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

2. Current Situation Oversupply of coffee caused prices to drop 35%
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
Current Situation
Oversupply of coffee caused prices to drop 35%
Need to increase sales volume while using a lower advertising budget

3. Decision in Brief $15 million advertising budget
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
Decision in Brief
$15 million advertising budget
Target European consumers
Form strategic alliances with well known restaurants
Use emotional ads to position Café de Colombia’s company and product quality

4. Coffee Market Trends Coffee is consumed 66% of the time in the morning
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. 3 Intangible Assets we’ve acquired over the years
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 we’ve acquired over the years
Juan Valdez
100% Café de Colombia Logo
Café de Colombia “Country of Origin
Descriptor”

9. Brand Recognition Best Coffee Producer Rating 85% Logo Association
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. Best Coffee Producer Rating
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. Percentage of Logo Recognition
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. Increase of Juan Valdez Awareness
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 % 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. European Market Opportunity
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 world’s coffee
Europe coffee consumption makes up % of Columbia’s exports
Café de Colombia currently spends 17% of its advertising budget in Europe

15. Target European Consumers
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)
-Europeans have a more established taste for quality coffee
-The previous method of leaving general advertising to Roasters did not position the product the way we want. Based on US experiences.

16. Target European Consumers
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
We will give promotional signs to cafes

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
High quality donuts teamed with high quality coffee
Incentive based contract between: Krispy Kreme, Folger’s, and Café de Colombia growers
Sell 100% Colombian Coffee with Krispy Kreme
Introduce seasonal recipes using Café de Colombia
Target Markets

19. 100% Iced Colombian Coffee
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. Traditional coffee consumers want high quality coffee
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. Emotional Advertising
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”
-The nature of our company is nationalistic and community based. We want to publicize this existing image advantage!
-Consumers should view the “Fair Trade” logo the same way as dolphin safe: worth extra cost
-What are we assuming about consumers? We are thinking that consumers of high quality coffee are interested in cultural knowledge- starbucks world music CDs

22. Emotional Advertising
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
-The nature of our company is nationalistic and community based. We want to publicize this existing image advantage!
-Consumers should view the “Fair Trade” logo the same way as dolphin safe: worth extra cost
-What are we assuming about consumers? We are thinking that consumers of high quality coffee are interested in cultural knowledge- starbucks world music CDs

23. Global Market Global Consumption = 105,932,000 bags
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
Colombia’s Global Market Share = 11.69%

24. European Market 40% of Colombia’s total exports
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 Colombia’s total exports
Export Volume = 3,752,955 bags
Market Share = 8.507%

25. US Market 60% of Colombia’s total exports Volume = 5,629,433 bags
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 Colombia’s total exports
Volume = 5,629,433 bags
Market Share = 30.10%

26. Break-Even Analysis 0.9653 price -0.8000 cost -0.0965 sales cost (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
Break-Even Analysis
price cost sales cost (10%)
unit contribution ($ per lb)

27. Break-Even Analysis Fixed Cost $15 M = Unit Contribution 0.0688 =
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
$15 M =
Unit Contribution
0.0688 =
1,648,245 bags =
1.5% world market share

28. Expected Sales US volume exports increased by 10.53%.
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
Expected Sales
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%

29. Future Prospects Pre-packaged coffee or pre-packaged mixes
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