Team 7
Amy Barnes
Carrie Beasley
Vincent Frankal
Christophe Jaubertie
Julien Malmont
Marketing 380
Professor Robbins
April 16, 2003
Table of Contents
Product Concept3
Branding Strategy3
Product Characteristics 4
Pricing Strategies and Tactics5
Cost Estimates5
Sales Forecast6
Discounts6
Product Concept
The concept behind our instant coffee product is a gourmet coffee for people who do not have time for such a luxury. We will provide an instant coffee that captures the taste of gourmet drinks offered in coffee bars, with the ease and speed of an instant hot beverage.
Branding Strategy
Our branding strategy is to make use of rich and luxurious looking packaging, with a Spanish name to symbolize the excellence in quality. The brand name is Café Pronto. It is Spanish for ‘ready coffee.’ While the consumer may not know the exact translation of the name, it is general knowledge that the word ‘café’ means ‘coffee’ and that ‘pronto’ means ‘in a hurry’ or ‘immediately’ in other languages. This allows for a general understanding of what the title means, while still carrying an exotic stigma because it is a foreign language.
We chose the Spanish language because of the status related to it. Colombian coffee is highly regarded and desired. It tested well in our convenience sample.
We feels that we have made the best choice for our brand name. The name Café Pronto is of a reasonable length, four syllables, to allow for easy recall in the minds of consumers. It is easy for consumers to make a rough translation of the name, so that they know what the product is, while still carrying an air of the foreign and gourmet. Two little words have helped us to create an image we are proud to promote.
Product Characteristics
The core product is the cup of flavored coffee whose taste is comparable to that of the coffees offered in chic coffee houses. The smell is invigorating, the taste is superb, and the experience of consuming such a beverage has a feel of luxury.
The actual product is a tube of flavored instant coffee. It will look grand and the brand name will denote a sense of the foreign, the lavish, the gourmet: Café Pronto. Each of the flavors will taste as though it has been freshly brewed, proving the quality of the product. The overall packaging will also aid in the products perception as a gourmet item because of the rich colors used in the outer box. There will be a window through which to see the individual packaging inside. Each individual serving size will come in its own packaging, staying within the theme of luxury and gourmet. The individual packaging will be made of a foil type material, in the rich colors of the outer boxing.
The augmented product will be the mixing stick that comes in each individual package, to aid the ease at which our product can be prepared. Refunds will be offered to those who are not pleased with the product. Also, a set of easy-to-follow directions will be on the product.
The product box packaging is space efficient and will protect the individual packaging on the inside. It is in rich colors of dark red, gold, and royal blue. The individual packaging will be in similar colors, air-tight to ensure a fresh taste and quality product, and will be small enough to be easily carried when on the go.
Pricing Strategy and Tactics
Cost Estimates
We chose a price of $5.00 for the ultimate consumer because that was the popular price we found in our convenience sample. The following table shows how we found the food broker’s/wholesaler’s cost and our manufacturing cost from that retail price:
Retail Selling Price / $5.00Retail Markup % / 25%
Retail Cost % / 75%
Retail Cost / $5.00 x 75% = $3.75
Wholesale Selling Price / $3.75
Wholesale Markup % / 10%
Wholesale Cost % / 90%
Wholesale Cost / $3.75 x 90% = $3.38
Manufacture Selling Price / $3.38
Manufacture Markup % / 50%
Manufacture Cost % / 50%
Manufacture Cost / $3.38 x 50% = $1.69
The price at which the food broker will sell to the retailer is $3.75. We will sell to the food broker for $3.38 per box of Café Pronto. Our actual cost of producing the product is $1.69. This grants us a profit of $1.69 per box, containing 20 individual servings of our product.
Sales Forecast
Upon researching the Metrolina area using census data from the year 2000, we were able to figure out how much of the market area fell into our target market category. Our target market is those who are between the ages of 22-44 with a bachelor’s degree. These are the approximate results:
County / Population / Bachelor's Degree / Ages 22-44 / Target Market No.Mecklenburg / 695,454 / 30% / 45% / 93,886
Gaston / 190,365 / 10% / 30% / 5,711
York / 164,614 / 15% / 30% / 7,309
Rowan / 130,340 / 10% / 30% / 3,871
Union / 123,677 / 12% / 35% / 5,194
Cabarras / 131063 / 15% / 35% / 6,881
Lincoln / 63780 / 13% / 40% / 3,317
From this, we were able to figure out that our target market was approximately 10% of the Metrolina area. 10% of the Metrolina area is 149,929 people. We think a reasonable estimate of sales of Café Pronto for 6 months is 8% of that target market, yielding approximately 12,000 units to be sold.
One case of our product contains 12 box packages, each containing 20 individual servings. With each case holding 12 packages of the product, we expect to sell 1,000 cases to our food broker. We would make a profit of $20,280.00 in the first six months of production at this rate.
Discounts
We will offer a cumulative quantity discount to our food broker. We give 10% off of the purchase for any order over 210 cases in a six-month time period. If the 1,000 cases were purchased at one time, the total price to the food broker would be $40,560. However with a discount of 10%, the price would be $36,504. This will hopefully encourage the food broker to continue business with us.
We will also offer a discount to the final consumers. On each box package there will be a coupon for $0.75 off of the next purchase, redeemable at the time of next purchase with the coupon. We will absorb the cost of the coupon. We will use this method to try and jump-start the purchasing of our new product.
1