Management innovation in the South African dairy industry

The case focuses on management innovation in the South African dairy industry, describing how an innovative new yoghurt product, Danimal, was created specifically for the market at the base of the pyramid. It explains how management of the product line embodied the various innovation opportunities and challenges presented.

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The concept was initially introduced in order to assess the feasibility of profitably servicing this market. However, the project was not simply about introducing a cheap brand to poor people but was more about creating brand awareness in the market at the base of the pyramid. It was an investment for the future.

The new product took into consideration the nutritional shortcomings in the diet of children in this market and also allowed for the lack of available infrastructure – electricity and refrigeration.

The case illustrates the importance of a product being affordable, relevant and available for this market. Innovation went further than product design and also took into account the necessity of a lean distribution channel. This took the form of micro-distributers, referred to as Danimamas, who comprised township residents, unemployed or part-time employed individuals.

The case offers insights into the complexity of doing business in developing countries. The company admits that it has not been a sustainable business model in terms of current profitability but the value that has been gained from social marketing and long-term brand development has been great.

The case concludes with the challenge of how to ensure that the project continues on its upward trajectory.

The objectives of the case are to encourage students to have a better understanding of the strategies required to successfully impact on low-income markets in developing countries, the different metrics that one could consider when assessing the impact of interventions on the base of the pyramid market, and the importance of harnessing opportunities and overcoming the challenges of management innovation.

Questions to answer:
How does the Danimal project shed light on and challenge the principals suggested to manage the base of the pyramid? How would you measure the success of the Danimal project?
How does the approach taken by Maria Pretorius in managing the Danimal product line factor in management innovation opportunities and challenges?

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