Substitutes

Coming back to substitutes, Philadelphia Cream Cheese with Milka Chocolate has four main groups of substitutes/indirect competitors:

1) Chocolate Spreads (Nutella, Nutti, Alenka, Kosoplapyi Mishka, Akademiya Schokolada)

The main difference with these brands is that Philadelphia has less calories and has no modified plant oil (can be assumed as healthier). Because cocoa beans are the most expensive ingredients in the package, the price of chocolate spread can be an indicator of the quality.

From the chocolate spreads the biggest threat imposes Ferrero's Nutella because of its a) quality b) strong brand image c) wider distribution network d) taste. From the weaker sides a) calories b) prices which results in irregular consumption (people do not buy it for everyday consumption)
The main difference with these brands is that Philadelphia has less calories and has no modified plant oil (can be assumed as healthier). Because cocoa beans are the most expensive ingredients in the package, the price of chocolate spread can be an indicator of the quality.

From the chocolate spreads the biggest threat imposes Ferrero's Nutella because of its a) quality b) strong brand image c) wider distribution network d) taste. From the weaker sides a) calories b) prices which results in irregular consumption (people do not buy it for everyday consumption)

Producers: Ferrero, Duo Penotti, LLC Image, LLC Red October, LLC Peterpak

2) Natural Ingerdients' Substitutest (Jams, Honey, Peanut Butter)

 

Here we can add the substitutes that contain more natural ingredients and, thus, perceived as healthier. In Russian market unlike US), peanut butter is quiet new and is not so popular because of its absence in most of the supermarkets. Moreover, Russians are not ready for its taste and mostly dislike it. Jams jars are also only gaining popularity in Russia because of the persistent habit of making them at home rather than buying. The perceived healthiness of jams is higher than for other products as a believe that jams are made only with fresh fruits. Honey can also pose a threat to Philadelphia because of its wide distribution network and perception of healthiness.

Producers: LLC Medproduct, LLC Veles, Den Gamble Fabrik, La Comptesse etc. (big number of producers)

3) Unflavored Cottage Cheese (Buko, Almette, Mascarpone, Ricotta)

 

Moreover, indirect competitors can be the producers of cottage cheeses like Arla’s Buko, Hochland’s Almette and Galbani’s Mascarpone. The first two products have lower prices, comparing to Menedelez’s Cream Cheese. The price factor plays a huge role in Russian market, where the average income is still lower than in Europe and just recently consumers started to buy foreign products. This was possible due to increase of income, availability to travel and of course the appearance of some products on the shelves of Russian supermarkets. The Galbani’s Mascarpone (main ingredient of tiramisu) competes with Mendelez’s Cream Cheese (main ingredient for cheesecake) for cooking purposes. Even though these two products mostly have different purposes, the popularity of cheesecakes and tiramisus bring a little tension. But the reason for Mascarpone’s low threat to Cream Cheese is that Mascarpone is very expensive, present in very few shops and can be used only for cooking purposes (it is not eaten with bread).

Producers: Arla, Hochland, Galbani

4) Chocolate Cheese (President Cheese, Karat,Trader Joe's Chocolate Cheddar)

 

Karat chocolate cheese has a lower price comparing to other chocolate spreads and cream cheeses (costs 60 rub per 150 g pack). However, it is not a strong advantage here. As mentioned earlier customers do care about the quality of the product and because chocolate cheese is a product, where price is an indicator of quality, consumers are skeptical about its low price.

President cheese is a stronger competitor of Philadelphia. President aims at another market (mass-market) with a price of 85 per pack. But if we compare the ingredients, Philadelphia still has lower amount of plant oil and more cheese. The President has bigger ratio of chocolate and its consistency is more liquid (hard to put on bread). Also some of the reviews noted an unpleasant smell.

Another substitutes are initially cheeses (not cottage or cream cheeses) which have chocolate. One of the combination is Cheddar Cheese with chocolate parts. The weak sides are a) low distribution network (only in Globus Gurme) b) high price (900 rub per 100 g) c) uncommon combination (Russian consumers are not ready for it yet).

Producers: President, Trader Joe's, LLC Karat, LLC Molochnyi Mir, LLC Kurskyi Cholodil'nik