1

1ab|e of Contents
Coffee Mate A br|ef Introduct|on 02
8enef|ts of Coffee Mate 02
O Ll
O Las o sLoraa
O avors
O 9ackaalna
O avlnas
|m|tat|ons of Coffee Mates 03
O ,lsconcLlon urv owdrd mlk vs Co cramrs
O aar vs

Mu|t|p|e 5egment Market|ng 04

Lva|uat|on of 1GI's User survey 03
O @ LxrlmnLalsL
O @ CosL ConsLralnd odr and consrvaLlv
O @ AnL ?ona oodls
O @ CosL ConsLralnd ?ona amlls
O @ AnL

Jy |s te Lxper|menta||st's segment more v|ab|e Ana|ys|s 06

roposed Advert|sement of Coffee Mate 07
O asons or lLs arorlaLnss


2

COFFEE MATE
Coffee Mate is a product of Nestle which was launched in 1961. t is a coffee
creamer which is available in powdered form as well as liquid form. The ingredients
of Coffee Mate as published on Nestl's website are, Sodium caseinate,
monoglycerides, dipotassium phosphate, sodium aluminum silicate, acetylated
tartaric acid, esters of mono- and dyglycerides, artificial flavor, color. t 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]

Benefits Of Coffee Mate & Iimitations of saIes
Coffee Mate is very similar to milk as far as taste is concerned. t can
therefore be substituted with ease. t can be beneficial to those who are allergic
to lactose. Coffee Mate is also a vegetarian product. t 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, crme brulee,
vanilla chai spice, caf 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.
3

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.





4

The Limitations of Coffee Mate are as foIIows:
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.







3

ShouId Coffee Mate be mass marketed, aimed at one segment or aimed at
muItipIe 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]
f 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.

6

EvaIuate the segments from TGI's user survey for target attractiveness and
their fit to Coffee-Mate's strengths Which of the segments wouId you target
and why?

The TG's user survey recognizes different types of consumers of Coffee Mate. They
are as follows:

O The Experimentalist (Sharon and Tracy) (15.4%)
O The Cost Constrained older and conservative (Eileen and Mary) (23.6%)
O The Affluent Young foodies (Sarah and Anna) (24.4%)
O The Cost Constrained, Young families (Dawn and Lisa) (13.9%)
O 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.
7

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.



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 TG'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.

would therefore opt to target the ExperimentaIists 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.








EvaIuate the proposed ad for the target market and benefits promoted WiII the
ad heIp propeI 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.



10

#eferences

O Kotler, P., Wong, V., Saunders, J., Armstrong, G., (2005) Principles of Marketing
4
th
European ed., UK: FT Prentice Hall [E Book] Available at:
http://www.torrentz.com/search?f=kotler. [Last Accessed on 3-11-2011]


O Wikipedia, (2007) Market Segmentation. (nternet) Available at:
http://en.wikipedia.org/wiki/Market_segmentation#Positioning [Last Accessed 3-
11-2011]

O 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]

O Coffee Mate, (2010) ngredients. [Online] London. Available at:
http://www.nestle.ca/en/products/brands/Coffee_Mate/original.htm [Last
Accessed on 1-11-2010]

11

O 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]

O Tsang, G., (2010) at's in your coffee creamer [Online] Available at:
http://www.healthcastle.com/coffee_creamer.shtml [Last accessed 3-11-2010]

O US Dairy export council, (2010) Dry milk powder [Online] USA. Available at:
http://www.usdec.org/Products/content.cfm?temNumber=82658&navtemNumb
er=82273 [Last accessed on 3-11-2010]