Kraft Foods

1538 WordsMar 20, 20117 Pages
Introduction Expanding a product line into another country can be a very difficult decision. This decision is made harder by the establishment of competitors already in the market place and without proper market testing being done. Ultimately a decision must be made whether to pursue an unfamiliar and competitive market with great force and speed or to step back and wait. Kraft Foods beverage sector already has a strong hand in the Canadian market, with its coffee line of Maxwell and Nabob being number one and number two coffee brands in Canada. With the increasingly popularity of the Single Serve Coffee Pods (SSP) in Europe and the initial introduction planned in the United States very shortly, a move into the Canadian market can be a…show more content…
To establish our presence in retail stores this alternative opts to give the necessary 35% margin to the retailer and a 20% to the wholesaler. The wholesaler realizes a lower margin due to them supplying multiple locations, thus having more products pass through their locations. The unit break even volume is slightly higher then what may be achievable at first entrance but, since our marketing promotional mix is quite extensive we should be able to capitalize on gaining consumers that are just entering into the market. This marketing mix will slowly taper off as our products become more popular thus reducing costs and creating a more reasonable unit break-even volume. Our promotional mix includes all the TV sponsorships suggested, all of the consumer shows (utilizing the bigger 10 x 30 foot booth) and the three step merchandising plan. These three big promotions should give us exposure to approximately 1.7 million people reached, not including the merchandising (variable). The total cost of our promotions is $768,677.00. To get the product on the shelves we will use the warehouse distribution method. It will cost more to distribute this way in the short run but in the long run it may prove crucial to eliminating the problem of stocking shelves when SSP gbecomes popular. For the second alternative (Appendix 2) we chose the same price of the competitors again and added 2 more pods. With this alternative we assumed that the retailer wants more than 35% margin and

More about Kraft Foods

Open Document