mm2 Coffee Case

COFFEE PRODUCTS
INTRODUCTION
 Johore Bharu company wanted to launch instant coffee to Malaysian market
 The company’s objective was to provide perfect substitute for ground
coffee which has taste and aroma of local ground coffee
 In early 1985 marketing team was setup which was headed by Mr Tony Tan
 Team came up with 3 marketing position for their new product
 Another instant coffee
 Malaysia’s first instant coffee
 Local ground coffee with the convenience of instant coffee
 Different marketing approach has to be formulated for each

 Team has to make a decision on various aspects such as target market, pricing
strategy, advertising and promotion
 A project has taken 4 years to materialise so team has to take immediate decision on
market mix strategy
SURVEY OF MARKETING
TEAM
 Coffee was consumed at breakfast, after meal, during breaks and with
friends/guests
 Taste and aroma were perceived as key elements in good coffee
 Consumer regarded as unsuitable for child as it contained caffeine
 Good proportion of ingredients makes coffee tasty
 Awareness of coffee grades beans, blends and brands was limited
 Attractive packaging and promotion could induce customer to purchase the
product
OVERVIEW OF MALAYSIAN
COFFEE MARKET
It is segmented into two categories
1.INSTANT COFFEE
 Instant coffee market size $60 million which is 30% of total market share
 Market is growing due to aggressive advertising
 Those who were using grounded coffee was unwilling to switch to instant
coffee
2.GROUND COFFEE
 Consumer were of all age and income groups
 National brand were not established due to change in taste and
preferences, based on the regions
 50% of the grounded coffee consumed outside the home such as hotels,
coffee shops etc
 Ground coffee taste and aroma differs from region to region and also it
requires different method of preparation
COMPETITORS IN INSTANT COFFEE
NESTLE
 It holds 90% market share in instant coffee
 Nescafe products was not only distributed by nestle but also by private importers
who sold the products at lower price
 Infiltrated nescafe products were a major problem for nescafe
 Nescafe variety
a) Gold blend b) Blend 37 c) Decaffeinated d)Classic e) Select

MAXWELL HOUSE INSTANT COFFEE
 It had 4% market share, most sale are in 10 ounce packs
 Price is 10% below the nescafe
 It was the major competitor to the nescafe
PRODUCT INNOVATION CHARTER
Background Focus
 a Johore Bahru company, wholly- Technological dimension

 It uses Spray – drying method
owned Malaysian company with fully  roasing the best coffee beans in a rotating drum .
paid up capital of $3.5 million and  beans are ground finely through a mechanical
authorized capital of $10 million grinder
 A strong coffee solution is the brewed under high
 Coffee has a total market of 200
pressure and temperature is a series of sealed
million dollars in 1985, instant 30% extractor column.
ie, $60 million and it has a rapid  The evaporated excess liquid is sprayed into a
column of hot air in a drying tower
growth
 The coffee content falls to bottom line in a soluble
 On 1975 they got licence to produce powder form
soluble instant coffee powder, under Marketing dimentions
Industrial co-ordination act, 1975 for  The company’s objective was to produce a perfect
the same substitute for local ground coffee.

 They are focusing to give the consumer an instant
 They had Purchased machinery to coffee with the taste and aroma of local ground
coffee yet easy to prepare.
produce spray-dried instant coffee
 Its targeting the both instant and ground coffee
from raw coffee beans users.
Goal-objectives Guidelines
 To produce a perfect substitute  The company is a late entry to the
for local ground coffee market hence the company follows
aggressive promotion strategy
 Focusing to give the consumer
 In order to reach wide range of
an instant coffee with the taste
and aroma of local ground coffee costumer the company has to
follow Intensive distribution
 Making coffee easy to prepare channel
 Gaining market share( selective  Creation of Value
demand)
 Making it a family product
MARKETING MIX
PRODUCT
 Instant coffee with the aroma and taste of ground coffee
 Easy to prepare
 100% pure without any adulteration
PRICING
 Per each gram production of instant coffee the cost would come to 2.5 cent
 The estimated price of the coffee per gram is 2.9 cent
PLACE
 Launch will be done all over Malaysia
 Distribution: intensive distribution
PROMOTION
 Allowance given to traders
 Pull strategy-through television, press, radio and magazines
 Advertising: SSCB Lintas worldwide
STP
Segment
 The market is segmented into instant coffee and ground coffee
Based on income- middleclass, upper middleclass

Age- reaching all the age groups
Target
 The company is focussing on instant coffee users and largely on ground coffee consumers
Positioning
 Local ground coffee with convenience of instant coffee.
 Name- beskopi (name identified by all the races of the country) which means best coffee
 Value to the customer- offering taste and aroma of ground coffee at the convenience of
instant coffee.
LEARNINGS
 Finding the potential market within the segment.
 Know taste and preferences of the customer before launching.
 Creating the customer value.
 Product differentiation.
THANK YOU

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COFFEE PRODUCTS

 Different marketing approach has to be formulated for each

a) Gold blend b) Blend 37 c) Decaffeinated d)Classic e) Select

 a Johore Bahru company, wholly- Technological dimension

the same substitute for local ground coffee.

Based on income- middleclass, upper middleclass

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