'Costa Coffee Essay\r'

'1. executive summary In this p arntage report we argon analysing the intersectionion line environs in which our political party †BESO and its main competitor †costa hot chocolate operate. The main heading is to research, analyse and understand the competitor’s trading strategy, to find out if there is a curtain raising in their action plan and how we plunder grapple benefit of this. The report consists of SWOT abbreviation of BESO and gent analysis of both companies. The train pabulumstuffplaces of both †BESO and costa beverageing chocolate atomic number 18 similar. That betrays the controversy between them level(p) large.\r\nThe report similarly discusses the merchandise approach and the various(a) publicize c deoxyadenosine monophosphateaigns conducted by costa C arrive atee and the advertising techniques we decide to get in the long run. The dispersal system of rib coffee tree is in any case considered and plans to hyp erbolise to unalike locations. The set strategy of BESO is based virtu all toldy to the strategy of costa coffee as we overhear driveed combative pricing. In terms of estimable issues we examined the various types of corporate social responsibilities of costa cocoa. 2. Introduction.\r\nThe channel report includes an analysis of rib Coffee as a main competitor of BESO Coffee. The report examines the seam environment where both companies operate in. It has been requested from the merchandising Director of BESO and also has to be foc apply sole(prenominal) on the UK securities indus fork out. 3. BESO †Brief history BESO Coffee is a burnt umber scope settled in the UK in 2001. It has been established by an independent trader just right off later on when the business has prominent, new stakeholders appe ard. At first BESO’s target grocery was check as well as the proceedss it offered- only a few types of coffee tree and limited types of confectionary.\ r\nHowever, only twain years after launchinging BESO on the mart it became popular with different groups of people, thereof the card became much diversified and the target merchandise as well. BESO has shown with child(p) murder during the years and has become star of the most recognized names on the legitimate food market. That is why rib Coffee is determined as a main competitor of BESO. 4 5 The merchandising avocation 4. SWOT and PEST analysis 4. 1. SWOT analysis Strengths • • • • • Efficient and trained cater Customer devotion station recognition laid-back calibre coffee Friendly and relaxing automatic teller for our customers.\r\nWeaknesses • • • • • • Limited number of outlets Low levels of advertisement home(a) design fates updating More go of the types of coffee available. Continual change in consumer taste perception Can be seen as an un legal product Opportunities • Based in Centra l London which covers a king- sized demographic of customers Olympics 2012 de variance bring in much sales Introduction of new products including healthy options. Retailing mugs and coffee equipment Threats • • • • Customers demanding fair-trade and organic coffee. Big chain coffee workshops dominating the market. Economic issues and crisis Lack of self-control of primary resources e. g.\r\nCoffee farming. • • • 4. 2. PEST analysis on that point ar some different Political, Economic, Social and technical issues that both our company and also rib Coffee facial gesture at bottom the coffee industry. Firstly, the first policy-making issue to consider is that majority of coffee beans ar brought and make in growth countries, so companies invite to ensure that their coffee is made by fair-trade dealers and they bespeak to consider the ethical conditions of the labor drug ab affair. some other political issue includes all the taxe s and tariffs incurred by any business operating within the UK, whether it be import tariffs or VAT on goods sold.\r\nThe economic factors that our companies face be similar to the issues faced by umteen businesses within the whole goods and run market, this including the economic recession of 2008. Customers now sustain less disposable income to spend and as a result cut-down on the purchasing of non-vital goods. This is receivable to of unemployment salary subjoin and the levels of debt increasing. The social factors that need to be taken into consideration is that consumers argon spending more bills on coffee due to the demand for quality goods.\r\nThis can be seen in the comparison of observe of tea and coffee industry with coffee valuing at 738 million according to the Times (2008). As a result, companies need to ensure that bribeing coffee is not only a quick purchase, as they need to have value-added for customers including high quality coffee and a relaxing 5 6 Th e cheating Profession atmosphere.\r\nLastly, the technological issues that both our company and rib face is the introduction of self-made home coffee by the use of coffee machines specifically tailored to get under ones skin at home, for example, the Senseo coffee-machines. This can be seen as a threat to coffee shops as it is a cheaper shootion for customers in the long run.\r\n5. Target market jibe to a Mintel report titled â€Å"Coffee Shops” publish February 2012, â€Å"Two thirds of consumers debauch coffee out of home, rising to ternary in four among 16-24-year-olds as pith users”. costa Coffee has the highest number of outlets within the UK add up to 1,302 coffee shop chains as unlike to Starbucks who has 739 and Caffe Nero with 509 shops. It also claimed that â€Å" costa has different throw in designs to cause different purposes much(prenominal)(prenominal)(prenominal)(prenominal) as ‘Metro’ which is aimed at the one-year-older/ urban consumers and ‘Evolution’ which is designed for more mature customers in provincial locations.\r\nIt states its customer segments are ‘Recharge, Relax, Refuel’”. Therefore the target market for Costa Coffee passs from a childlike range of customers of different ages as it caters to some(prenominal) different needs. Students have been express to make up 30% of their target market, Professionals 45%, Families 10% and mature consumers 15% of the clientele. At BESO Coffee, our market we aim to target at is very wide as it ranges from teenagers to mature customers. We even target at families as we offer menus for younger children and parents.\r\nOur products are middling wrongd so it can be bought from people of many different income level groups, from working to upper class. 6. Marketing approaches Costa coffee have used many different marketing approaches and black markets in local anaestheticize to acquire within the industry as it is im portant to continually update their marketing strategies. Costa has introduced campaigns such as ‘How Do You Like Yours’, which allowed customers to customize their coffee’s by for example adding espresso or syrup.\r\nThis helps them differentiate themselves from competitors as it gives consumers more power and control over their purchase. Another campaign introduced by Costa was the arrival of Costa light in 2011, which offered low- calorie and healthier options to customers. This was an important abuse for Costa as there has been an increase in healthy eating trends, which can be seen in the figure below. Figure: Consumer demand for display of calorie content on restaurant menus, June 2010-December 2011 6 7 The Marketing Profession.\r\nOther campaigns include the launch of Costa Coffee Gift Card in November 2011 which allowed customers to buy card with pre-paid sums of up to ? 75 and a more recent campaign at the beginning of 2012 when Costa collaborated with the Spirit Pub Company which ensured that Costa coffee would be used in its restaurants chains including Chef & Brewer and Flaming grill. Costa has used many forms of media to advertise their campaigns to the public. 1 method used to set forth customers was done the use of television advertising in 2008 whereby Costa launched its first ad.\r\nThe advert helped to illustrate the â€Å" transcendency of Costa’s products” and according Reynolds (2010) its message was that â€Å"the nock is on a mission to save the cosmea from mediocre coffee and seven out of 10 coffee lovers elect Costa”. Other forms of media used by Costa include Billboards as it can be seen by many commuters within the UK by their use of big bold writing and borderline distraction of the main message. Their billboards are distinctive as they have a continual theme colour, textual matter and logo, which are recognised by customers.\r\nOur approach to our marketing campaign is to use a lternative uses of media to portray our message, including the use of the Internet, as it is a popular form of media used in today’s society. We aim to use Facebook and Twitter to advertise our campaign and the company as a whole as it covers a large demographic. 7. Distri hardlyion strategy Costa operates in the UK through its own coffee shops, franchises and wholesale outlets. On the18th of October 2011, Whitbread express that the number of Costa UK stores had risen from 1,217 in ring 2011 to 1,302 in September 2011, including 95 openings and ten store closures.\r\nIn comparison, Costa International increased its stores from 654 to 701 during the similar period, including 72 openings and 25 closures. Meanwhile Costa put forward/Coffee Nation units increased from 877 in establish 2011 to 934 in September 2011, taking account of 79 openings and 22 closures. These units are partnered with service station operators such as Moto, Esso and Welcome Break, retailers like Tesco and The Co-Operative and foodservice group savvy (Mintel 2012). In a market with low loyalty levels, advertising and promotion is important in belongings brands in the forefront of consumers’ minds.\r\nCosta Coffee looked to wield an emotional response among consumers with the marketing supporting its launch of Costa Light variant in descent 2011 through an advertising campaign that used slogans such as ‘All the love, none of the handles’ and ‘Extra detect good in every cup’ (Mintel 2012) Customers were also encouraged to see the lighter side of disembodied spirit with its Costa Light Comedy Challenge contention. Costa’s aim was to showcase up-and-coming comedians by asking them to submit a one-minute film via its website.\r\nA public vote then saw the crystalise ten entries from five regions go through to a further round to be judged during one-off events across the UK, with the campaign in the long run culminating in two regional wi nners do at The Comedy Store, London (Mintel 2012). Costa Coffee’s distribution system is broad with a balanced portfolio across high streets, retail parks, concessions, airports, rail off and other travel hubs as well as an increasing number of stores in new locations such as universities and hospitals. Innovative distribution channels, such as Costa Express and Drive Thru are developed.\r\nThey will extend the brand’s reach and increase accessibility for the customer (Whitbread, 2010). 7 8 The Marketing Profession Andy Harrison, chief executive of Whitbread said that tonic out for a coffee has become a â€Å"firm fixture” of peoples’ lives. â€Å"Coffee culture has call downn massively over the last five to 10 years †people have a very demand for quality coffee and a quality of different coffees,” he said. â€Å"When I was kid everyone wanted a Nescafe †that has definitely changed. ” (The Guardian 2011). 8. Pricing strateg y.\r\nCosta Coffee is a well-known, high valued and bank cafeteria all over the world. They offer wide range of high qualitative coffee drinks and food, excellent services and relaxing atmosphere. Costa relies on their superiorities and offer relatively higher(prenominal) termss because they have realized that the luxury comes with the monetary value. Costa Coffee offers two sizes of drinks †modal(a) and large and the price difference between them is not significant. In this management they encourage their customers to buy the bigger size, because the criterion of the drink is bigger and is on or so the similar price as the medium one.\r\nBut even the medium size of cappuccino is served in a cup with the size of soup bowl, so Costa Coffee has a reason to charge a relatively higher price because of the value they give, even though in most cases customers do not need such a big amount of drink although they have to pay for it. In this way, Costa is able to sell cheaper c offee to regular customers, who are aware of the amount of the drink (with elastic demand) and sell more dearly-won coffee to infrequent visitors, therefore the cafeteria makes big clear from each cup of coffee.\r\nThis is the corporate strategy and how Costa found a way to charge comparatively higher prices than most of their competitors. This strategy has some disadvantages and threats such as the present credit crunch, which might affect the sales and the budget of Costa Coffee as they target middle and upper middle class, therefore in the conviction of recession customers may prefer some of the cheaper competitors. 9.\r\nPricing strategy that we will admit †competition based pricing strategy One of the biggest advantages of the ” opposition based pricing strategy” is that in the same conviction you are focused on your business and objectives and on the competition’s strategies. erst you understand what the competition is doing, you have the chance to do everything damp and to gain a competitive advantage (Jobber 2008), therefore to increase the number of customers and to gain bigger market grapple.\r\nThere are three types on competition based pricing methods: • • • Price your product the same as the competitor Set your price to increase customer base Seek larger market share through price Compared to Costa Coffee we are fairly new to the market so it would be more appropriate for BESO to adopt the ”Competition based pricing” as a strategy that will allow us to grow fast as competitive brand. In order to achieve biggest results we will match/mix the three competition-based pricing methods.\r\nBESO will offer similar products as/like the Costa’s products but on lower prices, therefore BESO’s market part must always be aware of what the competition is offering in order to provide better value for money. In this way BESO will has the opportunity to outline its advantages as compar ing similar products as those of the competition but on lower prices (even pence). at one time customers understand our priorities they will use to come to BESO as a place, which offers better value for money, 8 9 The Marketing Profession.\r\ntherefore we will increase our market share (Palmer and Hartley 2006). In terms of increasing customer base, the process is similar to market penetration, we have to select a price that will beat the competition and doing that we will motivate customer to notice our products and to make a purchase decision. Market penetration pricing works well in the introduction exhibit of the product life cycle and in a passing competitive market, as you increase the output signal some of your costs will decrease. During the next stages of the product life cycle the price can be increased (Jobber 2010).\r\nThe easiest way to increase the market share of BESO is to select prices that will deplumate and hold as many customers as possible (depend on target ). It is recommended to adopt the ”Market †share pricing” after the business achieved market penetration, because they are linked as the market share happens when large volume of products are sold. So it is better if things happen step by step. And finally the market share is calculated by dividing the amount of each company sells out of the total market and in this way the market leader is determined.\r\n9. 1. Disadvantages of ”Competition based pricing” • • • There is a insecurity to ignore your own production cost if you focus too closely on the competitors’ prices. It takes more time to research and update competitors’ information. Competitors also can sham whatever price you select. 10. Customer service faithfulness is particularly low in the coffee shop market, making customer retention a draw area of receipts departure forward (Mintel 2012). At the start of 2012 Costa Coffee launched the ‘Just How Do You Like Yours? ’ campaign.\r\nIt aims to highlight the customizable elements of its products, a key differentiator to its lower-priced non- special(a)ist competitors such as EAT and Pret A Manger. A clear pricing strategy was also included in order to appeal to consumer’s grit of value for money. For example, customers can now add an plain shot of espresso or sugar-free syrup shots to their drinks for 35p per unit. Also, in 2011 Costa Coffee launched gift cards (Mintel 2012). Although consumers state that snug location is more important to them than the brand of coffee chain, operators can still capture consumers’ attention through qualities other than price.\r\nFor example, two in three users guess that quality is the most important decision-making factor when choosing where to buy hot drinks, whilst nearly half disagree that they normally choose the cheapest venue. However, with so many brands trading off of a quality positioning, operators have to ensure t hat they are differentiating themselves on additional levels, hence the trend towards modus vivendi branding in the wider eating out market (Mintel 2012). Costa Coffee’s reputation for probity applies not only for the exceptional coffee but also the insistence on perfect service.\r\nâ€Å"Recruiting and retaining highly motivated and talented people is essential and extensive emphasis is placed on improving the skills, expertness and 9 10 The Marketing Profession performance of our people through award winning, industry-leading training and developing programs” (Mintel 2012). 11. Costa Coffee’s attitude towards environmental issues Consumers are extremely careful roughly environmental issues, move to buy environmentally friendly food and drinks. Most of the customers feel that it is their duty to save the environment in order to live healthier.\r\nThat is why most companies are under a lot of printing press to change their attitude towards the environment m ost very much related to greener, packaging solutions, recycling and many others. Costa Coffee is the first UK coffee chain acquire beans from Rainforest Alliance Certifiedâ„¢ farms. From October last year, almost 100% of the coffee beans for Mocha Italia blend are from certified sustainable farms. Costa Coffee is also a member of UK Paper Cup cycle Committee, their cups are made from sustainable sources and that’s saves closely 1,100 trees a year.\r\nThe ingredients from which the cups are made of are all from iconic recyclable material and are made using only certified sustainable pulp. veggie Costa Coffee is also concerned about(predicate) its coffee-growers and in 2006 it registered a Costa radix, dealing with the improvement of the welfare of coffee-growing places like Colombia, Costa Rica, Ethiopia, Guatemala, Uganda and Vietnam. Costa Coffee is also a partner with Cafechurch network, supporting local community. The organization deals with environmental issue s, fair trade, divorce and try on problems and others.\r\nPeople are feeling well, being part of a great atmosphere, live music, good communication, and a lot of interviews, having the opportunity to understand more about the Costa Coffee Foundations. 12. The competitor’s CSR practise Costa Coffee is not achieving basic exemplification of Corporate Social Responsibility (CSR). The coffee company does not give a specific information for the carbon footprint. Its environmental data is part of the environmental data of its parent company-Whitbread. 13. What is your attitude to CSR/environmental issues going to be?\r\nThe aims that Costa Coffee manages to do are quite a lot. Some of the first ones are: • • • • Developing Costa Coffee’s nil & environmental strategy. Managing carbon reporting and ensuring conformance for CRC. Maintaining the ISO50001 system. Working with manufacturer’s waste contractors and nongovernmental organizatio n to improve takeaway cup recycling. 10 11 • • The Marketing Profession Developing Costa dangerous Together CR programme . By 2012/13 Costa Coffee aims to help 15, 000, providing them access to education. That target will help to bring together the communities, fate adults to find jobs and trades.\r\nThe coffee chain aim is to conjure ? 750,000 alone during 2012/13. Costa Coffee will try to dedicate push button & Environment managing director in Costa Coffee. That will be useful, trying to insure more control and to organize the trump out structured plan for the company. Costa’s artificial cups are not recyclable, even though the artificial can be recycled. The other ingredient in the cardboard cups, the ink and the glue, cannot be recycled. The target environmental plan of Costa Coffee is to use vegetable ink and degradable glue on its cups.\r\nCosta Coffee is raising money to build schools in regions where a lot of coffee farms take place. There are already 22 schools in developing countries. That makes a big difference for a lot of young people who have the opportunity to study. Costa Foundation is also taking care for the supplement of special healthy nutritious meals and laptops for the children. • • • 14. Conclusion Based on the researches and analysis that have been done BESO has a great potential to use Costa’s disadvantages and to switch them into our opportunities for prosperity.\r\nOffering similar products as those of Costa Coffee but on lower prices and in the same time launching our own products (BESO’s cupcakes) is a good strategy to gain a competitive advantage. Slight changes in the interior design of our cafeteria would be refreshing and a good way to attract new customers. Furthermore increasing our advertising activities would be an opportunity to remind our customers and in the same time to inform our new potential customers about BESO’s fantastic services and great valu e for money.\r\n15. References baker S. (2003), New Consumer Marketing, West Sussex, John Wiley & Sons Ltd cooper D., Schindler P. (2011), Business Research Methods, New York, McGraw †Hill grooming Economics Help (2008), Costa Coffee UK and gross sales Techniques. Available at: http://econ. economicshelp. org/2008/08/costa-coffee-uk-and-sales-techniques. html [Accessed: 20th sue 2012].\r\nGovernment of Alberta (2012), Methods to Price Your Products. Available at: http://www1. agric. gov. ab. ca/$department/deptdocs. nsf/all/agdex1133#competition [Accessed: 20th blemish 2012] Jobber D. (2010), Principles and Practice of Marketing, London, McGraw †Hill Education 11 12\r\nThe Marketing Profession Kotler P. , Armstrong G. (2006), Principles of Marketing, The United States of America, subroutine library of Congress Cataloging-in-Publication Data LinkedIn (2011), Costa Coffee Energy and Environment Manager at Whitbread. Available at: http://uk. linkedin. com/pub/ollie -rosevear/14/672/948 [Accessed: 20th certify 2012] Mintel (2012), Brand Communication and Promotion. Available at: http://academic. mintel. com/sinatra/oxygen_academic/search_results/show&/display/id=59 0036/display/id=611992#hit1 [Accessed: 20th March 2012] Mintel.\r\n'