Post on 22-Aug-2014
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Competitive strategies for coffee brands
Maria KharitonenkoAnna Gulyaeva, 2014
IntroductionIn our presentation we analyzed
Russian coffee market and its main producers and identified their competitive strategies
While eating
42
15
12
8
8
55 4 2 Wake up
Relax
Calm down
Have a break
Treat oneself
Improve state of health When thirsty
Needs for coffee
Get prepared
Has low Coffee
education: In most cases choice is made based on the
awareness of the Brand.
Use several Brands
simultaneously
for themselves and for the
guests
Wising Up: Smart shopping
for value for money solutions:
discounts, doy packs, cheap FD, economy packs.
Are not Coffee lovers: Functional
consumption with key need to wake up, keep
going, energetic…
Main Peculiarities of Coffee Consumption in Russia
Source: Coffee Culture U&A Study , IPSOS, 2012
Coffee Market in RussiaSoluble coffee 2013
-2%
Spray-dried(22%)-13% Mixed(29%)
-4%
AC Nielsen, Sales volume dynamics vs YTD 2012
Premium (27%)+11%
Super premium (2%)-3%
Economy(19%)-2%
Freeze-dried (49%)+5%
Sales of coffee brands
AC Nielsen Market value share
Generic Strategies matrix
Overall Cost Leadership
Differentiation
Cost Focus
Differentiation Focus
‘Stuck in the middle'
Competitive advantage
Low Cost High Cost
Com
petit
ive
Scop
e
Narro
w Br
oad
Coffee Market in Russia
AC Nielsen, Sales volume dynamics vs YTD 2012
We consider instant coffee brands on Russian market and place them onto the Generic Strategies matrix :1. jacobs monarch2. nescafe3. tchibo4. carte noire5. jokey6. jardin7. chernaya karta8. maxwell house9. ambassador10.moskovskaya kofeinya na payakh 11.milagro12.moccona
Porter’s model
JockeyCafé Pele
Maxwell House
Nescafe GoldJacobsTchiboJardin
Red Price
Carte NoireDavidoff
Ambassador
Chernaya Karta
Competitive advantage
Low Cost High Cost
Com
petit
ive
Scop
e
Narro
w Br
oad
Possible Market Structure
Market Leader40%
Market Challenger 30%
Market Follower 20%
Market Nicher 10%
Possible Market Structure
market leader 40% Nescafe
market challenger 21% Jacobs
market challenger 19% Tchibo
market nicher 10% Carte Noire Davidoff
market followers all other brands <10%
Brand NescafeMost famous on the market, With largest history!Quality, proved with timeRemarkable und unchangeable designMemorable advertising
But Nescafe Classic used to be the historical leader but it started losing its leadership in 2013 because of aggressive competition.
Market Leader
Expanding Total
MarketDefensive Strategy
A market leader can provide different strategies
NESCAFE Classic Relaunch
Giraffe project implementationRevolution! New NESCAFE Classic!
• Delicious taste
• highest quality coffee beans
• Win in blind consumer test
60/40 against Jacobs Monarch!
Renewed recipe
• Form positive image
• New modern design for which customers are ready to pay little bit more
Ultramodern design
• New TV commercial
• Internet
• Degustation
Promotional activities
STRATEGIC RELAUNCH OF THE BRAND – PRIORITY OF 2014 YEAR
start of sales: April 2014 года
THE NEW VISUAL IDENTITY SYSTEM
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THE NESCAFÉ ACCENT IS OUR
SPARK OF INSPIRATION
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A STRONG, VERSATILE
GRAPHICDEVICE
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MAKES EVERYDAY IMAGES AND PHRASES PROPRIETARY
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VISUALAND PROVIDES
TO ALL OUR BRANDED MATERIALS
INTEREST
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21
22
REMAINS
NESCAFÉ MUGTHE
TIMELESSICON
OUR
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A RECOGNISABLE SIGNATURE
BRINGSPLAYFULNESSANDUNEXPECTEDNESSTO THE BRAND’S PERSONALITY
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27
FOCAL
THE
HUB IS A
POINTFOR
COFFEE
NESCAFÉ
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ANDHUMANCONNECTIONS
FROM
PRODUCTGREATINTRINSICS
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TO
PRODUCTGREATEXPERIENCE
30
TO
BRANDGREATEXPERIENCE
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32 32
3333
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THE RESULT IS A FLEXIBLE BUT CONSISTENT BRAND STYLE
3636
IT ALL STARTS WITH A
Mission Build an association around Nescafe Classic with the ideal morning coffee and underline the high taste characteristics of the product. Solution On a dark winter’s morning, when a new day was dawning, consumers on their way to work were greeted by a mobile Nescafe café with LED flames cosily lighting up the dark streets. Everyone was offered a cup of aromatic, hot Nescafe Classic to warm their walk to work with a ‘Good Morning’ wish. Happy end 13 cities, 6 weeks, 463 873 tastings on the streets and in trade centres
Nescafe Classic “hot tastings”
The Five Competitive Forces
Competitive
advantagePower of buyers
Power of supplier
s
Threat of substitutes Threat
of new entrant
s
Rivalry
In order to resist to five competitive factors a company need to build strong long-term relationship with its stakeholder
keep price competitivebrand loyalty to keep customers
from rivals
The Five Competitive Forces
key emotional benchmarks
•family warmth and friendship
Jacobs
•professionalism, aromaTchibo
•fashion, premium level, luxuryCarte Noire
Warmth of communication with jacobs monarch
from 8 January to 27 february 2011, russiacreative BTL activity realized on ice rink
goal:create strong emotional link between consumers and core ideas of brand, jacobs monarch, “family warmth and friendship”
9 cities, ice rinks
next to ice rink there was green branded tent where people could get warm and enjoy drinking coffee jacobs monarch with their family and friends, and even sing karaoke!
for karaoke singing everyone could get one of the following prizes: knitted gloves, scarf or sample of coffee 47,5g and chance to win tickets on ice showentertainment team played with people on ice rink also there was a big installation of steaming coffeecup.
results:121 000 degustations22 573 people with gifts
tchibo support of the museum night in the biggest russian cities with the “poetic museum” activation
to communicate that tchibo is more than just coffee, but an art of creating it (careful beans choice, tasting and packaging), the brand decided to organize poetical readings by famous russian actors in big museums and during the popular night, gathering big audience. julia menshova, viktoria tolstoganova, alisa grebenjikova and other popular actors read their favourite poems in special tchibo zones.
samplingcoffee zones where baristas brewed coffee for visitors.
results over 500 000 participants at 5 towns approx. 7 000 000 RUR
tchibo: museum night2012, big russian cities
carte noire: ural fashion week sponsorship2008, ekaterinburg
carte noire sponsored big fashion even to promote thir brand and to reveal its core idea – fashion and luxery
26-30 november ekaterinburg hosts ural fashion week every year to show the season fashion for spirg/summer.
people could digustate coffee carte noire and to evaluate its taste.
it was successful tool for promotion and attaching the idea of luxury to brand among consumers
ConclusionTo create a competitive advantage
businesses should review their strengths and pick the most appropriate strategy cost leadership, differentiation or focus.
thank you for your attention!