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Café de Colombia Nick Kordesch Christina Rosa Jennifer Su Rebecca Wang.

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Presentation on theme: "Café de Colombia Nick Kordesch Christina Rosa Jennifer Su Rebecca Wang."— Presentation transcript:

1 Café de Colombia Nick Kordesch Christina Rosa Jennifer Su Rebecca Wang

2 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Oversupply of coffee caused prices to drop 35% Current Situation Need to increase sales volume while using a lower advertising budget

3 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Target European consumers Decision in Brief Form strategic alliances with well known restaurants Use emotional ads to position Café de Colombias company and product quality $15 million advertising budget

4 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Coffee Market Trends Coffee is consumed 66% of the time in the morning In the 1980s Pepsi Generation, coffee was losing popularity Gourmet coffee consumption is increasing Traditional coffee consumption is decreasing Economy is in a downturn

5 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Market Expectations Younger people are expected to increase coffee consumption gourmet coffee drinking becomes hip 100% Colombian share in U.S. grocery segment is expected to increase

6 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Goals To produce high quality coffee at a competitive price to consumers

7 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Products Our Mild Washed Arabica Coffee is known for its low caffeine content and full bodied sharp taste Each bean is handpicked to ensure only high quality coffee is sold

8 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion 3 Intangible Assets weve acquired over the years Juan Valdez 100% Café de Colombia Logo Café de Colombia Country of Origin Descriptor

9 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Brand Recognition Best Coffee Producer Rating 85% Logo Association Juan Valdez awareness increases in USA

10 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Best Coffee Producer Rating

11 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Percentage of Logo Recognition

12 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Increase of Juan Valdez Awareness Increased 45% in 20 years

13 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Problem Analysis International market prices dropped 35% from Global coffee prices are expected to be only $.80 per lb but it costs $.80 per lb to grow high quality coffee Investment companies are beginning to support other countries

14 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion European Market Opportunity Europe consumes 42% of worlds coffee Europe coffee consumption makes up 40% of Columbias exports Café de Colombia currently spends 17% of its advertising budget in Europe

15 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Target European Consumers Previous strategy: advertise to roasting companies (Push) New strategy: Target end consumers (Pull) Recommendation: Increase advertising budget to $9 Million (60% of budget)

16 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Target European Consumers Tactics: Train posters, signs in cafes, magazines advertising quality We want consumers to look for the Colombian logo in cafes and link it with high quality

17 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Strategic Alliances Team up with a well known company to promote products for both parties

18 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Strategic Alliances Target Markets High quality donuts teamed with high quality coffee Sell 100% Colombian Coffee with Krispy Kreme Introduce seasonal recipes using Café de Colombia Incentive based contract between: Krispy Kreme, Folgers, and Café de Colombia growers

19 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Seasonal Recipes 100% Iced Colombian Coffee Coffee Velvet Drink

20 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Target Markets Young Adults: continuous growth of consumption of high quality coffee drinks by young female consumers Traditional coffee consumers want high quality coffee

21 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Emotional Advertising Café de Colombia benefits from a better Colombia Spend 6 Million on Emotional Ads Pamphlets Posters Café de Colombia supports Fair Trade

22 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Emotional Advertising

23 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Global Market Global Consumption = 105,932,000 bags Colombia Production = 12,385,605 bags Colombias Global Market Share = 11.69%

24 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion European Market 40% of Colombias total exports Export Volume = 3,752,955 bags Market Share = 8.507%

25 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion US Market 60% of Colombias total exports Volume = 5,629,433 bags Market Share = 30.10%

26 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Break-Even Analysis price cost sales cost (10%) unit contribution ($ per lb)

27 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Break-Even Analysis Fixed Cost Unit Contribution $15 M = 1,648,245 bags 1.5% world market share = =

28 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion From 1994 to 1995, we increased advertising by $2.47 mill in the US US volume exports increased by 10.53%. An increase of $9 mill in Europe will increase sales by 38.35% (assuming advertising in Europe is as effective as it is in the U.S.) Europe market share will become 11.77% Expected Sales

29 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Future Prospects Pre-packaged coffee or pre-packaged mixes Ready-to-drink bottled coffee Develop the website Improve internal road system to reduce production costs

30 DDB Introduction Current Situation Decision in Brief Coffee Market Trends Expectations Cafe de Colombia Goals Products Problem Analysis Recommendation European Market Strategic Alliances Emotional Ads Financial Analysis European Market U.S. Market Future Prospects Conclusion Conclusion Expanding into different age groups, cultural groups, and seasons based on current market trends Leave open future opportunities


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