Table of Contents

Coffee Mate: A brief Introduction 02

Benefits of Coffee Mate 02

Shelf Life Ease of storage Flavors Packaging Savings

Limitations of Coffee Mates 03

Misconception: Dry powdered milk vs. Coffee creamers Sugar levels

Multiple Segment Marketing 04

Evaluation of TGI’s User survey 05

The Experimentalist The Cost Constrained older and conservative The Affluent Young foodies The Cost Constrained, Young families The Affluent

Why is the Experimentalist’s segment more viable: Analysis 06

Proposed Advertisement of Coffee Mate 07

Reasons for its appropriateness

1

COFFEE MATE

Coffee Mate is a product of Nestle which was launched in 1961. It is a coffee

creamer which is available in powdered form as well as liquid form. The ingredients

of Coffee Mate as published on Nestlé’s website are, Sodium caseinate,

monoglycerides, dipotassium phosphate, sodium aluminum silicate, acetylated

tartaric acid, esters of mono- and dyglycerides, artificial flavor, color. It was launched

as the first non dairy creamer in the market. However, it does contain a few milk

derivatives which are used in the product. [www.nestle.cn.com]

1. Benefits Of Coffee Mate & limitations of sales

Coffee Mate is very similar to milk as far as taste is concerned. It can

therefore be substituted with ease. It can be beneficial to those who are allergic

to lactose. Coffee Mate is also a vegetarian product. It is also available in forms

of low fat, sugar & cholesterol- free. Coffee Mates shelf life is approximately 2

years and requires no refrigeration (unless if it is in the liquid form). This ensures

that it not only saves space and energy but also time as one does not need to

buy it on a daily basis or as frequently as they would buy milk.

Coffee Mate has a distinct advantage over other competitors in its

category in that, they are available in numerous flavors. They are available in

lucrative flavors such as French vanilla, chocolate macchiato, crème brulee,

vanilla chai spice, café latte. They also offer the seasonal flavors such as ginger

bread, eggnog latte, pumpkin spice. Some flavors such as these are available at

coffee houses like Barista but at very expensive rates.

2

Consumers of Coffee Mate observe that coffee mate enhances the taste

of their coffee and gives it a creamy consistency which can only be provided by

fresh cream. They believe that it is comforting and relaxing. Coffee Mate also has

added sugar in them and therefore also cuts down on the requirement of sugar.

Coffee Mate that is available at the market is at that point in time where it has

reached the optimum level of Research & Development. This ensures that it

dissolves instantly and does not form lumps like it used to or as dried milk

powder still does. [www.coffee-mate.com]

Coffee Mate is also available in Eco Friendly packaging. This lends the

company a positive image, as today’s consumers are concerned about the

environment. Coffee Mate is also available in small sachets (one serving) which

provide the consumer a choice to buy the flavor of their choice and if they like it,

they can later switch to the regular 200gm or 500gm pack sizes.

The savings calculator on the Coffee Mates website suggests that the

same quality of coffee when consumed in a coffee house costs almost 40% more

than that offered by Coffee Mate. This could be a major benefit of Coffee Mate as

consumers are very cost conscious these days.

3

The Limitations of Coffee Mate are as follows:

Coffee Mate is designed to taste like milk, it has very negligible amount of milk in

the form of its derivatives present. The company had to therefore include a few

flavoring agents and chemicals in order to compensate for the absence of regular milk.

The ingredients of coffee mate have been under scrutiny for a while now by advocates

of good health and have questioned its benefits. The negative publicity that it

generates could be one factor that limits its sales. [www.healthcastle.com]

Since Coffee Mate is available with added sugar in it, it automatically excludes

consumers who are diabetic or those who like to add their own sugar as needed. Coffee

Mate’s appearance is also similar to dry milk powder which adds to the misconception

that it is similar to dried milk powder. Dry milk powder is not preferred by many and is

disregarded by many because it forms lumps and changes the taste of the coffee.

Therefore this association with dry milk powder and low brand awareness could have

limited its volume of sales.

4

2. Should Coffee Mate be mass marketed, aimed at one segment or aimed at

multiple segments?

Since Coffee Mate has the distinct advantage of supplying flavored creamers

They have made themselves present in a Niche Market. They provide their

products to a specific segment of consumers who consume coffee creamers. Not

everybody likes to have their coffee with cream, let alone coffee cream. Coffee Mate is

increasing its brand presence and should therefore try to increase awareness of the

product and increase its scope within this Niche market. [Kotler, P et al. 2005]

If Coffee Mate were to go for mass marketing for their coffee creamers, they

would lose out on excess advertising spending and even then, it would be difficult to

get the regular coffee & milk consumers to switch. Mass marketing focuses only on one

segment. By doing this Coffee Mate stands to lose out on 14% of the market that is

generated by Coffee Mate Lite. By using multiple marketing strategies, they can tap

both these segments and thus as the case suggests have been able to pull in 51% of

the market share.

Coffee Mate should therefore consider expanding its scope through using

multiple segment targeting. Based on the products that are available these days, it is

evident that Coffee Mate has been targeting multiple segments as they have products

available that are targeted for health conscious people as well.

5

3. Evaluate the segments from TGI’s user survey for target attractiveness and

their fit to Coffee-Mate’s strengths. Which of the segments would you target

and why?

The TGI’s user survey recognizes different types of consumers of Coffee Mate. They

are as follows:

The Experimentalist (Sharon and Tracy) (15.4%)

The Cost Constrained older and conservative (Eileen and Mary) (23.6%)

The Affluent Young foodies (Sarah and Anna) (24.4%)

The Cost Constrained, Young families (Dawn and Lisa) (13.9%)

The Affluent (Dorothy and Amy) (22.7%)

The Experimentalists are as the name suggests easy targeting as they would like

to try out new products. They also have high media awareness and are status

conscious and fashionable. The growing reputation of Coffee Mates ability to substitute

cream, which is considered as an indulgence and choice of the affluent, can help in

attracting the experimentalists. Apart from this, they fall under the age category of 14-

44 which could imply that they value time more. Coffee Mate with its instant creaming

ability could definitely appeal them. They are also heavy users of cream, heavy

consumers of instant coffee and average users of Coffee Mate. This suggests that

there is scope for expansion if this segment was to be targeted.

6

The Cost constrained older and conservative are conservative in their tastes and

habits. Even though they have high media awareness, they are low users of coffee and

cream. They are also budget shoppers and might not want to try out other flavors of

Coffee Mate as the Experimentalists would.

The affluent young foodies are also likely to be targeted as they have a good

level of disposable income. They are also heavy consumers of coffee, and above

average users of cream and Coffee Mate. However, this particular segment of people

has low media awareness. This implies that the Advertisement budget for coffee mate

will have to be increased and different means of reaching this segment will have to be

devised.

The Cost constrained young families have a high media awareness and heavy

users of coffee. However they do not use cream and their shopping budgets are also on

the lighter side. This category also includes students. Not many of them would be

interested in spending on products that they don’t really care for.

The Affluent segment of consumers is also likely users of Coffee Mate; however

they have low media awareness and include the people who are nearing retirement or

those living on pension funds. This implies that they might look at coffee mate as an

extravagant spending and are not very likely to try it out.

7

From this evaluation it can be seen that two segments are highly likely to be

targeted. They are the Experimentalists and the Young & affluent foodies. The TGI’s

user survey suggests that the chances of these segments to be targeted are 15.4% and

24.4% respectively. A current look at the Market suggests that Coffee Mates market

penetration in this segment is already established as most of its consumers are

between the age group of 44 to 65 years. Coffee Mate has the chance to expand its

scope and increase its market share by targeting the experimentalists.

I would therefore opt to target the Experimentalists. One major factor that

might reduce the costs would be that of advertisements as they are high users of media.

Coffee mate can be easily used with filter coffee as well as granulated coffee & instant

coffee. This flexibility offered by Coffee Mate, the flavors as well as convenience will

definitely appeal to this segment. They are also open to new choices, have a good

disposable income and heavy users of instant coffee. All of which are compatible with

Coffee Mates attributes.

8

4. Evaluate the proposed ad for the target market and benefits promoted. Will the

ad help propel Coffee-Mate’s further growth?

The advertisement shows a couple belonging to the young and affluent segment

having dinner with a couple from the same segment. The advertisement portrays a

posh lifestyle with the use of soft music in the background, having after mints and using

fine china for coffee. The advertisement shows that the hosts were originally having

cream and they run out of it. However they have Coffee Mate ready for use for

emergencies just like this. The guests upon being served appreciate the second cup of

coffee more than the first. By showing this, Coffee Mate is trying to portray that the

coffee creamer is better than the cream and it can be used as a better substitute.

Coffee Mates advantage of longer shelf life, taste enhancement, flavor and

convenient pack sizes makes it more lucrative to the already established Young &

Affluent age group. Apart from this, the band wagon effect will ensure that the

Experimentalists in their hopes of being recognized as fashionable and of high stature

will also follow suit. The advertisement will therefore definitely help in increasing the

sales volume as well as bring in more consumers from the Experimentalist segments,

thereby increasing its market share.

References

9

Kotler, P., Wong, V., Saunders, J., Armstrong, G., (2005) Principles of Marketing

4th European ed., UK: FT Prentice Hall [E Book] Available at:

http://www.torrentz.com/search?f=kotler. [Last Accessed on 3-11-2011]

Wikipedia, (2007) Market Segmentation. (Internet) Available at:

http://en.wikipedia.org/wiki/Market_segmentation#Positioning [Last Accessed 3-

11-2011]

Nestle Professional, (2010) Do you know Creamers? [Online] UK. Available at :

http://www.nestleprofessional.com/united-states/en/SiteArticles/Pages/

COFFEEMATEDoYouKnowCreamers.aspx [ Last Accessed on 1-11-2010]

Coffee Mate, (2010) Ingredients. [Online] London. Available at:

http://www.nestle.ca/en/products/brands/Coffee_Mate/original.htm [Last

Accessed on 1-11-2010]

Coffee Mate, (2010) Savings calculator [Online] London. Available at:

http://www.coffee-mate.com/My-Cafe/Default.aspx#savingcalc [Last accessed

on 3-11-2010]

10

Tsang, G., (2010) What’s in your coffee creamer [Online] Available at:

http://www.healthcastle.com/coffee_creamer.shtml [Last accessed 3-11-2010]

US Dairy export council, (2010) Dry milk powder [Online] USA. Available at:

http://www.usdec.org/Products/content.cfm?

ItemNumber=82658&navItemNumber=82273 [Last accessed on 3-11-2010]

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . .

Math homework help

https://www.homeworkping.com/

11