Café Crown is analyzing its brand image, product differentiation, and customer communication issues. It aims to attract the mid to upper-mid income, young Turkish customer between ages 15-25. While affordable and convenient, Café Crown faces imitation from Nescafe and lacks premium products. The Turkish coffee market is growing as urbanization and youth population increases, but economic challenges remain. Café Crown should enhance its brand image, introduce premium products through cobranded lines, and increase customer contact through social media, vending machines, and sponsored events.

1. CAFÉ CROWN-
STRATEGIC ANALYSIS
SALİH BURAK AKAT
MBA 2015 SPRING
STRATEGIC MANAGEMENT

2. ISSUES
• Brand Image
- Imitation of Nescafe Products
• Product Differentiation
- Premium Products
• Customer Communication
- Decreasing association to daily life of young
people
- Lack of contact points with customers

3. CUSTOMER
• Mid Income / Upper-Mid Income Class
• Male and Female
• Between ages 15 to 25
(High School Teenagers, Young University
Students, Early Professionals)
• Stimulation by Word of Mouth
• Actively engaged in social events and
organizations.

4. VALUE
PROPOSITION
Why Café Crown at all?
Brand Name
Affordable
Easy and Quick to Prepare
Different Tastes and Products
Why Café Crown over others?
Brand Image; Young People Oriented

5. MARKETPLACE
ANALYSIS
• Economy
GDP Annual Growth Rate is slowing down; 4,2% 2013-
Q3 and 1,7% 2014-Q3
High Inflation Rate; 7,55% March-2015
Rising Unemployment; 10,9% and 20% youth
unemployment December 2014.
Depriciation of TL against USD;

6. MARKETPLACE
ANALYSIS
• Demographics
Population; 77,7 million (2014)
Increasing Urban Population;
8% increase in 15 year
More than 75% living at urban sites
Growing Young Population;
16% of population 15-24
5,5 million university students (2014)
Participation of 18-22 age group to higher education; %40(2014)
Growing Middle Class; 20% of population
Changing household structure; increase in single household
structure (7,9% in 2012 -8,6% in 2013)

7. MARKETPLACE
ANALYSIS
• Cultural Values
Shift in consumption groups; 79% of consumer between 18-45
Increasing demand for packaged and frozen foods; full time working family
members or individuals
Increasing Brand Consciousness; increasing preference of local brands
from west to east. Western regions are usually indifferent.
Growing Instant Coffee Consumption; Avearge 7% annual growth with 0,7
kg per capita consumption annually (EU 7 kg)
Regular Coffee Consumption; 80% consume coffee regularly
High Consumption of Instant Blends (3 in 1); 6th in the world
Changing Preferences in Coffee Consumption (2012 figures)
Turkish Coffee; 16%
Instant Coffee; 27%
Instant Blends (3in1-2in1); 57%

8. MARKETPLACE
ANALYSIS
• Legislation
Turkish Food Codex
Soluble Coffee Dry Material Content; 95% of its weight
Soluble Coffee Cafein Amount; 2,5-5% of its dry
material content
Soluble Coffee Glucose Amount; 2,46% maximum

9. DRIVING FORCES
• Increasing coffee consumption in Turkey
Annual coffee consumption; 22.000 tonnes (Turkey)
Market Volume; 500 million USD
Expected to be doubled at 2020 according to global trend.
• Growing urban young middle income class population
• Shift in consumption group;
• Demand for quick, easy to prepare, tasty goods
• Entry of global coffee chains and formation of local ones.

10. KEY SUCCESS
FACTORS
• Strong distribution channel
• Brandname and Brand loyalty
• Affordable price
• Different Tastes and Product Options
• Customer communication (packaging, coffee machines, mugs,
social events, advertisement)

11. PORTER’S 5 FORCES
ANALYSIS
Threat of New Entrance-HIGH
- Growing coffee consumption
- Low switching cost for customers
- Vertical and Backward Vertical
Integration of big players
- Economies of Scope
Threat of Subsitute Products-
MEDIUM
- Coffee as stimulater and taste
- Tea and other instant hot beverages
as social drink subsituitue
- Turkish coffee culture
Bargaining Power of Suppliers-LOW
- Numerous ingridient suppliers
- Numerous packaging facilities
for outsourcing
Bargaining Power of Buyers-MEDIUM
- Brand Loyalty (For Suppliers)
- High Sales Volume
- Limited Shelve Space (For Buyers)
Rivalry-HIGH
-Many firms located at low cost
or premium
- Product Standardization

12. INDUSTRY
LIFE CYCLE
• Instant coffee blend industry is at growing stage
- Consistent annual growth of instant
coffee market.
- Majority of instant coffee ; instant
coffee blends
- Increasing Local/Global coffee chains;
affecting consumption pattern.
Competitive Advantage
- Product Differentiation
- More intense distribution for avaliability
- Relatively lower pricing than
competitiors
- Enchancing brand awareness via
advertisement and customer
communication

13. COMPETITOR
ANALYSIS
Nescafe 3 in 1
• First comer and industry leader
• 4 classic product variation
More Coffee, More Cream, Cream-Milk, 2-1
• 2 different flavours; Hazelnuts-Chocolate
• Pricing at retailers: 0,45 TL – 0,55 TL
Different packages
• Slogan: Mükemmel Karışım
(Excellent Blend)

14. COMPETITOR
ANALYSIS
• Strenghts
Global Brand Name-Brand Image; generic name for
instant coffee in Turkey
High Quality
Strong Distribution Channels and R&D
Strong Customer Communication
• Weakness
Lack of flavoured products
Frequently changing brand faces,
sometimes contradictory

15. STRATEGIC
MAP
Quality is considered to be combination of taste, different
products and brand name/image

16. FINANCIAL
ANALYSIS
Ülker (in Mil. TL) Nestle S.A. (in Bil.
CHF)
2012 2013 2014 2012 2013 2014
Total Revenue 2343,2 2748,4 2891,2 89,72 92,16 91,61
% of growth - 17,3% 5,2% 2,72% 0,59%
EBIT 243.54 279.12 263.22 13,451 12,437 10,268
%EBIT - 14,6% -5,6% - 21% 8%
Net Income 166,97 188,65 211,71 10,23 10,02 14,46
%Net Income - 12,9% 23% - -2,08% %44,3

17. SWOT
ANALYSIS
Strenghts
- Brand Name [KSF]
- Affordable Price [KSF]
- Strong Distribution Channlels [KSF]
- Different Tastes [KSF]
-Brand Loyalty [KSF]
Oppurtunities
- Growing Coffee Consumption [DF, P5F, MA]
- Preference Towards Instant Blends [MA]
- Entrance of global coffee chains [DF]
- Formation of local coffee chains [DF]
- Rapid Urbanization [DF, MA]
- Increasing Young Population [DF, MA]
- Growing Middle Class [MA]
Weaknesses
- Decreasing Customer Communication [KSF,
Issue]
- Brand Image [Issue]
- Lack of Premium Products [Issue]
Threats
- Slowing economic growth [MA]
- Decreasing Purchasing Power [MA]
- Reaction of Turkish Coffee Providers [MA, PF5]
- Legislations limiting product differentiation
[MA]
- Bargainging Power of Buyers [PF5]
- Tea and other instant hot beverages [PF5]
- Growing market; competition [ILC]

18. GENERIC
STRATEGY
• Differentiation Strategy
- Seek to attract a broad market-Driving Force
- Convince customers to pay premium- SWOT Oppurtunity
- Enchancing customer communication-Key Success Factor
- Enchancing brand loyalty-Key Success Factor
• Brand Image
• Product Differentiation
• Customer Communication

19. IMPLEMENTATION
• Brand Image; Follower and Imitator of Nescafe (Weakness)
o Bundling-Packaging
• Lack of premium products (Weakness)
• Mature Industry; product customization(Threat)
• Growing bargaining power of buyer (Threat)
o Cobranding
• Decreasing customer communication (Weakness)
o Increasing customer contact by getting into daily life with
artifacts and social media promotions

20. IMPLEMENTATION
BRAND IMAGE
• Bundling with a Ülker product from biscuits segment
Aim; sales and penetration of 3 in 1 product using well
established brands- All in one experience
• Changing packaging or mugs
for special occasions or events Levearing distirbution
channels and brand name
Enhance brand image

21. IMPLEMENTATION
COBRANDING
• Ingrident co-branding with a global coffee roaster (Tchibo,
illy); using their roasted beans to offer premium
products
Ülker has enough experience of co-branding
(Kellogs, Hero)
- Leveraging its brand name and distribution
channels
- Exploiting growing coffee consumption
culture and consumption shift
- Creating premium products

22. IMPLEMENTATION
CUSTOMER CONTACT
• Intense communication with customers
- Creating variety of mugs-
bundle them with products
- Distributing free disposable carton cups
local coffee shops and canteeens
- Providing coffee vending machines canteens,
corner shops and universities
- Organizing youth fest and sport activies
Sponsoring spring fest
- Promoting these activities in social media
and prepare lottories for fee tickets
Levearing distirbution channels
Enchance brand loyalty

23. THANK YOU

24. REFERENCES
• http://www.hurriyet.com.tr/ekonomi/21194049.asp
• http://www.tumgazeteler.com/?a=266420
• Türkiye Tüketici Profili ve Bilinç Seviyesi Araştırması-Mart 2014
www.turkcev.org.tr
• Türkiye Gıda Sektörü Raporu-Temmuz 2010
www.invest.gov.tr
• http://financials.morningstar.com/income-
statement/is.html?t=NSRGY
• http://tr.investing.com/equities/ulker-biskuvi-income-
statement
• http://www.dunya.com/ekonomi/ekonomi-diger/kahve-
pazari-1-milyar-liraya-kosuyor-224966h.htm