Kraft Background Info

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Kraft Case Kraft mission, Corporation, Achieve leadership Fostering innovation Achieving high product quality Keeping a close eye on profit margins Corporate objective Build superior brand value Enhance product demand Expand global scale Build a learner cost structure Follow consumer trends Pod objectives 30% expected to be purchased out of home customers Goal for 80% of SSP machine owners to try the product 7-14 pods per week by users 60% of repeat purchase Break even by 2006 Households in Canada 6% to adopt SSP in 2004 and then 8% by 2006 2.5 million Households in Canada Kraft History Kraft performance Founded as cheese manufacture in 1903 Largest food and Beverage Company in the North. Second largest in the world Operates in at least 155 countries (2004) Business in 5 categories Beverage, snacks, convience meals, cheese groceries, Currently owns over fifty $100 million brands Strong distribution network 32% market share in Canada Known for innovative new products Europe coffee pod market First conceived in 1978 by Italy’s “lly caffe” This targeted office users Redesign by Kraft foods in 1982 2003, Kraft marketed pods in 10 European countries Senseo launched in 2001 first 3 years sold 3 billion In 2003 single sense pods accounted for 15% of all coffee pods sold in Europe Canadian coffee market Coffee market intense- growing selection Increase in specialty store; Tim Horton’s or Starbucks Retail sales- 600 million on 2003 Consumers willing to pay premium for convenice 2% increase in coffee sales 432 million in grocery stores Large size partners- price wars 15-20% sales- double digit growth Competition- regular coffee Kraft owns Maxwell and Nabob- #1, 32% share Nestle- 17% P&G- 9% Private Labels- 23% Smaller companies- 19% Maxwell- Canada’s top retail brand of roast + ground coffee Nabob-

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