Kraft Foods

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KRAFT FOODS

Prof. R. Mulholland
COMM 5306 Introduction to Marketing

2010
Chao Zhang (Richard)
Laurentian University
2010-12-1

TABLE OF CONTENTS

SECTION| CONTENTS| PAGE|
1| Executive Summary| 3|
2| Problem Statement| 4|
3| Situation Analysis| 4|
3.1| Objectives and Goals| 4|
3.2| Background| 4|
3.3| SWOT Analysis| 5|
3.4| Market Analysis| 8|
3.5| Financial Analysis| 15|
3.6| Keys| 18|
4| Alternatives and Analysis| 20|
5| Recommendations| 21|
6| Action Plan| 23|
7| Contingency| 24|

1. Executive Summary

Kraft (the company) did very so far in the foods and beverage market in Canada. The company was planning to launch the new coffee pods. However, the company was not very sure about the launching time point. Whether launching immediately after American launching plan or just waiting for the results of American market became decision-maker’s dilemma. The purpose of this report was to propose an appropriate recommendation to Kraft, assisting the company to achieve its objectives and goals both in short and long term.

After identification of problem of the Company, as well as goals and objectives in Section 2 and 3.1, situational analyses from different perspectives were performed. First, background of the Company, including product and up-to-date performance was introduced in Section 3.2. SWOT analysis, summarizing five key strengths, four key weaknesses (internal factors); seven opportunities and three threats (external factors) was presented in Section 3.3. After that, in Section 3.4, detailed market analysis, including market size and growth, market environment (both micro and macro environments), current and past marketing strategies, current marketing mix, consumer segments, market positions and competitions, was performed. This analysis provided a clear picture of the Company.

Detailed financial analysis was performed in Section 3.5. Through price setting, distribution costs, promotion costs and break even analysis, I listed the estimated sales volume and suggested retail selling prices of these two brands. In Section 3.6, key successful factors and key uncertainties were identified. In addition, related theory about distribution channels was introduced as theoretical support for criteria to select alternatives. Based on all the analyses in previous sections, eliminating all options which could not meet goals and objectives of the Company, two alternatives were available for selection. The first one was launching immediately with two different brands, and the second one was waiting for the results of American market. Pros and cons of each alternative were presented as well. In Section 5, recommendations, both in short term and long term, were made with concise reasons. Alternative of launching immediately was selected in short term according to several criteria. This alternative met target sales ($6.24 m for last four months of 2004, $18.2 in 2005, $20.8 in 2006, $23.4 in 2007). In addition, a step-by-step action plan was draft for the next three years in Section 6. If this action plan failed, a feasible contingent plan was proposed in Section 7, which was observing market first and then set some adjusted plan for next stage, like collaborating with one indirect competitors.

2. Problem Statement

For the purpose of expanding its share in Canadian coffee market, Kraft Foods Canada (Kraft) needed a new launch plan of coffee pods at the right time with an appropriate branding strategy and suitable distribution channels. As well as make decision about price and promotion.

3. Situation Analysis

3.1 Goals and objectives

Kraft’s goal was to expand its share of the Canadian coffee market, while generating a satisfactory return on the company’s marketing investment. In order to achieve these goals, Kraft should reach several specific objectives.

| 2004| 2005| 2006| 2007|
Market Share Objective| 35%| 40%| 45%|...
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