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Battling the decline in hot beverages.

Battling the decline in hot beverages

We continue our publication of the tea and coffee study conducted by the University of Toronto which was authorized by the Associate Board of the Tea & Coffee Association of Canada. In the June issue, we printed the University's study on the marketing possibilities for the tea industry.

Initially, we conducted interviews and several focus groups to find out what attitudes our peers had towards coffee. That is, what are the images which come to mind for 18-35 year olds when coffee is mentioned.

Their responses were not reassuring. The most frequent images relating to coffee were things like: "Caffeine," "Hot," "Bitter Taste," "Morning," "Wake Up," "Relax," and "Nerves." These answers were similar to issues raised in the various U&A studies which we looked at.

However, some patterns were evident in the responses which led us to the conclusion that we should consider our target group as two separate segments: current coffee drinkers, and non-drinkers.

We feel the primary obstacles to overcome are quite different for each group. To induce trial among 18-25 year old non-drinkers, marketers must overcome an inappropriate product image, and an unappealing taste.

In contrast, for those of us who do drink coffee, the main obstacles to increased consumption are: negative attitudes towards caffeine, and situation and usage issues.

We believe that coffee marketers cannot rely on a single approach to market coffee and must create separate promotional strategies for the drinkers and non-drinkers. Non-Drinkers: Focusing on the first of our two target groups (the non-drinkers), we have said the issued are an inappropriate product image and poor taste. Let's examine what drives coffee's image problem.

For the young age group, the image of coffee is unexciting.

We found three examples of current coffee ads which we feel are representative of current copy. We see them as targeting an older consumer. Why? Because the message is portrayed simply through a brand label which does not communicate effectively to a young consumer. The focus is on product information with little emotional involvement. It fails to create the distinctive brand personality which is so much a part of the decision process of young consumers. This copy gives the impression that coffee is not for young people and fails to convince young non-drinkers to adopt coffee as their beverage.

What specifically are we proposing: "Image-Lifestyle Interlock." The strategy behind "ILI" is to more closely link the high-energy, achievement-oriented lifestyle of the young "Joiner Activist" with the image projected by the product. By developing an image in sync with the lifestyle of our target group, coffee will become accepted as part of the young consumer's "evoked set" of beverages. Many of our recommendations will be built on this concept. Taste: Now let's turn to "taste"--the second major reason people stated they didn't drink coffee. Once again, this perception was supportive of our U&A studies.

We do not believe that it is a coincidence that image and taste are the key issues for non-drinkers. No amount of advertising will ever change the taste of coffee. For non-drinkers, advertising and promotional strategies touting taste attributes will not be effective intransforming the non-drinker into a coffee user.

Developing an appreciation for the taste of coffee can only be accomplished over time; it is an acquired taste. Because it is an acquired taste, generating repeated trial is crucial. Our strategy to initiate trial is to use image as the springboard to trial.

For example, look at the beer market. The product inherently does not have a good taste. However, effective "ILI" has persuaded people within the 18-35 group to try beer again and again and again. The beer image establishes it as more than just a beverage--its a lifestyle!

In our situation, by associating coffee with a desirable and attractive lifestyle we feel repeated trial can be generated, the taste will be aquired, and you will have expanded your long term customer franchise. Recommendations: In order to attract 18-35 year old non-drinkers, the hot beverage industry must build their presence in venues populated by members of the "Joiner Activist" target group. The one we are closest to is the university/college market. Here are some recommended marketing strategies for enhancing coffee's image and generating trial among our group:

Special event sampling:

University sports & intramurals

-- Sponsorship of academic clubs

-- "Pub Power Breakfasts"

-- Freebie morning coffees on campus

Revise current copy strategy and related promotions which will:

-- Create greater interest

-- Expand trial

-- Campus "megaboard"

Greater visibility in selected media which reach our target:

-- Now magazine

-- Campus newspapers

The rationale for this strategy is that sampling is the most effective trial generator. By generating trial, the potential consumer is on the road to accepting the taste of coffee. The association campus sports and social events enhances the image of coffee among "Joiner Activists" and strengthens the link between coffee and an attractive lifestyle.

Here are some other ideas we developed which we feel would be effective in neutralizing the negative taste perception of non-drinkers.

A key element in our trial promotions would be to rely on the use of specialty coffees rather than standard blends. Specialty coffees often have more familiar tastes which will lessen the coffee impact. Also, promoting premium priced specialty coffees will generate better returns for the industry. People build their coffee consumption over time and it is unlikely that recent converts to coffee will drink large volumes. Therefore, it makes more sense to promote a higher priced product.

Increasing the awareness of bean variety as a

determinant of taste.

Increase awareness of new coffee flavors.

Increased availability of product information


Type of whiteners to use;

-- cream

-- milk

-- half and half

-- artificial whiteners Brewing instructions:

-- recommended brewing time

-- recommended quantity of coffee Drinkers: Caffeine--I now want to turn our attention to the second segment we identified--current drinkers.

A barrage of articles touting the supposed ill effect of caffeine ingestion has been hitting the press for some time now. Most disturbing to the coffee industry is that at moderate levels, caffeine has been shown to have no negative health effects.

But why is it that colas, which also contain caffeine, have been insulated from the bad press surrounding caffeine (and in fact have continued to see growing sales).

Let me explain why we think this is so. Looking back at our consumer perception map, we found an extremely strong linkage between coffee and caffeine.

Listen to the words: coffee-caffeine. They even sound similar. Every time people ask for a coffee thay are reminded. How can we change this? The key is to weaken this link. De-emphasize it. Play it down. Now much of the press received on caffeine is not under your control. But what is under control is the name.

Recommendations: Our strategy: Change the Name.

This may sound radical but, let me explain what exactly I mean.

In a restaurant, people always ask for "coffee." What we suggest is a dramatic increase in brand awareness, recognition and image. By increasing the profile of brands, people would ask for a particular BRAND of coffee. The cola market provides a brilliant example of this type of brand image marketing. For example, consumers ask for a "Pepsi" rather than asking for a "Cola." The company has successfully disassociated its product from the negative health connotations and stereotypes of colas and caffeine. We want to do the same for coffee.

A significant effort must be expended to increase branding at the distribution point. This can be done with branded cups as well as branded coffee pots, urns and menu boards.
Rather than seeing: Coffee- Large

Wouldn't you rather see: Brand X - Large
 Brand Y - Large

To carry the idea even further, what about convincing food service outlets to provide a completely separate "Coffee Menu."

By breaking the coffee--caffeine name line, the link in people's minds will weaken. Also the consumer franchise will be built and the opportunity for brand differentiating will be created.

It could potentially take coffee away from a commodity type business and demand a higher price. Usage Situations--Aside from a greater concern over the possible adverse health effects of caffeine, our group also felt that we could increase coffee consumption among 18-35 year old current drinkers by improving the convenience of coffee in various usage situations. These are simple things which relate to where we drink coffee, and where we buy coffee. Remember that individuals in the 18-35 year old age group place a great emphasis on social interaction with friends and peers--especially among the "Joiner-Activists" who are distinguished as a group by this characteristic.

We felt that, among our group, coffee is generally perceived to be a morning drink. This was supported by our study which found that two of the most common images of coffee were "Morning" and "Wake-Up." Recommendations--Therefore, we feel an effective strategy for increasing consumption among this group is to increase the number of social situations and the range of activities in which coffee is perceived to be an acceptable beverage. Evening Market--The first strategy is to increase the frequency of consumption throughout the entire day. One thrust would be to focus on coffee as an evening drink. Here the idea is to focus on the "sociability" of coffee.

One of our ideas is to position coffee as an acceptable bar drink.

For many members of our age group; bars, pubs and night clubs are a frequent vehicle for social interaction. We felt however that coffee does not enjoy a strong positioning in this market. Traditionally, the emphasis has obviously been on beer and liquor. But a major opportunity exists as a result of the much greater concern over drinking and driving.

We feel the industry should work with the food service sector to increase the awareness and acceptance of coffee as a suitable drink in this situation by promoting:

--Coffee-based drinks with liqueurs

--"Coffee Hour" (free coffee)

--"Coffee nights" (2 for 1 specials)

discounted prices

A related thrust which we recommend is promoting coffee as a sociable drink in other evening activities.

--Evening study essions

--Evening social activities such as coffee houses

and non-alcohol serving clubs Afternoon Market--Promotion can also focus on the afternoon market. Coffee was often associated with a "perk" or "pick me up." For 18-35 year old "Joiner Activists" this perception can be linked with the self-image of this group.

Copy strategy can be used to strengthen our consumer's image of coffee as an energizing or stimulating drink for those in the "fast lane." During a long, strenuous day, an afternoon cup of coffee is a good way of rejuvenating the spirit, or a useful drink for situations where alertness and quickness are necessary. In-home Convenience--Another area in which we felt the industry could increase consumption among current coffee drinkers, was to increase the convenience of the product within the home.

Our target group are very active and often time is at a premium. Therefore, one idea was to develop a self-brewing, micro-wavable coffee. The idea is to increase the speed in which the coffee would be ready for consumption (ie. early morning rush to get to work, in between various activities, etc).

Another idea is a "Coffee Bag"--a single-serving pouch which is convenient to handle and is suitable carrying. It would be premium priced, and be designed for specialty instant coffee.

A related idea also dealt with packaging. To increase top-of-mind awarness within the home, our idea was to create an attractive, durable container with a magnetic strip which could be stuck on the refrigerator to hold coffee bags. This could provide an easily-accessible dispenser for at-home use.

Finally, we thought that bigger containers for instant specialty brands were appropriate. Currently specialty coffees are primarily sold in relatively small packages. However, a larger size may be more convenient for people who drink a lot of coffee or for households with several coffee drinkers. Branding--We advocate an increased emphasis on branding. We have already stated the importance of various image-enhancing promotion strategies as a way of enhancing differentiation between products. For this approach to have long term impact, however, the industry must use more visible branding techniques to support the differentiation and maintain loyalty.

In restaurants--making greater use of coffee stands which are visible to the patrons and which are identified through various branding techniques.

We are all familiar with the mundane, white, styrofoam cup. It may work well to keep coffee hot, but as a marketing tool it has been largely ignored. It does not offer any clue as to what is contained inside and, unfortunately, supports the image of a generic product. Why not make use of this opportunity to increase brand awareness by working with cup manufacturers to produce and distribute branded take-out coffee cups. Second Cup (a nationwide chain of coffee shops has done so.

Afterall, the white coffee cup can't compete, with brightly colored soft drink containers.

This approach could also be utilized within the foodservice sector. When restaurant patrons order coffee, it is often served in a plain mug of some kind. What about considering promotional strategies whereby branded coffee mugs are supplied to food service outlets in exchange for selling a particular brand of coffee. Promotion--We created the idea of an "I Do" advertising campaign. "I Do" drink coffee. The idea is to build acceptance of the product and an awareness of being part of an "in" group. Current Trends--We also felt that it is important that the industry stay in touch with current trends and issues which are relevant to our target group. One example is the "Ozone Depletion" issue. We recommend that the industry publicize its use of "CGC Free" container products as a way of building confidence among younger consumers and emphasizing concern of the industry over this problem. Purchase Locations--Finally, we considered various options regarding point of purchase promotions. We recommend instituting "coffee islands" in centrally-located, high-traffic, pedestrian mall areas.

Our target group often make a high percentage of food item purchases in non-mass retail outlets such as convenience stores and specialty food stores. An increased emphasis should be placed on marketing efforts through non-mass retail outlets.

The industry should also update current in-store marketing strategies within larger retail stores. As these slides show, in-store shelf positioning and product promotion often supports the concept of coffee being a single, generic product--a long line of similar looking packages and containers. In short a commodity item with little differentiation which can induce a consumer to choose one brand over another.
COPYRIGHT 1989 Lockwood Trade Journal Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Publication:Tea & Coffee Trade Journal
Date:Aug 1, 1989
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