MARKETING

MANAGEMENT - 2

Group 6
Ankita Rajawat – 19069
Apoorva R – 19071
Ayesha Nehla – 19072
Mohith Kumar H N – 19073
Case - COFFEE Gokul Rov J – 19079
Harshith Y M - 19081
PRODUCTS SDN BHD
  Coffee Products Sdn Bhd got manufacturing
license on 24 February 1981, under the Industrial
Coordination Act 1975, to produce soluble
(instant) coffee powder

 Located in Johore Bahru, Malaysia

Company  Fully paid-up capital - $3.5 million with authorised

capital - $10 million
Overview
 Company was wholly owned by Malaysians

 COMPANY’S OBJECTIVE – To produce a

perfect substitute for local ground coffee, to give
the consumer an instant coffee which had the taste
and aroma of local ground coffee and yet easy to
prepare
  In 1985 a marketing group headed by Mr. Tony
Tan was assigned a task of developing the most
effective marketing strategy and a fully defined
national marketing plan for the new product

 Team came up with 3 potentially optimum

market positions for the new product:
Continued.. 1. Another instant coffee
2. Malaysia’s first instant coffee
3. Local ground coffee with the convenience of
instant coffee

 Vital consideration was the choice of a brand name

– Should it have a local or a foreign name?
  Choice of an appropriate brand name

 Selection of best Marketing Mix

 Advertising and Promotional

strategies and allocations

Decisions to be taken
  “BESKOPI” – A connotation easily
identified by all races in the
country, stemming from the words
‘best’ and ‘kopi’

 “COFFEE ROYALE” – For an

imported image
Brand name
suggestions  “GOLDCUP” – ‘Gold’ is
associated with quality by all the
major races in Malaysia
 Market Survey results
 Coffee was consumed at breakfast, after meals, during coffee breaks and with friends/guests
 Coffee was regarded as a ‘lift’ or ‘pick-me-up’ drink, was associated with stimulation as
well as relaxation and enjoyment
 Consumed mostly at home & taste and smell were perceived as key elements in good
coffee
 Generally regarded as unsuitable for children due to its caffeine content
 The difference between a good or bad cup coffee depended on using the correct proportions
of ingredients i.e. instant coffee powder, sugar, milk, water
 Instant coffee drinkers preferred instant coffee which was associated with convenience and
ease of use
 Ground coffee was seen as messy and troublesome
 Attractive packaging and promotion could induce trial purchasing and brand switching
 Knowledge of coffee manufacturing process, as well as awareness of coffee grades, beans,
blends and brands was limited
 Knowledge of advanced coffee making equipment was limited
  According to Coffee Products’ findings, the coffee
market in Malaysia was segmented into Instant coffee
and Ground coffee

 Instant Coffee Market:

 Accounted for $60 million which was about 30% of
the total coffee market i.e. $200 million (1985)
Market  Consisted of powdered, agglomerated and freeze-dried
coffee powder
Conditions
 All instant coffee available in Malaysia were imported

 Local ground coffee was consumed by most age groups

with no income group barrier

 Local roast and ground coffee market accounted for the

largest share of total coffee market which was
estimated to be worth $140 million 1985
 Competitors Analysis
 Nescafe Classic by Nestle:
• Had about 90% of the total instant
coffee market
• Market leader in the economy segment
• Launched Nescafe Shake
• Nestle provided advertising and
promotional support for its major
brands which were all market leaders
• Looking forward to convert local
coffee drinkers to instant coffee
consumers
• Product range – Gold Blend, Blend
37, Decaffeinated, Classic, Select
 Maxwell House Instant Coffee:
• MHIC holds 4% market share
• Sales were mainly attributed to 10-
ounce pack across the Thai border
• Drop in total sales after 1982, yet
domestic sales showed steady increase
• Only competitor to Nescafe, provided
its manufacturer, General Foods gave
advertising and promotional support
• Growth was mainly due to the
adoption a low price strategy like
Nescafe
 Continued..
 Moccona:
• Premium priced brand
• Market share – 3%
• Last entrant to Malaysian market
• Targeted towards upper middle
income consumers
• Distribution was heavily skewed
towards the urban centres
• Dented Nescafe’s formidable
market share
• Came in attractive containers which
could be used as storage jars
 Boncafe:
• Major brand in imported roast and
ground coffee
• Offers as many as 10 or more types
of blends
• Offered in pack sizes of 100 gm
each
• Price at $6.20 - $6.40 per pack
• Lacked good distribution network
Flow chart for
Instant Coffee
plant
 Product Attributes
• Product was 100% pure with no adulteration
• Coffee powder appeared in a fine powder form and brown in colour
• No thickness and oily appearance
• The aroma and taste was closer to instant coffee
• Taste of the product could be described as slightly burnt, harsh and bitter
but not sour
• Though the aroma was sweet and fragrant, it lacked the impact of the
freshly ground coffee
 FTB Approach

 Form
• Coffee making was regarded as skill
• Ground coffee was seen as messy and troublesome
• In order to reduce complexity, Instant coffee was introduced
• It is prepared by adding coffee powder to the hot water with milk
and sugar
 Technology
• Rotating drums – Roast green coffee beans
• Mechanical grinder – Grind coffee beans
• Sealed extractor columns – Brew coffee solution
• Spray Dryer – Dry the coffee solution

 Benefits
• Ease of use
• Reduction of time
• Similar taste
• Complete pureness
  Opportunity Identification
• Introduction of Instant Coffee
Powder

 Concept Generation
• To provide new instant coffee
powder or to provide convenience
for ground coffee

Product  Concept Evaluation

Development • By usage and attitude of consumers

Process  Development
• Manufacturing Process of Instant
Coffee
• Advertisement
Contents of PRODUCT PROTOCOL
 Target market: Consumers of local ground coffee & instant coffee
in Malaysia
 Product positioning:
• SSCB Lintas Worldwide’s strategy positioned the product in terms of
the features such as the aroma, taste and also the ease of preparation-
BESKOPI
• Adsell Advertising’s strategy positioned the coffee as ‘instant’ which
means convenience and ‘local coffee’ suggest the unique blend of
coffee in it-COFFEE ROYALE
• Ball Partnership’s strategy was to position the product as real good,
old & much loved taste of Malaysia-GOLDCUP
 Product attributes function, features:
• Product was 100% pure with no adulteration
• The product was in a fine powdered form and brown in colour
• The aroma and taste were closer to the instant coffee
 Product benefits: Ease of use and also acts as a substitute with a
blend of originality
 Competitive comparison: All the instant coffee manufacturing
companies such as Nescafe, MHIC, Moccona and local ground coffee
making companies in Malaysia
 Continued..
 Augmentation dimensions:
• The coffee was in a fine powdered form and was brown in colour
• Aroma was sweet and fragrant
 Marketing requirements:
• The instant local coffee of Malaysia
• The ease of preparation & satisfaction
 Financial requirements:
• Distribution network: For the establishment of extensive distribution network i.e., sole distributor of
coffee
• Promotion: Tan decided for introductory trade allowance & display offers such as, one additional
case for every 12 cases ordered
• Advertisement: The instant coffee industry occupied over 58%- TV, 29%- Press and the rest was in
radios & magazines
 Production requirements: The production of instant coffee requires cleaning, roasting, grinding,
extraction, concentration, spray-drying & packaging of the coffee beans
 Potholes: The prepared coffee was dark in color but lacked the appearance of the local ground
coffee. Though the aroma is sweet and fragrant, it lacked the impact of the local ground coffee
Implementation of Launch Plan-
Beachhead Stage
 Also known as pump priming
 Heavy expenditures to overcome initial sales inertia
Defensive Addition: Sdn Bhd needed to penetrate the instant
coffee industry and hence used-
 Smaller assortments such as the coffee being
unadulterated- 100% pure and having the taste and aroma
as that of the local ground coffee
 Sales promotions such as introductory trade allowances,
displaying offers and point-of-sale materials like shelf-
strips
 The launch tactics used by Sdn Bhd are-
• Promotions in terms of advertisements and even offers
• Tan wanted to establish a local trading house to act as the
sole distributor
 PRODUCT INNOVATION CHARTER
Background
• A Coffee Products company in Johore Bahru,
was wholly owned by Malaysians with fully
paid up capital of $3.5 million and authorized
capital of $10 million
• They got license for producing instant coffee
in 24 February 1981
• Total coffee market was $200 million out of
which instant coffee market was 30% i.e. $60
million with a rapid growth
• They acquired required machinery and
equipment to produce spray-dried instant
coffee from raw coffee beans
Focus
 Technological dimension:
• It uses Spray-drying method
• Selected blend of coffee beans is roasted in rotating drum
• Beans are then finely ground through a mechanical grinder
• A strong coffee solution is then brewed under high
pressure and temperature in a series of sealed extractor
columns
• The evaporated excess liquid is sprayed into a column of
hot air in a drying tower
• The coffee content falls to bottom line in a soluble powder
form
 Marketing Dimension:
• The company’s objective was to produce a perfect substitute
for local ground coffee
• They are focusing to give consumers an instant coffee with
the taste and aroma of local ground coffee yet easy to prepare
• Its targeting the both instant and ground coffee users
Goals and objectives Guidelines

• To produce a perfect substitute for local • The company follows aggressive

ground coffee promotion strategy as it is a late entry to

• Focus to give the consumers an instant the market which results in market

coffee with the taste and aroma of local growth

ground coffee • Intensive distribution channel in order to

• Making coffee easy to prepare reach wide range of customers

• Gaining market share • Creation of value to customers

• Making it a family product by making it
available to all age groups
 STP Analysis
SEGMENTATION:

• Instant coffee
Local Ground Coffee
• Ground coffee Imported Roast and Ground Coffee

This segmentation is based on,

• Income – Middleclass and Upper middleclass
• Age – Reach for all the age groups
 TARGETING:
• URBAN BASED MARKET: If the
flavor is acceptable, local coffee
drinkers would go for instant coffee
• RURAL BASED MARKET: Rural
consumers are resistant to come out
of local coffee. A few rural
consumers might try the coffee if the
price is reasonable
 POSITIONING:
• Optimum market positioning - Local
ground coffee with the convenience of
instant coffee
• Name - ‘BESKOPI’ as it is a name
identified by all races in the country,
which also means best coffee
• Value to the customer - Offering taste
and aroma of ground coffee at the
convenience of instant coffee
 Kapferer’s
Brand Identity
Prism
  The coffee should be made more thicker in
appearance
 The aroma and taste must be identical to the local
ground coffee
 Rapid Penetration Strategy: Under this strategy,
price of the product is initially set low to rapidly
Recommendations reach a wide fraction of the market and initiate
word of mouth
 Promotion Strategy: The T.V. ads must be mostly
emphasized on the consumers as it helps in brand
switching
 Product bundling
 Celebrity endorsement
  Brand creation
 Know taste and preferences of the customers
before launching
Value Creation
 Product differentiation
 Creating the customer value
 Finding the potential market within the
segment
THANK YOU!