Kraft Coffee Pod Launch

Jungbin Kwon

Kraft Coffee Pod Launch

• Target market

• Coffee Lovers between the ages of 25 -54

• Well Educated    
• High average Income more than $ 91,000 (Average income in Canada around $55,000)
•  Having an interest in exercising, entertaining, gourmet cooking, household decorating, gardening, and taking exotic vacations
• Three quarter target market is married
• Lived in single detached homes in urban area in provinces of Ontario, Quebec, British Columbia, and Alberta.

• Consumers believe to see the real value in the convenience, choice and quality that single-serve pod machines provide.
• SSP machine owners valued the flexibility of using different coffee brands in their brewers. They are looking for fresh, hot cup of coffee with peak flavor and aroma.

• Product adoption

• Relative advantage

• SSP used pre-packaged single servings to make high-quality coffee in less than a minute.

• Compatibility

• Advantageous when a person wanted to make coffee in small batches, or cater to several different tastes at the same time.

• Complexity

• Uses “closed” systems which could only use a specific pod shape and size and only accepted coffee pods compatible with these systems.

• Trialability

• Goal was for 80% of SSP machine owners to try the product and for 60% of those to repeat purchase.

People who want to enjoy coffee at their house with same quality as café would buy the coffee pod.

• Positioning: make a coffee more than a coffee taste with family

• This positioning purpose to reach a high society who looking for the coffee taste and sensation rather than a price. The “family” word purpose to attractive a married people and to show the family atmosphere because more than 50% Canadians drink coffee at breakfast and in the morning when people gather with their family.
• The European launch of the Kraft SSP showed promising results that lead Kraft US to plan the launch of the SSP stateside. Kraft Canada must now decide whether or not to plan a launch that coincides with the US or to wait and see the results and conduct further analysis to determine the best approach.

• Product

• Variety of pod offerings would be critical for building market share and category growth. Invented re-sealable bag with zip closure to keep the product fresh.

• Price

• Production cost is $0.02 per pods
• Charged $3.99 per pack of 18 pods.

• Distribution:

• Direct to store delivery (DSD). DSD is a system that Kraft responsibility delivery to individual store. DSD cost is $ 150,000 lower than delivered to retailers via warehouse cost $200,000.
• This system cannot handle if the coffee pods sale increase significantly, because of the limited amount of truck and limited space in distribution center

• TV Sponsorship

• Kraft spends around $ 35,400 per weeks in Toronto, Vancouver and the province of Quebec for TV sponsorship for reach more than 364,000 viewers. TV sponsorship is important to do because through the television sponsorship will improve an image and positioning at customer mind. Kraft is using TV sponsorship for 3 and half month launching. The cost is around $ 465,900. Almost all promotion will be show in the morning, the time while Canadian drink coffee and gather with their family.

Decision

1. Wait to launch until results from US are received. This option will allow for further analysis of customer behaviors and demographics. Kraft Canada will then have the opportunity to develop a marketing campaign targeted specifically at the type of consumers who have similar traits as the customers in the US.

2. Launch SSP in Canada simultaneously with US for both Maxwell House and Nabob brands in an attempt to grab market share prior to other competitors entering the market. Utilize existing warehouse distribution channels to deliver goods to the retailers. Institute a broad spectrum marketing campaign to reach a broad audience