Assignment:
You are a consultant hired to help Kraft Foods address their marketing challenge with Kraft Singles in Canada. Develop a four page memo that answers the following questions.*
1) What is the marketing challenge that Kraft Canada needs to address?
2) What marketing objectives should they put in place to address that challenge?
3) Using concepts from the readings (Spiller & Baier Chapters 1 & 2 and the Harvard Coursepack: Segmentation & Targeting) and lectures, analyze the challenge and suggest potential solutions. (Remember to bold at least three concepts from the readings in your analysis). This analysis should evaluate the customer segments, areas of product differentiation, and what to consider for developing a value proposition.
4) Customer retention is important. How should Kraft Canada ensure that, in pursuing millennial moms, it will not alienate its traditional customer group - Canadian families?
5) What is your final recommendation? What should the Kraft team do to address the marketing challenge that they face?
Calculate the CLV of the customer segment that the Kraft team should target. To get the full five points, you should do the following:
1) Explain the assumptions that you used to calculate CLV for that customer group. You may have to make assumptions that are not included in the case. There is not one correct answer. You will get points if you identify the assumption(s) and justify it with a sentence.
2) Briefly outline your calculations, using the simpler equation on page 6 of Harvard Coursepack: Customer Lifetime Value CLV =m r 1 + i - r
3) Provide the final dollar amount.
4) To be more accurate, what other factors could you consider if the information was available for your analysis?
HINT: Assume the following:
1. A discount rate of 5%.
2. Millennial moms spends $125 per year on Kraft singles.
3. It costs Kraft $12 per customer in promotional costs.
4. The variable cost are $8.
5. 65% Of customers purchase Kraft singles from one year to the next.