Competitive strategies for coffee brands Maria Kharitonenko Anna Gulyaeva, 2014

Introduction In our presentation we analyzed Russian coffee market and its main producers and identified their competitive strategies

While eating 42 15 12 8 8 5 5 4 2 Wake up Relax Calm down Have a break Treat oneself Improve state of health When thirsty Needs for coffee Get prepared

Has low Coffee education: In most cases choice is made based on the awareness of the Brand. Use several Brands simultaneously for themselves and for the guests Wising Up: Smart shopping for value for money solutions: discounts, doy packs, cheap FD, economy packs. Are not Coffee lovers: Functional consumption with key need to wake up, keep going, energetic Main Peculiarities of Coffee Consumption in Russia Source: Coffee Culture U&A Study , IPSOS, 2012

Coffee Market in Russia Soluble coffee 2013 -2% Spray-dried(22%) -13% Mixed(29%) -4% AC Nielsen, Sales volume dynamics vs YTD 2012 Premium (27%) +11% Super premium (2%) -3% Economy(19%) -2% Freeze-dried (49%) +5%

Sales of coffee brands AC Nielsen Market value share

Generic Strategies matrix Overall Cost Leadership Differentiation Cost Focus Differentiation Focus Stuck in the middle' Competitive advantage Low Cost High Cost CompetitiveScope NarrowBroad

Coffee Market in Russia AC Nielsen, Sales volume dynamics vs YTD 2012 We consider instant coffee brands on Russian market and place them onto the Generic Strategies matrix : 1. jacobs monarch 2. nescafe 3. tchibo 4. carte noire 5. jokey 6. jardin 7. chernaya karta 8. maxwell house 9. ambassador 10.moskovskaya kofeinya na payakh 11.milagro 12.moccona

Porters model Jockey Caf Pele Maxwell House Nescafe Gold Jacobs Tchibo Jardin Red Price Carte Noire Davidoff Ambassador Chernaya Karta Competitive advantage Low Cost High Cost CompetitiveScope NarrowBroad

Possible Market Structure Market Leader 40% Market Challenger 30% Market Follower 20% Market Nicher 10%

Possible Market Structure market leader 40% Nescafe market challenger 21% Jacobs market challenger 19% Tchibo market nicher 10% Carte Noire Davidoff market followers all other brands