Marketing Strategy Presentation July 14, 2009 Stuart GSB | MBA 583 Professor Goldhar Judd Morgenstern Amanda Wirth
Executive Summary Crop to Cup is positioned within a competitive and growing industry of socially responsible, niche coffee offerings. In order to gain a sustainable advantage they must focus their differentiation strategy to stand out from competitors. A marketing strategy that reinforces the brand and leverages new opportunities for growth will support this differentiation.
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Industry Trends
Some key trends relevant to the coffee industry
Consumer Trends Energy, Sustainability, Transparency, Single Origin, Gourmet, Exotic Origins, Fair Trade, Antioxidants Private Label Purchasing private label is a brand-driven decision based on emotional connection Store-brand purchases up 12% ($80B)*Increased likelihood of private label purchases (60% of all shoppers)* Supply Chain Management Increased awareness of Fair Trade Better use of technology to track products from source to sale Social Business Practices Conscientious consumers demanding corporate responsibility Socially conscious branding as a competitive advantage *Source: IRI 2009 Private Label Report
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Relative Market Size
Markets are converging as premium and gourmet coffees find more growth and channels Generic
Expected Augmented
Potential
Mass Coffee Maxwell House Folgers Green Mountain
Premium Grocer Starbucks Millstone
--Shrinking
--Growing
Gourmet Intelligentsia ($12M sales) Peet’s ($290M sales) --Growing 4
Niche Crop to Cup Just Coffee --Beginning
Coffee Industry Overview Specialty coffee in the US has grown large and is approaching a “tipping point”
US Coffee Industry $28B
US Grocery Coffee $3.1B
$0.92B
$12B $26B
Traditional
$2.18B
Specialty
All Other
Specialty
*Source: IRI for 52 week ending 12/28/08
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Business Opportunities
Various options exists, but strengthening the brand will create opportunities in retail and co-branding Roaster/Broker Capabilities / IT Resources Supply chain management Relationships
Private Label / Co-Brand
Retail
Supply chain management Strategic partnerships Brand equity (co-brand)
Strategic partnerships Brand equity Meaningful differentiation
Customers
Small: various websites Medium: Buyer’s Club, Professional Communities, WOM Large: Referral
Organizations needing to garner corporate responsibility
Socially responsible retailers Niche / boutique
Competition
Cafe Imports Royal Coffee Sweet Maria’s Sustainable Harvest
Coffee Holding Company, Inc Stonewall Kitchen Allcoffee Private Label Roasters Allegro Coffee Company Others
Many small, relatively unknown players
Pro (+)
High-service business Leverages supply chain skills May scale quickly
Faster scaling Dedicated and immediate channel access
Brand equity resonates with customers Leverage Crop to Cup brand Greater ability to set prices on fragmented buyers
Con (-)
Subject to high supplier and buyer influence Margins get squeezed Not as defensible / more imitable
Lower margins Heavy buyer power and influence Lower brand differentiation / identity
Hard to get traction Fragmented buyer base requires management Harder to scale Highly competitive
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Potential Positioning Statement "To socially-conscious customers, Crop to Cup is the brand of meaningful coffee that offers a story with every cup because we build relationships with our farmers."
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Insights from Analogous Models Meaningful attributes of successful social programs
• • • •
Communicates obvious benefits Employs intuitive model (1 for 1) Provides tangible support symbol Captured viral, grassroots movement
• •
Engages consumer in production Humanizes the producer (Grandma) Offers feedback / direct connection
Personal Customized Fun
Plays into existing consumer habits Appeals to altruism, and altruism alone Employs intuitive messaging
Easy Simple
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• • •
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Intuitive Tangible Social
Marketing Strategy
Goal Establish position as leading socially responsible coffee provider
Strategies
Tactics
Strengthen the Crop to Cup brand and build awareness
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•
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Distinguish Crop to Cup through social program Strengthen message consistency Promotional popup locations
Examples •
20/5/10 program reframesSlogan, package redesign, branding mockupBlue Bottle kiosk
Reframing 20/5/10
Example messaging for a new social program
Crop To Cup To Farmer
Communicates obvious benefits Employs intuitive model Provides tangible support symbol Captures viral, grassroots movement Engages consumer in production Humanizes the producer Offers feedback / direct connection Plays into existing consumer habits Appeals to altruism, and altruism alone
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Reframing 20/5/10
Example messaging for a new social program
Communicates obvious benefits Employs intuitive model Provides tangible support symbol Captures viral, grassroots movement Engages consumer in production Humanizes the producer Offers feedback / direct connection Plays into existing consumer habits Appeals to altruism, and altruism alone
Micro-loans to Micro-lots
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Reframing 20/5/10
Example messaging for a new social program
Every time you purchase a cup...
a farmer gets his wings Wings are investments that go back into coffee supplier communities to help them rise up
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Communicates obvious benefits Employs intuitive model Provides tangible support symbol Captures viral, grassroots movement Engages consumer in production Humanizes the producer Offers feedback / direct connection Plays into existing consumer habits Appeals to altruism, and altruism alone
Package Rebranding
Principals and ideas to leverage branding and package
Principals: Embed story of farmer on package Employ message consistency Portray hand-made quality Ideas: Burlap sack packaging Blend profile card Personal family stamp Farmer name blends
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Kiosk Store
A cost-effective trial store to promote brand awareness
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Thank You.