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Kraft Foods is the world leader in coffee sales with 15 percent of the global market. In Canada, Kraft¶s
Maxwell House line is the number one selling retail brand, and its Nabob line is the leader in Western Canada
and number two in the nation. The two brands capture 32% of market share and cover the mainstream and
premium coffee markets. Recent success of the single-serve coffee pod in Europe has lead Kraft US to plan for
a launch in less than a month. Kraft Canada now faces the decision of launching simultaneously with the US or
waiting to see the results. If a product launch is made, a suitable branding, price and distribution strategy will
also need to be determined.


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‘ North America¶s largest food and beverage company ‘ Narrow target market as defined by age and
and the number two player in the world income level
‘ rand portfolio among the strongest of the global ‘ Current customers only make up 1/3 of the target
consumer packaged goods players market age group
‘ Existing brands make up nearly 1/3 or the Canadian ‘ Current SSP on the market uses a closed system,
market further narrowing the market.
‘ Strong distribution network and a strong reputation for
developing new products
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‘ August launch would mean Kraft would be 2 in the ‘ Three other competitors entering market within
market the next 6 months
‘ [ower age target demographic could allow for greater ‘ ‰rocery stores which are a primary outlet for
market penetration Kraft will likely not see increases in sales until
‘ roint DSD program with Mr. Christie line can reduce the special coffee makers are in homes.
distribution costs ‘ [imited marketing opportunities prior to launch
of competitors¶ products




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The European launch of the Kraft SSP showed promising results that lead Kraft US to plan the launch of the
SSP stateside. Kraft Canada must now decide whether or not to plan a launch that coincides with the US or to
wait and see the results and conduct further analysis to determine the best approach.

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1. Wait to launch until results from US are received. This option will allow for further analysis of customer
behaviors and demographics. Kraft Canada will then have the opportunity to develop a marketing campaign
targeted specifically at the type of consumers who have similar traits as the customers in the US.
2. [aunch SSP in Canada simultaneously with US for both Maxwell House and Nabob brands in an attempt to
grab market share prior to other competitors entering the market. Utilize existing warehouse distribution
channels to deliver goods to the retailers. Institute a broad spectrum marketing campaign to reach a broad
audience.
3. [aunch now with a premium product from the Nabob brand and target higher income households located in
population rich provinces of Ontario, Quebec, ritish Columbia and Alberta. Partner with Mr. Christie line
to institute DSD distribution strategy to take full control of product placement in retail outlets.



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‰iven that Kraft currently has a large share of the Canadian coffee market, launching a pod system for the
Nabob brand simultaneously with the US [aunch is my recommendation. An early launch can help maintain
market share as well as gain penetration into segments of the market that are not currently part of Kraft¶s
primary customer base; mainly coffee drinkers under the age of 45. [aunching with only the premium brand at
this time will have more appear to the current SSP target market, primarily consisting of coffee lovers between
the age of 25 and 54, with an average annual income of $91,000. ased on this somewhat narrow market, and a
limited budget, I would recommend utilizing a combination of print advertising, trade show exhibits and in-
store merchandising to promote the product. ‰iven that the SSP is a relatively new product in Canada, trade
shows offer a great opportunity for customers to get a demonstration of how easy the product is to use as well as
sample the coffee. This can also facilitate the ultimate purchase of the product direct from the manufacture.
ecause of the timing of the trade shows as well as the expected launch dates of the competitors¶ products, Print
advertising could allow Kraft to reach customers before the launch of competitors¶ products. It will also allow
Kraft to specifically target high income, well educated individuals and households in both the English and
French speaking markets. In-store merchandising is another method to reach the target customers prior to the
competition launching their products, however to be successful, direct-to-store-delivery distribution strategy
would be the best suited method to employ. ‰aining control over the product displays and inventory rotation
would ensure that Kraft¶s product is being presented to the customer in the most opportune way as well as
ensuring freshness. ecause the grocery stores are not likely to see a lot of sales for the pods until the brewers
are in the customers¶ homes, targeting the displays to department and appliance stores would be the best fit at
first. An alternative to consider is TV sponsorship, particularly where the product is featured as a gift.
However the case did not provide any demographic information in regards to the viewers of the suggested
shows so further analysis would be necessary before moving in this direction

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1. How will Kraft manage distribution as customer base grows and demand finally reaches the grocery stores?
2. Should the Maxwell House brand be introduced and, if so, at what point?
3. Will the choice to enter a market with an open system prove to be a challenge if the Melitta closed system
has already saturated the market?
4. What impact will the open system design have on coffee sales as other brands enter the market?