Kraft Foods: the Coffee Pod Launch (a)
Geoff Herzog was product manager of coffee development department of Kraft Foods Canada. Kraft Foods North America was planning a launch of coffee pods in the United States. Herzog’s primary business was to come up with a market strategy for single serve coffee pod systems in Canada. The main problem he was facing was to decide whether he should proceed with immediate simultaneously launch in Canada as in USA or wait for USA results to determine market strategy. If Herzog went ahead with immediate launch, he would have to face lots of issues to make decisions.
Such as: -He would need a branding strategy: Kraft food owned two major coffee brands in Canada, Maxwell and Nabob. He would have to come up with a suitable branding strategy for these two coffee brands. -Pricing: He would have to decide wholesale and retail pricing of the new product. -Variety of flavors: He would have to decide variety of the flavors. Which flavors he would offer to his Canadian consumers. -Distribution Channels: He would have chose which distribution channel to use, traditional distribution channels or direct to store delivery. Limited budget: He would have to develop an effective advertising and promotion strategy within the budget. Kraft Food overall goal was to achieve leadership in markets it served, which it persuaded by fostering innovation, achieving high product quality and keeping a close eye on profit margins. Five operational objectives had been established to achieve these goals: -Build superior brand value for consumers by delivering greater product benefits at the right price, compared to the competition. Enhance product demand among consumers by building relationships with trade partners. -Constantly adjust the product portfolio to align with consumer trends, especially in fast growing channels and demographic groups. -Expand global scale by increasing business internationally, especially in world’s fastest growing developing countries. -Build a leaner cost structure through better use of assets to generate savings for reinvestment in brand building.