Postum is a trademark and trade secret of Eliza's Quest Food, a North Carolina, U.S., LLC. First launched in 1895 as a non-caffeinated coffee alternative by Postum Cereal Company,  the formulation was created by C.W. Post and later sold to General Foods in 1929. In 2007, the brand was discontinued when Kraft acquired Postum from General Foods. Postum lovers responded with a "passionate campaign to bring back our Postum using online petitions, blogs, and websites to gain support. Their voices were heard" (Postum.com). In 2012, the coffee substitute, Postum, was purchased by Eliza's Quest Foods, owned by two long-time Postum users. Postum's modest suite of products includes an instant, powdered grain format in three flavors: original (roasted wheat bran, wheat, and molasses), coffee-flavored, and cocoa-flavored. The brand is marketed using the following claims: organic, fairly traded, vegan, kosher, all-natural, and fair traded. The product is offered in seven- and eight-ounce jars and can be consumed warm or chilled. Postum may have benefited early from first-mover status. However, it has declined in revenue from the latest available Nielsen measure, $6.6 million in 1995, to $900 thousand in  2016 (Buzzfile). Postum has since been flanked by a phalanx of large and small natural beverage competitors, non-caffeinated herbal teas, and the high-growth ready to drink (RTD) coffee market, promoting a myriad of better-for-you beverage options. Postum must make a  strategic decision. Should the company invest in Research and Development and launch new products and brands into a larger, growing, and more lucrative market or stay positioned in the coffee substitute market by taking the costs out of their value chain to become the low-cost provider? 

Keywords: coffee substitute, all-natural, ready-to-drink, better-for-you, strategic options. Copyright statement: Authors retain the copyright to the manuscripts published in AABRI  journals. Please see the AABRI Copyright Policy at http://www.aabri.com/copyright.html.

Eliza's Quest Food is a privately-held company with six employees. It is owned and managed by June Rust, President, and Dayle Rust, two long-time Postum users who grew up with the brand and appreciate the emotional connection Postum has with its loyal base. June Rust has a Master of Arts in Education from East Carolina University. A VP with a vast retail and food service sales background was recently hired. A 2,530-square-foot facility modernization has been completed in anticipation of growth due to approved applicant distribution of the points for new distribution points and favorable shelf placement. Since 2012, the management team at Eliza's Quest Foods has worked to develop packaging, warehousing, and shipping, as well as directly selling/distributing Postum to distribution companies, individual grocery stores, and health food stores, managing online sales to individual consumers. In 2017, Postum leadership worked with Long Island University Post and LIU IQ Consulting's student consulting team to develop a marketing plan. LIU IQ promotes advancing business knowledge and judgment among preeminent students, companies, and universities. The students benefit from exposure to professional business cases. Companies benefit from divergent thinking, dynamic problem solving, and an opportunity for new talent hiring. The final presentation from the team of students was well received by Postum leadership; it included recommendations for further distribution, a new product, packaging and labeling, marketing, advertising, and social media. 

The coffee substitute market was $7.5 million in 1995 (Elliot, 1995). Nielsen further reported that Postum had a significant 87.7% share of the coffee substitute market 52 weeks ending 12/10/1995. The advertising agency, Foote Cone Belding/Leber Katz Partners, General Foods/Kraft agency of record, was charged with creating the Postum comeback campaign delivering print, radio, recipes, and coupons to targeted consumers 55+ using the "truly soothing hot beverage" campaign. The year-long campaign reportedly represented $984 thousand (Elliott, 1995).  

The competitive set in the coffee substitute market consists of Postum, Capomo,  Ayurvedic Roast, Roma, Cafix, Pero, Beyond Coffee, Inka, and Teeccino, as ranked on AAmazon.com's"The 10 Best Coffee Substitutes" (Dvoretz, 2017). 

A growth market to examine is instant coffee. Postum fits into the instant coffee arena because it can be served instantly and is agglomerated. According to Globe Newswire (2017): "Instant coffee has gained significant popularity among consumers due to its convenience in terms of time and preparation. The easy availability of instant coffee across various channels and its lower price versus ground coffee have contributed to its rising popularity. The CAGR for instant coffee is projected at 4.8% ($28 billion in  2016 and $43 Billion by the end of 2025. (as indicated in Table 1) Postum's product is in  the agglomerated (instant) form and can well tap into the market attribute of convenience." However, Postum has no cost advantage compared to the best-selling brands. (as indicated in Table 2) 

The RTD segment grew by +6.5% from 2014-2015 (Beverage Marketing Group, 2016). Mintel estimates that the segment will continue to grow through 2020. (2017) (as indicated in  Table 3). There is trending market potential in the beverage category within the younger demographic as they prefer the RTD segment of the industry. Prominent beverage manufacturers/marketers are competing in the RTD market bolstered by the twin trends of on-the-go, health, and wellness. In contrast, the caffeinated market remains large and tends to attract the older demographic. (as indicated in Table 4) According to a 2016 US IbisWorld Beverage Study, age is an essential factor in consumers' choice of caffeinated beverage. The youngest consumers (under 18) cited carbonated soft drinks and tea as providing greater caffeine, whereas the oldest consumers (50-64) preferred coffee. (as indicated in Table 5) The CEO of PepsiCo, who organized a better-for-you segment of competitive entries for her company, stated that soft drinks are a "thing of the past" and that RTD bottled tea will be a sales driver for the company in the future (Berry, 2016). 

Both large and small beverage manufacturers are responding to the better-for-you and  RTD market potential with products and packaging that meet consumers' demands by communicating stories of purpose, ingredients, and function (Berry, 2016). Claims include natural ingredients, no artificial colors or flavors, no sugar, vitamins, minerals, protein, fiber,  antioxidants, plant extracts, prebiotics, and probiotics. Non-GMO consumers recognize the value of buying products that are not potentially unstable to the food supply. Non-GMO sales exceeded $10 billion last year. (as indicated in Table 6) According to Mintel (2016), when purchasing nutritional and performance drinks, the most critical factors for U.S. consumers are favorite flavor (41%), amount of protein (40%), and high fiber (33%). 

New entrants are touting artisanal brews, indulgent flavors, better-for-you formulations, cold brew technology, energy inducement, herb and vitamin enrichments, and no or low sugar (Food Beverage News, 2018). Based on the total rush to fragmentation and a now crowded segment, consumers may begin to take on a high engagement/high abandonment mentality. A projectable segmentation study of the RTD and functional beverage segments may lead manufacturers to their most profitable opportunities.

Postum attempts to engage current consumers using a nostalgic platform with copy harkening the reader back in time: "Postum. The Hot Beverage with Warm Memories," "Rich  Tradition," "A Stroll Down Memory Lane," "#WholesomePostum," and photography from years past. The emotional benefit appears as one of sentimental longing and happy associations. The brand name and old-fashioned label work to preserve this emotional tie and to allow connection to those loyal to the brand years past. The functional benefit appears to be twofold:  wholesomeness and a contrast to the experience of coffee jitters. There is a nominal following on  Postum social channels (Facebook, Instagram, Twitter, and Pinterest), perhaps suggesting that an older demographic does not consume social media.  

PRICINGIf the leadership of Postum desires future revenue growth, the question is, what is their path to the future: New markets? New brands? New target age groups? Product development? New alliances and distribution (K-cups)? New imagery, including brand influencers? The challenge is to investigate what consumers value in a non-caffeinated, non-alcoholic, warm, or cold beverage or develop a new brand that better resonates with younger consumers.RESEARCH AND DEVELOPMENT (R&D) 

Postum's dedication and investment in R&D must be significant if it decides on a  differentiation strategy to broaden its line. If, on the other hand, it opts to compete in its current product and packaging in the coffee substitute market, it may become obsolete. 

3DWooW Technology Co., Ltd (3DWooW) is a professional 3D image content supplier founded in 2015 by Li Gangyue. The company is based in Shanghai, China, at the National  Public Pilot Base for Entrepreneurs, one of the country’s most prominent incubators. 3DWooW  focuses on one-stop solutions for film and television series, medical images, commercials, and corporate image displays. The company boasts a patent in the self-developed Pixel and Depth  Auto-Retrieval Technology (PADART), which is able to convert the video signals shot by the common single camera into vivid 3D equivalents. The company is establishing itself as the thought leader in virtual reality, augmented reality, 3D content production, and technological innovation. 3DWooW flourished in the National Public Pilot Base for Entrepreneurs (the incubator). The incubator boosts a 50.5% success rate, and 618 of the 1,224 startups grew to become full-fledged enterprises. Due to a $ 1 billion investment from the government, 3DWooW was able to take advantage of human resources and social public space. 3DWoow was able to successfully soft launch its business by focusing on the movie and film industry. However, given the expected growth of other segments and future market challenges, Mr. Li Gangyue and his executive team are interested in identifying its most lucrative direction to scale the company for rapid growth and first-mover advantage. 

Keywords: 3D Technology, Virtual Reality, Augmented Reality, Incubator, Technological  Change

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3DWooW is a professional 3D image content supplier that focuses on one-stop solutions for films and television series, medical images, commercials, and corporate image displays. It is one of the few companies equipped with the most vanguard graphic processing workstations and a non-linear editing system (NLE) with patented technology. The Pixel and Depth Auto-Retrieval  Technology (PADART) can be seen as a milestone in relieving the pressure caused by inadequate video sources, high production costs, and long working periods. The company developed a disruptive technology based on intellectual graphic algorithms and created the 3D  element natural alignment that has been proven an effective replacement for manual frame-by-frame retouching. The new technology allows for a zero-step delamination transition from 2D to  3D signals, applicable to any films or telefilms available now. 

The company has expanded over the last few years. The team grew from two founders to sixteen employees. In addition, they have attracted experts with more than 30 years of experience in a variety of fields, including film and television special effects, animation CG integration,  Ph.D. experts in the field, and talented marketers. The company has substantially benefited from these experts due to their familiarity with both domestic and international experience. The company structure today has grown into five major departments; R&D, HR, Marketing, Sales,  and Finance. 

3DWooW has been acknowledged as one of the market leaders with potential applications in a variety of segments: 

✔ Visual tracking, virtual interaction, real-time 3D modeling, multi-thread rendering,  psychology of vision, overcoming motion sickness, and 360° immersive image syntheses.  

✔ Technical support for online interactions such as content transmission, displaying, and 3D  bullet screens (words, cartoons, or images). 

✔ Comprehensive support for 3D displaying and broadcasting, including 3D cartoons, 3D  screen production and syntheses. 

✔ 3D contents produced/transited by 3D element natural alignment compatible with almost  any 3D-embedded displayers. 

✔ With the application of self-developed mathematics modules and exclusive algorithms,  pixels of the original images are enhanced simultaneously during the process of being transited from 2D to 3D, thus bringing spectacular visual effects. 

In 2017, Li Gangyue and the management team evaluated the possibility of expanding the business and using its state-of-the-art technology to enter the medical market, specifically in minimally invasive operation display. 3DWooW teamed up with International Consulting Group  (“ICON”) to analyze the probable path to success in entering this market.

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The global 3D medical imaging segment is growing exponentially, as indicated in figure 1  (Appendix). The segment includes applications in movies, design, healthcare, entertainment,  defense, manufacturing, and construction. In 2014, The global 3D medical imaging segment was valued at $3.5 billion. By 2021, the market is expected to reach $18 billion. 3D Imaging in healthcare has a compound annual growth rate of 26.8%. When examining the 3D imaging by region, North America has the highest current market share of 49%. This dominates the other regions, Asia Pacific at 20%, Europe at 26%, and ROW (rest of the world) at 5%. Asia Pacific is the fastest-growing market consisting of electronics, healthcare equipment, and industrial equipment,  with a compound annual growth rate of 28%.  

The 3D movie segment is mature and highly concentrated. The major players in this segment are NBC Universal, Sony, Time Warner, Walt Disney, and FOX. The 3D movie segment revenue was $6.2 billion in 2016. Although the industry’s current decline experienced in recent years is -0.9%, the future projection turns positive with a +2.2% annual growth rate by  2020. The disruption is being caused by players such as Netflix and Hulu’s consumers opting to stream video from home versus going to theaters or facing the lack of 3D capabilities in most televisions. 

The global television segment has a fragmented market of new and old players. The projection of the television segment has growth leading to $16 billion in revenue by 2020. More specifically, the movie segment currently has $6.2B in revenue, with revenue expected to increase, as indicated in figure 2 (Appendix). At-home streaming boosts home viewing, making this segment a growth market with emerging players. Projections find that younger generations prefer cord-cutters, defined as getting rid of landline phones. The penetration stands at 76% of households now have streaming technology. Of these subscribers, 57 million are in the United  States. As the popularity of Netflix's streaming service has increased, the company has seen its DVD segment decline. Having reached 5 million subscribers in the 3-month period ending in  June 2018, Netflix has reached 130 million streaming subscribers worldwide. 

The global 3D gaming segment has grown +7.8%, with $108.9 billion in revenue as of  2016. Gaming revenues today are up across the world, and future projections estimate that this segment will grow to $128.5 billion by 2020. This industry is fragmented and may sustain a  disruption from casual games to mobile. This means games are being played across multiple different technologies.

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The 3D Gaming Industry is expected to grow from its current revenue of $108.9B to  $128.5B, as indicated in figure 3 (Appendix). 

The global medical imaging segment was valued at $28 billion in 2015. The 3D  Healthcare device segment is a niche yet to be further developed. There are a number of new players in the segment bringing disruptive technologies to the industries, but there is no dominant established player within the 3D technology when compared to the movie and gaming segments. 

The Medical Imaging Technology Segment is extremely attractive, with signs of potential applications for 3D Technology even though most of the imaging systems still use traditional 2D  technology, as indicated in figure 4 (Appendix). From an equipment/device perspective, the segment can be divided between diagnostic imaging and image-assisted surgery. Potential applications for 3D technology in diagnostic imaging include nuclear imaging equipment,  magnetic resonance equipment, computer tomography scanners, and ultrasound systems.  Although X-ray devices are a part of this segment, X-ray is the only imaging technique that still works with single images, while CT (computed tomography) makes use of several x-ray image slices. Consequently, 3D applications could be integrated with CT rather than X-ray. 

In image-assisted surgery, there is a potential for further development in the segment by applying technology to convert 2D images in real time to 3D images. This technology would allow the traditional endoscopic providers to launch new equipment that will significantly increase the image precision of minimum invasive surgeries and, as a result, dramatically increase the procedure success rates. 3DWoow has this technology fully developed. 

The global endoscopy device market was valued at $30 billion in 2015 and is projected to be valued at $41.8 billion in 2020 at a 6% compound annual growth rate. China’s endoscopy device segment is showing rapid growth of $640 million within five years, with a compound annual growth rate of 6% from 2014 to 2019. The rapid growth of the Chinese endoscopy segment makes it attractive for new companies and technologies. Factors driving the market for endoscopy devices include the increase in the aging population, reduced healthcare costs, improved patient quality of life, technological advances, and the use of minimally invasive procedures, as indicated in figure 5 (Appendix).  

The increase in the aging population is one of the major drivers for the Chinese endoscopy device segment. Population data shows that from 2000-2030, the 65+ population will grow exponentially, while the younger 20-24-year-old population will increase only slightly. According to Statista, in 2016, China’s 15-64 years old age group consisted of 72.5% of the population, and the 65+ age group stood at only 10.8% of the population. These statistics show that since the current 65+ age group percentage is quite low, there is room for growth in the upcoming years.  

3DWoow was able to successfully soft launch its business by focusing on the movie and film industry. However, given the expected minimal growth of this segment, +2.2% by 2020, and future market challenges, top management is discussing if other segments will better provide rapid growth and first mover advantage. 

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1. ICON is a student-run, global consultancy that bridges interdisciplinary college students to real-life projects with companies in various industries and countries. ICON has operations in the United States, China, Sweden, Israel, Mexico, South Korea,  Switzerland, and Brazil. This consultancy was based on Long Island University POST  led by Professor Graziela Fusaro.  

2. Jonathan Lieberz and Samantha Piccolo, business majors at LIU, served as ICON  consultants throughout this project. We thank them for their contributions to this paper.

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