Background: Caferoma, a well-known brand of coffee, is owned by the Pan European Food and Drink Company (PEFD), based in Turin, Italy. It is promoted as an exclusive ground coffee for gourmets. Its image is that of an Italian-style coffee. It has a strong full-bodied flavor and a slightly bitter taste. It costs more per 100 grams than almost every other ground coffee product on the supermarket shelves. Problems: In the last two years, Caferoma’s share of the European quality ground coffee market has declined by almost 25%. There are several reasons for this:Brand loyalty: Consumers have become less loyal to brands and are more willing to trade down to lower-priced coffee products.Price: Supermarkets have been producing, under their own label, similar products to Caferoma at much lower prices.‘Copycat’ products: Competing brands of Italian-style ground coffee at prices 30% to 40% lower than Caferoma’s price have cut into Caferoma’s market share.Brand image: Consumer surveys show that the Caferoma brand no longer conveys a feeling of excitement and enthusiasm, and that it does not give the impression of being up-to-date and contemporary. Possible solutions: Repositioning the productChange Caferoma’s image to appeal to a different market segment.PricingReduce the price by, say, 20% to 30% to make it more competitive.AdvertisingDevise a new advertising campaign.Multiple brandsSell Caferoma, with minor product changes, under different brand names at lower prices.Own label productsSell Caferoma coffee for supermarkets to package and sell under their own labels (but continue to market the Caferoma brand at the same time).A new productBring out an instant coffee or decaffeinated product under the Caferoma brand.Stretching the brandAllow selected manufactures of coffee equipment (cafetieres, percolators, coffee machines, etc.) to use the brand on their goods – for a licensing fee, of course. TASK: Decide and write down what actions are necessary to halt the decline in the product’s market share and to increase profits.Подробнее
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