Task: Please answer the questions listed below in detail.
Question 1. What would you recommend to coffee producers to win the college market back to coffee? Please be specific.
Question 2. Would you develop different strategies for regular versus decaffeinated coffee? Why or why not? Which would you emphasize for college students today, or would you try to sell them both?
Question 3. What kind of marketing communication system might you establish to keep in touch with students and other young coffee drinkers? What would you recommend for the middle age coffee drinker?
About 25 years ago, the number one drink in America was coffee. The trend was not good for the coffee industry, however. From the 1960s to the end of the 1980s, the sale of coffee declined. By the end of the 1980s, soft drinks had become the number one drink in the United States.
The history of coffee sales is revealing. The original colonists were mostly tea drinkers, bringing the habit with them from England. There were some coffee drinkers in the Dutch colony called New Amsterdam. In 1773, the colonists dumped hundreds of chests of tea into Boston harbor because of taxes, and America became a coffee-drinking nation.
By 1962, coffee sales were up to $1 billion a year, and three-fourths of the population drank an average of over three cups a day. The market looked so good at that time that Procter & Gamble bought Folger in 1963. From 1963 on, however, coffee sales have declined.
What happened in the 1960s to change the market? A major factor was the battle between Pepsi and Coke for the teenage drinker. Pepsi developed the theme of the Pepsi Generation. Coke responded with themes directed toward young people as well. Coffee ads, meanwhile, were directed toward the over-35 crowd. The spokespeople for coffee were middle-aged women, such as Mrs. Olsen, who promoted Folgers Coffee. Meanwhile, the Pepsi generation grew up and took their preference for soft drinks with them.
More recently, coffee producers have been trying to woo back younger drinkers. Coffee companies are promoting frothy, flavored cappuccino-style instant coffee. Another campaign is aimed at the new generation of college students. The Coffee Development Group has 50 "coffee houses" on college campuses, providing a coffee grinder, a brewer and a cappuccino machine, among other supplies. The idea is to get students back to drinking coffee. Recent studies have found that students are drinking soft drinks for breakfast. Coffee makers want to change that trend back to coffee for breakfast.
Meanwhile, coffee shops such as Starbucks are experiencing a resurgence. They are cutting into the business of companies such as Dunkin' Donuts that have a much smaller selection. One problem is that the price of specialty coffees has increased dramatically, partially because of the huge demand. This has cut into the profits of coffee shops. Meanwhile, the sales of canned coffee continue to decline. Now the consumers have had a taste of fresh-brewed coffee, which is what they prefer, regardless of the cost.