Marketing_assignmen11[1].doc

Chen Xinwei Student ID: CHXND1001MKTG101 / GCSB103Individual AssignmentSemester 2, 2010Cover Sheet / Marking GuidelineName: _Xinwei Chen_ Student ID # _CHXND1001_ Product: Moccona Classic Freeze Dried Coffee 400g Submission ID # _DescriptionMarksSWOT Matrix/ 6Analysis and IntegrationProduct/ 3Price/ 3Place/ 3Promotion/ 3Overall Presentation Includes grammar, spelling & layout/ 4Referencing/ 2Total Marks/ 20Adjusted ResultReason for adjustment:_/ 20Student Signature: _Introduction Australia has a coffee culture for over 130 years under the influence of Europe and America. According to research conducted by Rural Industries Research and Development Corporation (RIRDC), Australia imported the amount of coffee which equals 45000 tons of dry green bean (DGB), which values approximately $700 million per year.As the consumption of coffee in Australia is fairly huge, the competition in coffee market is fierce. In instant coffee market, major brands are Nescaf which is own buy Nestle, Moccona coffee and Riva Coffee. Among these brands, Moccona owns a critical position because of its professional and progressive market strategy. In this article, we are going to analysis Moccona using SWOT and analysis Moccona Freeze Dried Coffee, this specific product range in product, price, place and promotion (4Ps).Moccona is a brand of a Netherlands company called Douwe Egberts Koninklijke Tabaksfabriek-Koffiebranderijen-Theehandel NV (Douwe Egberts Pty Ltds), which now is a subsidiary of an American international corporation called Sara Lee. Douwe Egberts Pty Ltds was found in 1753 and was brought into Australia in 1960s. Moccona is a brand of Douwe Egberts Pty Ltds for instant coffee. Firstly Moccona is sold in delicatessens and specialty outlets, then through pharmacies and now consumer can easily get one from supermarkets and groceries.Moccona Classic Freeze Dried coffee range is presented in glass cylinder jars with a gold label which offered in 4 specific types of product, including Classic Dark Roast, Classic Decaffeinated Roast, Classic Medium Roast and Classic Light Roas. However, there are other ranges of products offered by Moccona to meet the satisfaction of larger number of consumers. Moccona coffee is made in Netherlands by using Arabica beans and Robusta beans, which are come from Middle, South America, Asian and Africa respectively.Moccona Classic Freeze Dried coffee range aims to target household market. In other word, high quality of product, attractive packaging, aggressive promotion and innovative design are required. In terms of market segmentation, Moccona is targeting almost all the Australia people from twenty years old, both male and female, despite of religion, occupation and income level, especially those pursuing relatively high quality of lifestyle but with limited leisure time or feeling stressful about their jobs or study life. SWOT Matrix - 6 MarksProduct: Moccona Classic Freeze Dried Coffee 400gStrengths Professional in producing instant coffee History/ Reputation ( founded 1753) Diversity promotion methods Good quality Pursuing innovation Maturity of product Cooperation with other business Support from parent company Position of a display in supermarket is at eye line lever Innovative packagingWeaknesses Packaging is not environmental friendly The cost of packaging is high Lack of component products Experiencing decline stageOpportunities The popularity of “coffee culture” The over-diversity of products of competitors Globalization Geographic advantage High loyalty of coffee brand Price is less important to consumersThreats Relatively low market share Fierce competition Stronger promotion of competitors Main competitor with better reputation 3-in-one coffee is becoming more popular Oligopoly of several international business Instant coffee industry is replacing by pure coffee industry.SWOT analysisMoccona is a competitive brand in Australia instant coffee market. Its professional image is partly contributed by over 250 years history in making coffee and also because of its outstanding quality and advertising activities. But as the cost of packaging and producing cost is high, it is not as profitable as its competitors. Some people also blame that the glass jar is not environmental friendly.As the spread of coffee culture and globalization, the whole coffee industry is in confronted with an opportunity to expand its business. Moreover, Moccona coffee is made in Netherland which is a symbol of high quality. However, Australia coffee is dominated by Nescaf whose parent company is Nestle, one of most famous food companies in the world, the battle seems to be tough to Moccona. On the other hand, because of the improvement of peoples requirement of life quality, premium and roast and ground coffee are becoming more popular and start to replacing instant coffee.The 4Ps analysis-Product, Price, Place (distribution), PromotionProductAccording to Elliot, Rundle-Thiele and Waller, a product is “a good, service or idea offered to the market for exchange”. As mentioned before, Moccona is an individual brand for instant coffee and possessed by a Netherland company Douwe Egberts, which now is a subsidiary of Sara Lee, America. Moccona Classic Freeze Dried coffee, as a major product range of Moccona, are consumer products which usually purchased by individuals and families for their needs or wants. To be more precise, as most coffee products, Moccona coffee is a convenience product characterized by affordable price, repeatedly purchased and relatively less time-consuming in deciding to exert purchases. It also means that consumer can easily buy one from retailers. From Moccona website, it is easily found out that in order to meet more consumerss needs and target a larger market, Moccona Classic Freeze Dried coffee range is comprised of Classic Dark Roast, Classic Decaffeinated Roast, Classic Medium Roast and Classic Light Roast as a product line. And Moccona also offered other types of coffee products, including chilled coffee, paper-packed coffee, bottle-packed coffee, etc, to become more competitive. These products join together to form a product mix to target a large span of consumer with different needs. The package of Moccona Classic Freeze Dried, the conspicuous glass cylinder jar with gold label, and the emphasis of quality make Moccona distinguishable from other casual and simple-designed package product. The classic golden label contains essential information to attract consumers and simultaneously, help them to make a better decision. In terms of Product life cycle, an assumption is made that Moccona Classic Freeze Dried coffee range is in maturity now. Moccona Classic Freeze Dried coffee range was brought into Australia in 1960s. During this period, Moccona Australia experiences introduction, growth and maturity these stages of both company and products. Now, Classic Freeze Dried coffee range is one of the major instant coffee products in Australia with good reputation and quality guaranteed. According to Elliott, Rundle-Thiele and Waller, maturity is the stage that sales curve and profitability has peaked, or even started to decline. In this stage, business needs to exert more effort to remain or have further progress in market. From a research conducted by Pacific Islands Trade and Investment Commission (PITIC) Sydney in 2007, the main competitor of Moccona, Nescaf owns 70% of the market share while Moccona only counts less than 20%. In past decades Moccona did not increase its market share successfully and the market share even declined as the new instant coffee brand, such as Riva, started come into Australia. However, as more innovative product mixes introduced and a new promotion strategy was applied, Moccona had stopped losing its customer and attracted the attention of public effectively.PricePrice is defined as “the amount of money a business demands in exchange for its offerings” in Marketing. It is important to aware price controlling is most direct and effective way to compete with other sellers. Price also has a psychological impact on consumer to imply the quality of product, so lower price dose not necessarily means higher competitive.According to the research of PITIC, coffee drinkers usually have high level of brand loyalty and relatively insensitive to the price of product. On the other hand, price of instant coffee products varies because of the quality of coffee bean producers used and also depends on “style”. Therefore, in instant coffee market, competition between brands tends to be non-price. That means sellers might focus on products quality, promotions, packaging and distinguishable features. The research also indicated although the demand of coffee is increasing, instant coffee market is replacing by pure coffee market which consists of premium and roast and ground coffee segments. Hence, the competition in instant coffee market is fierce.As a business that stayed in Australia over 40 years, Moccona used a scientific and mature structure to decide the price of its product, which is mainly considered in four factors- profitability, long-term prosperity, market share and positioning. They are also the main objectives of an organization. In order to achieve these objectives, several variables need to be controlled and well-designed. Moccona Classic Freeze Dried coffee is sold at $4.89 to $9.58 per hundred grams in Woolworth in Macquarie Shopping. Compare to its competitors, such as Nescaf and Riva, the price of Moccona is slightly cheaper by 20 to 40 cents and Moccona does not use odd-even pricing. Nevertheless it is reasonable to assume that Moccona has reference priced its products in which way Moccona Classic Freeze Dried coffee would be more attractive to consumer than Nescaf and Riva because of the cheaper price. The PITIC research also showed that Nescaf, Moccona and Riva has made up over 90% instant coffee market share in Australia and these bands targeting similar consumers and offering similar product mix. However, its not difficult to notice that the special design of the Moccona jar and diversity of product available in Moccona display area. Because Moccona coffee is made and packed in Netherland by using coffee beans imported, the cost of producing will be much higher than those produced in countries where labor is cheaper or those packed in imported countries. Moreover the design of the containers increases the cost as well. In this way, Moccona cannot gain large profitability so easily in contrast with the other two sellers mentioned before. Consequently Moccona has to maintain a certain quantity it sold to achieve the objectives. In order to improve sales performance, Moccona invests more into promotion activities and emphasizes on quality and profession of its products. Place (distribution)According to Elliot, Rundle-Thiele and Waller, Distribution to Moccona is the means of making the products available in supermarkets and other retailers to insure the consumer can get on anytime they want. Compare to other industries, such as auto industry and electronic industry, distribution of instant coffee is quite simple and straight forward, and also not as strict as some perishable product products like flowers and fresh fruits. As a consumer product, Moccona coffee distributed in a market channel which initially takes goods from the producer to wholesalers, then to retailers, and finally to individual consumers. The intensity of product coverage of Moccona coffee is intensive distribution which means customer can find it easily at a supermarket, a corner store or a petrol station without travel a long distance. According to Mocconas website, its products are only available in Australia, Newland, Thailand and Russia while they are produced in Netherland. Therefore, the best choose for business to distribute goods would be transport through sea freighters from producer to wholesalers and then send to retailers by using railway or road. In this way, the cost of transportation would be low and most efficient because of the package and long store time. Sara Lee is an international corporation which owns seven main subsidiary companies including Moccona. At the same time, Sara Lee offers wholesaler service and management for these subsidiary brands. Its a manufacturers whole seller which offers management of inventory, risk, promotion and communication. Compare to merchant wholesaler, Sara Lee can provide more sophisticated technology and management at a lower cost. On the other hand, coffee as a convenient product and easy to store, products could be available in most type of retailer. However, the major retailer type would be supermarket such as Woolworth and Coles in Australia. Normally, these retailers location is convenient to customers and spread around the country. There are small amount of products are trade online as well, although usually this type of trade is not sponsored by Moccona. Promotion In Marketing, written by Elliot, Rundle-Thiele and Waller, promotion is “the marketing activities that make potential customers, partners, and society aware of and attracted to the businesss offerings”. Moccona has noticed that compare to price, product and distribution, promotion requires more continuous invest and the reward is more effective.In order to meet the objectives of promotion, which including attracting awareness, retaining loyal customers, combating competitive promotional efforts, etc, Moccona has to conduct promotion mix. One of the most effective methods is advertising. There are two editions of television advertisements which are slightly different joint together with relative poster. People can access to them no matter at home or on the way by watching television, reading news paper, listening to the radios, or passing by a poster. In this way, Moccona can attract awareness of existing customers, potential customers and partners of business, encouraging product trial, retaining loyalty of customers, reducing fluctuations in sales and combating competitive promotional efforts. It is also the most basic way of promotion and many other promotions are exerted by using this method. However, because advertising is used by most of business, it is not a persuasive way to consumer. And the effort of advertising is not measurable. Sales promotion is another basic method used in promoting products and business. Customers might find a coupon of Moccona coffee or incidentally get a free sample of Moccona coffee when shopping in a super market. Compare to advertising, sales promotions outcome is more direct and more likely to attract potential customers. Moccona also sponsors a website called coffee wellbeing and use it as a public relations tool to promote both d