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Keller Graduate School of Management

3/27/2016

Introduction

The brand that has been selected for this study is known as Ultimo organic coffee. It is a brand which is different from the normal coffee in that it has been grown, produced, processed and packed without the use of preservatives and pesticides. Since this coffee brand has been grown under conditions which are natural and harvested and processed in its natural state, it can be referred as natural coffee. This coffee brand is seeking to eliminate the belief that all coffee products are produced using chemicals. Some of these chemicals used are the fertilizers during growth, pesticides to prevent diseases and preservatives to extend the expiry date. These chemicals are considered to be very harmful to the health of the consumers. The selected brand will not include preservatives and additives and thus it will natural although it will be bitter compared to other brands which use additives to sweeten the coffee.

Trends in the coffee industry

The coffee industry has experienced dynamic growth in the recent years. This is because the market share of the sustainable coffee in every European coffee market has grown from 0.3 to 3.4 percent. The 2002 preliminary data shows that the coffee market share has grown in most countries. The market share for the processed coffee has also grown a very high rate with star buck corporation leading in the market. Organic foods have achieved increased popularity globally with half of the sales occurring in the European countries. The organic coffee is likely to have greater benefits (Giovannucci, 2003).

Competition in the coffee industry

The coffee industry is experiencing faster growth with the key competitors being the Starbucks hotel, McDonald’s and Dunkin’ Donuts who has positioned themselves as the coffee as fuel. Entering in this market which is dominated by big companies like these ones will require a strong strategy. With the increase in coffee consumption in these hotels, it means therefore that there is increased demand for this product and therefore increased sales thus leading to increased revenue. Market for coffee products is available in major towns in European countries therefore it is an industry worth investing in (Agro Eco consulting, 2001).

Market Objectives

Since it is a new product, the main objective for this company is to increase the product sales from 0 to 20 percent by the end of august 2016. The other marketing objective will be to gain a market share of 20 percent by the end of July 2016.

The communication objectives include increasing the percentage of the target market of all the children and adults residing in Chicago environ especially the college students and the working population from 0 to 40 per cent. This will include the neighboring states who believe that natural foods for better health (All Japan Coffee Association, 2001).

Market analysis

SWOT analysis

The ultimo organic coffee is a new product in the market. Most of the competitors in the coffee industry major in the production of inorganic coffee. Therefore, the only competition is between the organic and inorganic coffee products. Most people around Europe use inorganic coffee on daily basis. Therefore, the company will have to educate the people about the effects of the inorganic coffee which contains chemicals and the importance of organic coffee which does not have chemicals such as preservatives and additives.

Strengths-The Company’s key strength is the production of organic coffee which has no chemical thus no side effects on the health of the consumers. Another key strength is that the company will be having no competition for the organic coffee since it is the only producer of this coffee. The company will also embark on a process of educating the people about the benefit of using coffee in its natural state. The processing of organic coffee does not require the presence of specialized professionals and sophisticated processing machines so the cost of production will be low.

Weaknesses- The ultimo organic coffee is a natural coffee thus it is bitter compared to the inorganic coffee which has additives which makes it sweet.

Opportunities- with the increase in the growth of organic coffee in most countries, there will be more supply of the product thus prices will be low. Many people are in need of products which will have less effect on their bodies thus they will prefer natural products which have less or no harmful chemicals. This means that the product will have more consumers and the revenue will be very high leading to high profits. The government is also encouraging the production of organic coffee thus no restrictions which may hinder the growth of the product.

Threats- the threats which exist for the coffee industry are the challenges in the global market which may affect the price of the raw materials. The oil and petroleum industry is also experiencing challenges globally and this may affect the cost of production. Another threat is the increase in the cost of labor due do workers demanding better wages.

Segmentation and targeting

The market for the ultimo organic coffee will be segmented among all the geographical markets. The company is targeting women aged between 25-45 and young children in college aged between 18-25 years. The target market does not necessarily have to be financially stable since the product will be cheap compared to inorganic coffee.

Positioning

The company will position its ultimo organic coffee as a product which is natural and has no effects on the health of the consumers. The product will target that group of consumers who believe in “natural products for health body”.

The ultimo organic coffee product is a coffee which has been produced naturally without the use of chemicals such as pesticides and fertilizers. The product does not have preservative and additives so it consumed at its natural state. The main of this product is to solve the problem of side effects associated with the consumption of harmful chemicals which are used in the production of inorganic coffee as well as its preservation. The product tries to eliminate such side effects by encouraging consumption of coffee at its natural state.

Marketing channels

In order to be able to reach many customers, the company open retail shops around the major towns which will target the customers who wish to buy take way coffee. It will also collaborate with major hotels which offer coffee products so that it creates awareness on the availability of natural coffee. The company will use agents in other countries to help distribute its product to the other parts of the world.

Communication strategy plan

The main objective of the communication media will be to send the message about the availability of natural coffee. The idea will be to reach many people and try to persuade them to start using natural coffee which has no effects on the human health.

The media to be used to reach out to the potential consumers will be the TV media, the social media like Facebook and print media such as health magazines. The aim is to educate the consumers on the benefits of the natural coffee as compared to inorganic coffee.

Budget and evaluation

The cost of advertising a product on a television media is 20 dollars per minute. The advert will run for 5 minutes per TV commercial break. In a day the advertisement will run for a period of 1hour in a day which translates to 1200 US dollars in a day. The advertisement will be running for a period of one month and it will be done for three months in a year. This translates to 108000 US dollars in a year.

Sales promotion

The company will undertake sales promotion through the use of coupons, gifts upon purchase of the products. It will also organize promotional roadshows which will help create awareness among different people in different locations.

Public relations

The company will organize and sponsor different events such as sports in order to improve on the media relation.

Conclusion

Inorganic coffee has the major product which has been consumed in the various coffee markets in the whole of US therefore, introduction of organic coffee in the market will be a major relieve for those individuals who like coffee but fear the effects it has on their health. The organic coffee will help solve this problem since it will be produced naturally and no preservatives will be used to preserve the product. There have been dynamic changes in the coffee production industry with many countries opting to produce organic coffee and the government encouraging the adoption of organic coffee due to its benefits.

The coffee industry is currently experiencing growth and therefore the introduction of the organic coffee will be a major boost to the individuals who like coffee. Ultimo organic coffee company will be seeking to capture 20 percent of the market share by the end of august 2016. This will result in increased sales and thus high revenue for the company.

References

Agro Eco consulting. (2001). Organic coffee and cocoa – a market survey. Netherlands: Agro Eco consulting.

All Japan Coffee Association. (2001). Basic survey about the demand trend of coffee. Tokyo: AJCA.

Giovannucci, D. (2003). The State of Sustainable Coffee. Philadelphia: PRINTING FERIVA S.A.