Billancourt!s ofce). Choosing Michel & Augustin as their brand name might have been

one of the wisest choices the two foundators have made. It has clearly settled the

environment and the whole marketing strategy they were trying to create : developing

proximity to the consumers, offering the image of a nice start-up willing to make a

difference in their sector. As well as it is efcient for the French market by being short,

simple and timeless, the fact of displaying two French names could be successful to the

broad markets as it could convey a positive image helped by the great reputation of

French food over the world. As to expansion abroad, Michel & Augustin started selling their

products in the US on 2011 and made them available in more than 20 countries since

then. According to an article published on legaro.fr , their revenue abroad could increase

from 10% in 2013 to 25% of their total revenue in the next 5 years.

The marketing-mix of a brand can be analyzed through the 4Ps concept which stands for

Product, Place, Promotion and Prices. In order to get a better understanding of Michel &

Augustin!s stragety, here is an application of the 4Ps :

Product : described as healthy and greedy. Their number is continuously increasing (more

avors, more sizes, new products) thanks to an active strategy of surveying and seeking

for consumers" contribution and ideas. As stated before, their avors are original and the

recipes acclaimed for their simplicity, while the ingredients are easily identiable.

Place : Michel & Augustin!s distribution has known huge transformations since they started

to sell their petit sabl rond et bon. They did start to sell them in two convenience stores

in the 18th district of Paris then in bakeries and developed step by step a network of shops

selling their products. Then came Monoprix in 2006, only two years after the creation of

the company, which has been a real backer for being the rst supermarket chain to

distribute M&A!s products. The renewed strategy of Monoprix, based on an important

redenition of their promotion and communication strategies as well as a will to sell

premium products perfectly matched the young start-up!s need for a bigger distribution.

With this support, the number of distributors thrived as famous concept-stores such as

Colette or the high-prole La Grande picerie started to sell M&A!s products. Soon, they

would be distributed all over the French territory in big-box stores (from Auchan to

Carrefour trough Leclerc) and most of the hyper, supermarkets and urban department

stores). A small Michel et Augustin store has even been held In Montparnasse trains

station since late 2009, in order to expand the brand!s audience and get the products to

travel over from the city. The two peers obviously managed to achieve their goal which

was to get their products sold wherever the consumers were, today they are also

distributed in theatres, TGVs and even in planes.

Promotion : The rm uses rather unconventional ways to promote its products for a food

brand. Indeed, most of their promotion is made on internet (through their website and

social networks) or through special operations. Here are a few of their known coups : In

2006, they went to Danone!s Les Deux Vaches launch conference and gave away their

Vaches Boire to most part of the attendees, giving the product a visibilty amongst key

actors of the industry. The next year, during a conference at Le Salon des

Entrepreneurs at Paris! Palais des Congrs, they managed to put a Vache Boire on

Bill Gates! desk and got him to drink some of it - Capital a French business magazine

claimed in their Mars 2008 issue that the impact that this operation had would have cost

the company over 100k# of advertising spaces on regular medias. They have also

organized give-away operations at Place de la Madeleine and disguised in cows at La

Motte-Picquet!s subway station. These kinds of moves alongside their products and their

packaging got them to a certain level of brand familiarity over consumers.

However, one of their main challenges to come will be to achieve doing more conventional

promotion while maintening their global strategy of friendly and consumer-oriented brand.

Prices : prices of M&A products are quite high as the rm targets consumers who are

willing to pay more for a qualitative product. On such a submarket niche, prices are a main

part of the marketing strategy, offering low prices could mean that the products are not

made of great ingredients and therefore that the marketing strategy is not honest. As a

matter of fact, a bottle containing 850ml of Yoplait!s Yop is sold for 2.09# on

auchandirect.fr whereas Michel & Augustin!s Vache Boire costs 2.69# for 500ml.

4. The SWOT analysis

Strenghts : great differenciation through products and packagings, great variety of

distributors, proximity to consumers, solid capacities of innovation, high growth rate,

implication in the corporate social responsability with their Cow Association which

supports other associations such as Boue d!Espoir .

Weaknesses : Expanding and developing internationaly could provoke a loss of the

brand!s identity as it has this image of a friendly brand mostly because it seems to be an

accessible start-up ; lack of conventional marketing campaings could be a problem as a

strategy based on buzz may have unexpected effects (one of their campaings included

a renewed packaging for the Vache Boire themed on the French presidential election

in 2012 (see picture below), it provoked tensions in supermarkets and the rm had to recall

those products) ; predominance of marketing over the others functions of the company

such as purchasing and logistics.

Opportunities : the trend that has beneted to the brand in France is developing as well in

most part of developed countries so there are great opportunities of growth worldwide for

the company ; Pinault!s investment through their holding is going to bring the company to

a whole new level.

Threats : development of private labels which imitate the strategy of successful brands ; at

long term, the trend M&A has based its strategy on could eventually fade ; prominence of

multinational corporations ; uctuation of raw materials prices.

Bibliography

La consommation des mnages depuis 50 ans ( INSEE) // http://www.insee.fr/fr/ffc/

docs_ffc/ref/CONSO09c.PDF

Analyse sectorielle : agro-alimentaire ( Memopage) // http://www.memopage.com/

bourse/QZP87KW5/PRINTM131.pdf

Michel et Augustin!s website // http://www.micheletaugustin.com/indexash.htm

Michel et Augustin, yahourts et gateaux parfum culot ( Libration.fr ) // http://

www.liberation.fr/economie/2006/09/23/michel-et-augustin-yaourts-et-gateaux-parfum-

culot_52218

Michel et Augustin, le bonheur est dans la communication (Libration.fr ) // http://

www.liberation.fr/evenements-libe/2013/04/02/michel-et-augustin-le-bonheur-est-dans-la-

communication_893160

Michel et augustin passe la vitesse suprieure avec la famille Pinault ( e-marketing) //

http://www.e-marketing.fr/Thematique/Strategies-1001/Alimentaire-Boisson-10004/Breves/

Michel-Augustin-passe-a-la-vitesse-superieure-avec-la-famille-Pinault-53559.htm

La famille Pinault prend le contrle de Michel & Augustin ( LeFigaro.fr) // http://

www.legaro.fr/societes/2013/07/08/20005-20130708ARTFIG00368-la-famille-pinault-

prend-le-controle-de-michel-et-augustin.php

Packaging participatif chez Michel & Augustin ( e-marketing) // http://www.e-marketing.fr/

Thematique/Tendances-1000/Creation-Design-10003/Breves/Packaging-participatif-chez-

Michel-et-Augustin-37116.htm

Michel et Augustin, les enfants terribles de la bonne bouffe ( Le Point.fr) // http://

www.lepoint.fr/dossiers/art-de-vivre/made-in-france/michel-et-augustin-les-enfants-

terribles-de-la-bonne-bouffe-27-07-2013-1708996_1608.php

Augustin Paluel-Marmont : Nous n!avons pas d!argent mais des ides (Le Journal du

Net) // http://www.journaldunet.com/management/dossiers/0711212-publicite-moindres-

couts/4.shtml

Augustin (Michel et Augustin) pour son agit-prop ( L!Express Entreprise) // http://

lentreprise.lexpress.fr/marketing-et-vente/augustin-michel-augustin-pour-son-agit-

prop_30481.html?xtmc=michel_augustin&xtcr=6

Michel et Augustin ( lsa-conso) // http://www.lsa-conso.fr/michel-augustin,137242

Michel et Augustin, le secret enn rvl (JeanJacquesUrvoy.com) // http://

www.jeanjacquesurvoy.com/histoires-humaines/michel-et-augustin-le-secret-enn-revele/

Un packaging Michel & Augustin en 5 tapes ( Lasimpleagence.com) // http://

www.lasimpleagence.com/packaging/packaging/

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