Kraft Analysis

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Introduction to Marketing
COMM 5307

Kraft: The Coffee Pod Launch

January 29th, 2013

Laurentian University

Table of Contents

1. Introduction------------------------------------------------------------------------------------------------2 2. Situational analysis---------------------------------------------------------------------------------------3 3. Alternatives------------------------------------------------------------------------------------------------8 4. Recommendation-----------------------------------------------------------------------------------------10 5. Conclusion------------------------------------------------------------------------------------------------13

1. Introduction
1) Problem Statement
The Product Manager of Kraft Foods Canada (Kraft) needs to decide whether to: * Simultaneously launch coffee pods with the US market, or * Wait for the results of the US launch.
2) Problem Statement Considerations
* Launching simultaneously would allow craft to capture and defend market share against P&G with their Folgers’s brand. Risk: Folgers will dominate a strong position in the coffee pod market if Kraft decided to wait to analyze U.S. results. * Risk may be minimized by waiting for U.S. results in order to better target consumers. 3) Decisions to be made

* Develop suitable brand strategy for both Maxwell House & Nebob. * Set a wholesale & retail price for the coffee pods
* Choose which flavours to offer
* Decide between traditional distribution channels or direct-to-store delivery (DSD) * Develop an effective advertising & promotion strategy 4) Decision Criteria
An effective marketing strategy/plan is dependent on fulfilling the following objectives: 1 Expand market share of Canadian Coffee Market.
2 Generate satisfactory return on marketing investment ($1 million budget). 5) Specific Goals
1 Achieve the required target of 80% of SSP machine owners to try the product and 60% to repurchase it. 6) Budget & Contraints
* An annual budget of $1 million.
* Breakeven on marketing investment: 2 years (2006).
7) Company Introduction
Kraft Foods is the world's second largest and North America’s largest food & beverage company with revenues of $54.4 billion. Incorporated in 2000 in the Commonwealth of Virginia, Kraft manufactures and markets along 5 product categories: 1. Beverages, 2. Convenience Meals, 3. Cheese, 4. Grocery and 5. Snacks. Kraft has a well-earned reputation for developing innovative, new products and food applications. It sells its products in approximately 170 countries, and operates in more than 80 countries (Annual Report 2011). In Canada, Kraft’s Maxwell House and Nabob brands enjoyed a combined 32 % share of the total ground and whole bean coffee market. 8) Kraft’s Mission Statement

To achieve leadership in the markets it serves by fostering innovation, achieving high product quality and keeping close eye on profit margins. 9) Five Operational Objectives to Achieve these Goals:

* Build superior brand value for customers.
* Enhance product demand among consumers.
* Constantly adjust the product portfolio to align with customer trends. * Expand global scale by increasing business internationally. * Build a learner cost structure through better use of assets.

2. Situational Analysis
1) General Market Analysis
Kraft has a strong foothold in the existing market: 15% Market Share of Global Coffee Market, and 32% Market Share of Canadian Coffee Market. The remaining market is composed of Nestle with 17% market share, P&G with 9% market share, private label brands with 23% market share, and smaller companies holding 19% market share. Given its strong presence & distribution within the market, Kraft is well positioned to fulfill its objective of expanding its...
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