Costa Coffee Essay

1. Executive summary In this contrast reputation we be analysing the line of commendation environment in which our comp each BESO and its briny foe costa chocolate tree tree operate. The main objective is to research, analyse and understand the enemys business schema, to find out if there is a intermission in their action plan and how we wad cover advantage of this. The depict consists of SWOT digest of BESO and gent analysis of both companies. The identify marts of both BESO and costa chocolate ar similar. That makes the rivalry between them withal large.The give notice (of) alike discusses the commercialiseing approach and the motley advertising endeavors conducted by costa java and the advertising techniques we decide to adopt in the long run. The dissemination system of rib burnt umber is also considered and plans to expand to different locations. The determine strategy of BESO is based closely to the strategy of costa cocoa as we read adopted war-ridden pricing. In terms of nigh issues we examined the various types of corporate social responsibilities of rib umber. 2. induction.The business report all toldow ins an analysis of costa Coffee as a main contention of BESO Coffee. The report examines the business environment where both companies operate in. It has been requested from the trade Director of BESO and also has to be foc employ exclusively on the UK merchandise. 3. BESO Brief history BESO Coffee is a hot chocolate grasp settled in the UK in 2001. It has been naturalized by an independent trader but later on when the business has grown, new stakeholders appe bed. At depression BESOs target securities industry was control as well as the products it offered- only a few types of java and limited types of confectionary.However, only two long cartridge clip after instauration BESO on the commercialise it became touristed by different groups of people, therefore the menu became untold di versified and the target market as well. BESO has shown great performance during the years and has become one of the most(prenominal) recognized names on the trustworthy market. That is why costa Coffee is determined as a main competitor of BESO. 4 5 The Marketing Profession 4. SWOT and PEST analysis 4. 1. SWOT analysis Strengths Efficient and trained staff client loyalty Brand recognition High quality coffee companionable and reposeful atmosphere for our nodes.Weaknesses Limited moment of outlets Low takes of advertisement inner(a) design chooses updating More range of the types of coffee available. continuous change in consumer taste Can be seen as an flatulent product Opportunities Based in Central London which covers a sizable demographic of customers Olympics 2012 leave unaccompanied bring in more sales Introduction of new products including healthy options. Retailing mugs and coffee equipment Threats Customers demanding fair-trade and organic cof fee. Big chain coffee gloms dominating the market. Economic issues and crisis Lack of ownership of primary resources e. g.Coffee farming. 4. 2. PEST analysis There are some different Political, Economic, cordial and Technological issues that both our fel unhopefulship and also rib Coffee give at heart the coffee industry. Firstly, the first political issue to consider is that bulk of coffee beans are brought and made in evolution countries, so companies need to hold that their coffee is made by fair-trade dealers and they need to consider the ethical conditions of the labor personad. Another political issue includes all the taxes and tariffs incurred by any business operating within the UK, whether it be import tariffs or bathing tub on goods sold.The economic factors that our companies face are similar to the issues faced by many businesses within the safe and sound goods and work market, this including the economic recession of 2008. Customers at one magazine have less disposable income to spend and as a result cut-down on the purchasing of non-vital goods. This is due to of unemployment rising and the levels of debt increase. The social factors that need to be taken into consideration is that consumers are spending more money on coffee due to the demand for quality goods.This po tennertiometer be seen in the comparison of value of tea and coffee industry with coffee valuing at 738 million according to the Times (2008). As a result, companies need to ensure that buying coffee is not only a quick bribe, as they need to have value- channeled for customers including high quality coffee and a relaxing 5 6 The Marketing Profession atmosphere.Lastly, the technological issues that both our political party and rib face is the entre of self-made home coffee by the work of coffee machines specifically tailored to make at home, for example, the Senseo coffee-machines. This can be seen as a threat to coffee shops as it is a cheaper alternative for customers in the long run.5. Target market According to a Mintel report titled Coffee Shops published February 2012, Two thirds of consumers buy coffee out of home, rising to cardinal in four among 16-24-year-olds as hollow out users. costa Coffee has the highest number of outlets within the UK totaled to 1,302 coffee shop chains as opposed to Starbucks who has 739 and Caffe Nero with 509 shops. It also cl nonplused that Costa has different shop designs to suit different purposes such as Metro which is use uped at the young/urban consumers and Evolution which is designed for more mature customers in barbarian locations.It states its customer segments are Re chill, Relax, Refuel. Therefore the target market for Costa Coffee ranges from a wide range of customers of different ages as it caters to many different needs. Students have been utter to make up 30% of their target market, Professionals 45%, Families 10% and mature consumers 15% of the clientele. At BESO Coffee, our mar ket 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.Our products are clean priced 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 campaigns in rescript to succeed within the industry as it is all important(predicate) to continually update their marketing strategies. Costa has introduced campaigns such as How Do You Like Yours, which allowed customers to customize their coffees by for example adding espresso or syrup.This helps them differentiate themselves from competitors as it gives consumers more spring and control over their purchase. Another campaign introduced by Costa was the comer of Costa light in 2011, which offered low-gram calorie and healthier options to customers. This was an important step 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. otherwise campaigns included the launch of Costa Coffee Gift Card in November 2011 which allowed customers to buy card with pre-paid meats of up to ? 75 and a more young campaign at the beginning of 2012 when Costa collaborated with the Spirit Pub companionship 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. One method acting used to inform customers was through the use of television advertising in 2008 whereby Costa launched its first ad.The advert helped to illustrate the superiority of Costas products and according Reynolds (2010) its message was that the brand is on a mission to notwithstanding the world from mediocre coffee and seven out of 10 coffee lovers prefer 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 minimal distraction of the main message. Their billboards are distinctive as they have a continual melodic theme colour, text and logo, which are recognised by customers.Our approach to our marketing campaign is to use alternative uses of media to portray our message, including the use of the Internet, as it is a popular form of media used in todays society. We aim to use Facebook and Twitter to advertise our campaign and the social club as a whole as it covers a large demographic. 7. Distribution strategy Costa operates in the UK through its own coffee shops, franchises and wholesale outlets. On the18th of October 2011, Whitbread stated that the number of Costa UK stores had risen from 1,217 in exhibit 2011 to 1,302 in September 2011, including 95 openings and ten store closures.In comparison, Cos ta International increased its stores from 654 to 701 during the corresponding period, including 72 openings and 25 closures. Meanwhile Costa Express/Coffee soil units increased from 877 in March 2011 to 934 in September 2011, taking neb 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 Compass (Mintel 2012). In a market with low loyalty levels, advertising and promotion is important in charge brands in the forefront of consumers minds.Costa Coffee looked to sustain an emotional retort among consumers with the marketing supporting its launch of Costa Light variant in autumn 2011 through an advertising campaign that used slogans such as All the love, none of the handles and Extra feel good in every shape (Mintel 2012) Customers were also encouraged to see the lighter side of vivification with its Costa Light Comedy Challenge competitor. Costas aim was to showcase up-and-coming comedians by asking them to submit a one-minute exposure via its website.A public vote then saw the top ten entries from five regions go through to a further round to be judged during one-off events across the UK, with the campaign finally culminating in two regional winners acting at The Comedy Store, London (Mintel 2012). Costa Coffees scattering system is broad with a balanced portfolio across high streets, retail parks, concessions, airports, rail and other travel hubs as well as an change magnitude number of stores in new locations such as universities and hospitals. Innovative dissemination channels, such as Costa Express and Drive Thru are developed.They provide extend the brands reach and increase accessibility for the customer (Whitbread, 2010). 7 8 The Marketing Profession Andy Harrison, chief executive of Whitbread said that popping out for a coffee has become a unwavering fixture of peoples lives. Coffee culture has grown massively over the utmost five to 10 years people have a received demand for quality coffee and a choice of different coffees, he said. When I was kid everyone wanted a Nescafe that has definitely changed. (The Guardian 2011). 8. set strategy.Costa Coffee is a well-known, high valued and trusted cafeteria all over the world. They offer wide range of high qualitative coffee dr signs and food, excellent services and relaxing atmosphere. Costa relies on their superiorities and offer comparatively high prices because they have realized that the luxury comes with the price. Costa Coffee offers two sizings of drinks medium and large and the price difference between them is not significant. In this focus they encourage their customers to buy the bigger size, because the amount of the drink is bigger and is on almost the same price as the medium one. barely 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 rel atively 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 coffee to regular customers, who are aware of the amount of the drink (with e outliveic demand) and sell more expensive coffee to strange visitors, therefore the cafeteria makes big profit from each cup of coffee.This 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 time of recession customers may prefer some of the cheaper competitors. 9.Pricing strategy that we go forth adopt competition based pricing strategy One of the biggest advantages of the contender based pricing strategy is that in the same ti me you are focused on your business and objectives and on the competitions strategies. at once you understand what the competition is doing, you have the chance to do everything better and to fool a competitive advantage (Jobber 2008), therefore to increase the number of customers and to foregather bigger market theatrical role.There are three types on competition based pricing methods Price your product the same as the competitor Set your price to increase customer base Seek bigger market share through price Compared to Costa Coffee we are fairly new to the market so it would be more admit for BESO to adopt the Competition based pricing as a strategy that pull up stakes allow us to grow fast as competitive brand. In order to achieve biggest results we volition match/mix the three competition-based pricing methods.BESO will offer similar products as/like the Costas products but on lower prices, therefore BESOs market department must always be aware of what the competition is pass in order to provide better value for money. In this way BESO will has the opportunity to outline its advantages as comparing similar products as those of the competition but on lower prices (even pence). Once 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.therefore 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 stage of the product life cycle and in a highly competitive market, as you increase the production some of your costs will decrease. During the next stages of the product life cycle the price can be increased (Jobber 2010).The easiest way to increase the market share of BESO is to select prices that will attract 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 glitz 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 draw is determined.9. 1. Disadvantages of Competition based pricing There is a danger to skip 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 counterpart whatever price you select. 10. Customer service Loyalty is particularly low in the coffee shop market, making customer retention a key area of improvement going forward (Mintel 2012). At the dismount of 2012 Costa Coffee launched the J ust How Do You Like Yours? campaign.It aims to highlight the customizable elements of its products, a key differentiator to its lower-priced non-specialist competitors such as EAT and Pret A Manger. A clear pricing strategy was also included in order to appeal to consumers sense of value for money. For example, customers can now add an extra 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 convenient location is more important to them than the brand of coffee chain, operators can still capture consumers attention through qualities other than price.For example, two in three users think that quality is the most important decision-making factor when choosing where to buy hot drinks, whilst nearly half differ that they usually choose the cheapest venue. However, with so many brands trading off of a quality positioning, operators have to ensure that they are differenti ating themselves on additional levels, thence the trend towards lifestyle branding in the wider eating out market (Mintel 2012). Costa Coffees reputation for excellence applies not only for the exceptional coffee but also the insistence on thoroughgoing(a) service.Recruiting and retaining highly motivated and talented people is essential and great tension is placed on improving the skills, expertise and 9 10 The Marketing Profession performance of our people through award winning, industry-leading training and developing programs (Mintel 2012). 11. Costa Coffees attitude towards environmental issues Consumers are super careful intimately environmental issues, trying to buy environmentally genial food and drinks. Most of the customers feel that it is their duty to save the environment in order to live healthier.That is why most companies are under a lot of pressure to change their attitude towards the environment most oft related to greener, packaging solutions, recycling and many others. Costa Coffee is the first UK coffee chain buying beans from Rainforest Alliance Certified farms. From October last year, almost 100% of the coffee beans for Mocha Italia blend are from informed sustainable farms. Costa Coffee is also a member of UK theme Cup Recycling Committee, their cups are made from sustainable sources and thats saves about 1,100 trees a year.The ingredients from which the cups are made of are all from iconic utile material and are made using only certified sustainable pulp. Vegetable Costa Coffee is also concerned about its coffee-growers and in 2006 it registered a Costa Foundation, 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 topical anesthetic community. The organization deals with environmental issues, fair trade, divorce and stress problems and others.People are feeling well, being p art 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 competitors CSR activity Costa Coffee is not achieving basic standard of Corporate Social Responsibility (CSR). The coffee company does not give a specific data 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?The aims that Costa Coffee manages to do are quite a a lot. Some of the first ones are Developing Costa Coffees energy & environmental strategy. Managing carbon reporting and ensuring compliance for CRC. Maintaining the ISO50001 system. working(a) with manufacturers waste contractors and NGO to improve takeaway cup recycling. 10 11 The Marketing Profession Developing Costa level-headed Together CR programme . By 2012/13 Costa Coffee aims to help 15, 000, providing them a ccess to education. That target will help to bring unitedly the communities, helping adults to find jobs and trades.The coffee chain aim is to raise ? 750,000 alone during 2012/13. Costa Coffee will try to dedicate Energy & surround music director in Costa Coffee. That will be useful, trying to check off more control and to organize the best structured plan for the company. Costas cardboard cups are not recyclable, even though the cardboard 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.Costa Coffee is heave 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 auxiliary 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 Costas disadvantages and to convert them into our opportunities for prosperity.Offering similar products as those of Costa Coffee but on lower prices and in the same time launching our own products (BESOs cupcakes) is a good strategy to gain a competitive advantage. Slight changes in the interior design of our cafeteria would be brush up 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 BESOs fantastic services and great value for money.15. References Baker S. (2003), New Consumer Marketing, West Sussex, John Wiley & Sons Ltd barrel maker D., Schindler P. (2011), Business Research Methods, New York, McGraw hammock Education Economics garter (2008), Costa Coffee UK and Sales Techniques. Available at http //econ. economicshelp. org/2008/08/costa-coffee-uk-and-sales-techniques. html Accessed twentieth March 2012.Government of Alberta (2012), Methods to Price Your Products. Available at http//www1. agric. gov. ab. ca/$department/deptdocs. nsf/all/agdex1133competition Accessed 20th March 2012 Jobber D. (2010), Principles and Practice of Marketing, London, McGraw Hill Education 11 12The Marketing Profession Kotler P. , Armstrong G. (2006), Principles of Marketing, The United States of America, depository 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 March 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=611992hit1 Accessed 20th March 2012 Mintel.