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Marketing and Brand Management: UK Coffee Industry - Term Paper Example

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The "Marketing and Brand Management: UK Coffee Industry" paper focuses on the UK coffee market which was valued at £680 million worth of sales with a 5-7% annual growth rate since 2000, indicating recovery from the recent price decline during the 1990s…
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Marketing and Brand Management: UK Coffee Industry
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Download file to see previous pages As the 2005 sales of instant coffee indicate, the sub-sector is further divided between regular, premium freeze-dried, decaffeinated, specialty, super-premium, powder, and economy or flavored coffee. Among these sub-categories, specialty coffee exhibited the highest growth rates overall. The dominance of instant coffee is attributed to a combination of aggressive marketing and branding campaigns by brand manufacturers, as well as the price consciousness and brand loyalty characteristic of coffee drinkers. However, instant coffee growth rates lag behind ground and roast, increasing only by 11.1% from 2003-2005, compared to 13.6% for the latter, which can be attributed to the development of new pod technologies and the decreasing prices of coffee machines, which allows consumers greater convenience in home brewing; and the prevalence of repertoire drinkers2, indicating an increase in consumers drinking both instant and ground coffee.

The market is also highly segmented with distinct divisions in terms of age groups, geography, and consumer behavior. Demographically, consumption increases with age as the majority of heavy coffee drinkers in both sectors found among the 35-64 groups, with 76% drinking instant coffee and about 43% drinking instant exclusively. With respect to ground coffee, consumption is concentrated in more affluent regions of the country, indicating price consciousness among drinkers.

Only a few manufacturers dominate the coffee market. For instant coffee, the market is dominated by Nestlé (56%) through its Nescafé Original Blend (33%) and Gold Blend (15%) – the two highest-selling brands – followed by Kraft (22%), and Own-label products (11%), while other manufacturers made up the remaining 11% in 2005. There are no dominant suppliers for ground and roast. However, one company, Douwe Egberts, had the highest market share at 12%, followed by Cafédirect, Taylors, and Lavazza, with 8% market shares each.    ...Download file to see next pagesRead More
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