With 15% of the entire global market, Kraft Foods was the world leader in coffee sales. In Canada, Kraft owned coffee companies Maxwell House and Nabob own thirty two percent of the market share, and with the success of the single-serve coffee pod (SSP) in Europe lead Kraft Foods in the United States to plan for a launch. Starbucks and Tim Hortons had just entered the market, selling their brands of coffee in grocery stores and in their own stores. Customers buying coffee from these restaurants took away a large chuck from grocery sales, which indicated that consumers were willing to pay a premium cost for the convenience, customization and variety of coffee that these shops offered. The central issue that Kraft Foods Canada faces is the decision …show more content…
The market for the Kraft coffee pods is after is very narrow, only targeting upper class, educated, coffee loving Canadians, which can be a huge turnoff for new potential buyers interested in the product. With Kraft introducing the Kraft SSP to the market, I believe they would need a large budget to fund the advertisements to raise awareness of the product. However, they were limited to an annual budget one million dollars if they decided to proceed with the launch, which would be extremely difficult to pull …show more content…
This conservative alternative will minimize their risks in the market and allow for further observations of customer behaviors. They also gain the opportunity to develop a marketing strategy targeted specifically for consumers who have traits similar to that of American coffee consumers. A second option for Kraft is to launch SSP in Canada during the time in which America will launch theirs in an attempt to grab market share prior to their competitors entering the market. Kraft should market to a broader audience to attract more consumers to their products. Strategically, Kraft should launch Maxwell House in more mainstream markets and Nabob in premium brand market due to their brand positioning I recommend Kraft simultaneously launch SSP in Canada and the United States. If they wait to see how the American market responds to the SSP, a competitor might take the Canadian market. By building awareness of their product before their competitors, they have caught the attention of their loyal customers and locked them into buying their new product. This also gives them the chance to aggressively market to a broader consumer base. Once awareness is built in the market, Kraft will eventually then take control of the market. This would be a great opportunity for Kraft to gain a competitive advantage in the coffee market. The only issue I think Kraft would run into by choosing the second alternative