The marketing strategy that should be used to target the Canadian market is to position the Kraft coffee pod products as a premium quality coffee product that provides its consumers with high quality taste, and related benefits. The pod based coffee products would be targeted towards the 25-54 year old population of Canada that would include singles, couples, families as well as office staff. This along with strong promotional activities and market awareness programs would help the Kraft foods attain a 35 percent majority of the market share in the Canadian market. Price
The price of the coffee pods has to be kept low enough to encourage the customers to purchase the products, while maintaining a high enough price to portray the positive premium coffee image for its Nabob and Maxwell House brands. Competitors have prices 16 pods for US$3. 99, pertaining to this a price of $3. 99 for 18 pods would be suitable as it would provide the company with the per cup profit of $0. 22. In order to protect the brand image of its coffee brands, Kraft should price its regular coffee pods at the price of $3. 99 while the speciality coffees and exotic flavours can be priced at a higher price of $4. 00-$4. 50.
In the wholesale market the company should seek to provide the Canadian wholesalers and retailers with a margin of 30 percent with special high rates of 35 percent in the initials period of the product launch. Product The Kraft food company should bring a diverse range of products for the pod based coffee line into the Canadian coffee market. The reason for this is that by providing the increased range of coffees in the pod form the company would be able to dominate the market with create awareness for the new type of coffee as well.
Competition in the market is intense for coffee pod based coffee and the provision of a wide selection of coffees in the pod form can provide the company with the much needed differentiation. The Kraft Food Company should launch a diverse flavoured range as well as caffeinated and decaffeinated versions of its Nabob and Maxwell house brand in the pod format. Distribution Kraft Company should aim at implementing a scaleable format of the direct to store delivery program whereby the company itself would be responsible for providing the individual store with the new product and merchandise.
This option gives the company of controlling the supply chain for the pod coffee as well as maintaining store based display and point of sale marketing in a more appropriate manner resulting in a savings of $150,000 in supply chain expenses. While the drawback of this operation is that with the incremental demand and sales of the pod coffee products, Kraft can find it difficult to manage delivery of the merchandise to the individual stores with limited resources. However the advancement in technology can aid the company by providing a JIT system that can make the supply chain management more efficient through integrative technology.
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