Coffee Mate Case Study

Topics: Coffee, Milk, Touring car racing Pages: 7 (2173 words) Published: November 13, 2010
1. What are the main benefits of Coffee-Mate and what is limiting its sales?

First of all, Coffee-Mate´s main benefit is its ability to replace cream or real milk. Furthermore, it can be stored for a much longer time than milk or cream making it a good substitute. People who cannot drink coffee without milk don’t need to carry around or look for milk since coffee mate will do the same job. In addition it is made of health promoting ingredients such as dried glucose and vegetable fat. However it cannot be legally defined as non-diary since it also contains milk derivatives. This can be considered a benefit to Coffee-Mate when it comes to customers who like the flavour and thus also makes them use less sugar for sure. Another competitive advantage and benefits to customers of Coffee-Mate would be its offer of various package sizes. On the other hand, limited sales are due to them targeting a market which is characterized by its low interest in the product, since most buyers do not see it as a weekly shopping item. Furthermore another factor that affects the sales is that the consumers prefer ordinary milk or cream instead of powder milk. Coffee-mate contains many chemicals in order to imitate the function of milk and to extend its shelf life. Therefore the fact that it is not a natural product affects customers choice when it comes to healthy issues. Furthermore its artificial taste may be unappealing to some customers. Hence, it is potentially used as a whitener in tea or coffee only in emergency situations in which the household has run out or run low on supplies of milk.

2. Should Coffee-Mate be mass marketed, aimed at one segment or aimed at multiple segments?

Mass marketing consists of trying to serve the whole market with the same product. In fact, for most of the 1900s most important consumer products companies held to mass marketing-mass producing, mass distributing, and mass promoting the same product in the same way to all consumers. An exemplary case would be Coca Cola producing one drink with the objective that it would appeal to everyone. However, the market for powdered milk is segmented and thus meaning it cannot be mass marketed. One single product cannot satisfy all segments because each one demands a certain need. If they were only to aim at one segment they would only cover with standard 41 % of the total 55 % that Coffee-Mate currently possesses and would loose the 14.5 % obtained from Lite. In conclusion, it is essential to proceed with several segments. In order to gain a bigger market share Coffee-Mate should improve its efficiency. On the other hand they can also identify new segments which are worth targeting.

3. Evaluate the segments from TGI’s user survey for target attractiveness and their fit to Coffee-Mate’s strengths. Which of the segments would you target and why?

Group 1: Sharon and Tracy – Experimentalists (Sample proportion: 15.4 %) -Enjoy spending money
-Status conscious
-Heavy users of instance coffee and cream
-Age 15-44 years
-High media awareness

Group 2: Eileen and Mary – Cost constrained, older, and conservative (Sample proportion: 23.6 %) -Very price aware, budget shopping
-Traditional in their habits
-Worry about their food
-Doesn’t eat fast food
-Like organic fruit and vegetables
-Environmentally friendly products
-Light users of instant coffee, never use cream
-High media awareness


Group 3: Sarah and Anna – Affluent, Young foodies (Sample proportion:24.4 %) -Love travelling and food
-Light users of all media
-Heavy users of coffee, above users of Coffee-Mate and they also use cream -Age 35-54 years, Young married
-Light media awareness
-High expenditure...
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