Costa Coffee Essay

1. Executive summary In this line reveal we ar analysing the business sur numberings in which our confederation BESO and its master(prenominal) rivalry costa umber race. The main middling game is to look, analyse and understand the enemys business schema, to find give a path if in that location is a gap in their doing plan and how we arsehole take reinforcement of this. The spread over consists of devise psychoanalysis of BESO and swearword analysis of twain companies. The localise groceryplaces of both BESO and rib chocolate be kindred. That postulates the controversy between them flat large.The report excessively discusses the marting undertake and the various publicise ladders conducted by rib deep br feature and the ad techniques we decide to simulate in the commodious run. The diffusion dodge of rib hot chocolate is in any case work outed and plans to expand to diametrical locations. The determine dodging of BESO is base near to the strategy of rib cocoa as we induce adopted competitive price. In footing of ethical issues we examined the various types of corporate kind responsibilities of rib burnt umber. 2. IntroductionThe business report includes an analysis of rib coffee as a main competitor of BESO chocolate. The report examines the business surroundings where both companies operate in. It has been requested from the merchandising Director of BESO and too has to be foc apply solely when on the UK merchandise. 3. BESO Brief history BESO burnt umber is a deep br give birth grasp settled in the UK in 2001. It has been established by an freelance trader but later on when the business has bragging(a), novel stakeholders appe ard. At initiatory BESOs score market was modified as well as the products it offered- only a few types of burnt umber and limited types of confectionary.However, only devil geezerhood after shewing BESO on the market it became hot through variant gr oups of mass, thence the bill became much diversified and the target market as well. BESO has shown great performance during the years and has be obtain one of the most k in a flash names on the current market. That is wherefore costa coffee is determined as a main competitor of BESO. 4 5 The merchandising professing 4. SWOT and PEST analysis 4. 1. SWOT analysis Strengths Efficient and trained staff node loyalty Brand recognition blue look burnt umber Friendly and reposeful atmosphere for our guests.Weaknesses Limited number of outlets measly levels of advertisement Interior design require updating More clip of the types of chocolate available. Continual change in consumer judge Can be seen as an varicose product Opportunities establish in primeval London which covers a large demographic of customers Olympics 2012 leave behind bring in much sales Introduction of new products including effectual options. Retailing mugs and chocolate equipment Thr eats Customers demanding fair-trade and organic coffee. bigger chain coffee shops dominating the market. scotch issues and crisis Lack of ownership of primary resources e. g. chocolate farming. 4. 2. PEST analysis There be numerous diverse Political, Economic, Social and technical issues that both our fellowship and alike rib coffee bean see within the coffee effort. Firstly, the primaryly political issue to con officer is that majority of coffee beans argon brought and do in develop countries, so companies consume to ensure that their coffee is make by fair-trade dealers and they quest to consider the ethical conditions of the perseverance apply. An divergent political issue includes entirely the taxes and tariffs incurred by any business direct within the UK, whether it be import tariffs or VAT on bullys sold.The economic factors that our companies represent atomic number 18 similar to the issues faced by many a(prenominal) businesses within the w hole goods and run market, this including the economic recession of 2008. Customers now slang less disposable income to spend and as a result cut-down on the get of non-vital goods. This is due to of unemployment rising and the levels of debt change magnitude. The social factors that accept to be taken into consideration is that consumers be spending more bullion on coffee due to the demand for woodland goods. This foot be seen in the similarity of quantify of tea and coffee fabrication with coffeevaluing at 738 million gibe to the Times (2008). As a result, companies bring to ensure that purchaseing coffee is not only a quick purchase, as they need to need take to be-added for customers including high feature coffee and a relaxing 5 6 The Marketing Profession atmosphere. Lastly, the scientific issues that both our confederacy and rib face is the introduction of self-made home coffee by the utilise of coffee machines unique(predicate) ally tailored to make at home, for example, the Senseo coffee-machines. This fanny be seen as a flagellum to coffee shops as it is a cheaper alternating(a) for customers in the long run.5. Target market According to a Mintel report name Coffee Shops published February 2012, Two thirds of consumers defile coffee out of home, rising to terzetto in four among 16-24-year-olds as means mappingrs. 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 to a fault cl guideed that Costa has different store designs to suit different purposes such as Metro which is puzzleed at the younger/urban consumers and Evolution which is designed for more shape up customers in idyll locations.It states its customer segments argon Re perpetrate, Relax, Refuel. therefrom the target market for Costa Coffee ranges from a colossal range of customers of different ages as it caters to many different needs. Stude nts consider been said 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 develop 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 rises.Our products argon reasonably worthd so it can be bought from people of many different income level groups, from working to upper class. 6. Marketing approaches Costa coffee come used many different marketing approaches and forces in order to succeed within the industry as it is significant to continually update their marketing strategies. Costa has introduced campaigns such as How Do You Like Yours, which al subalterned customers to customize their coffees by for example adding espresso or syrup.This helps them differentiate themselves from competitors as it gives consumers more index and control over their purchase. Another campaign introduced by Costa was the arrival of Costa light in 2011, which offered low- large calorie and healthier options to customers. This was an grievous step for Costa as there has been an growing in healthy feeding trends, which can be seen in the enrol below. Figure Consumer demand for display of calorie content on restaurant menus, June 2010-December 2011 6 7 The Marketing Professionformer(a) campaigns include the launch of Costa Coffee Gift Card in November 2011 which stomached customers to acquire card with pre-paid substances of up to ? 75 and a more recent campaign at the beginning of 2012 when Costa collaborated with the Spirit barroom Company which ensured that Costa coffee would be used in its restaurants chains including Chef & beer maker and Flaming grill. Costa has used many forms of media to advertise their campaigns to the public. One method used to claim customers was through the use of tv advertising in 2008 whereby Costa launched its first ad.The advert helped to illustrate th e superiority of Costas products and according Reynolds (2010) its message was that the bulls eye is on a mission to still the world from mediocre coffee and 7 out of 10 coffee lovers privilege 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 rough writing and minimal distraction of the main message. Their billboards are distinctive as they entrance a continual theme colour, schoolbook and logo, which are recognised by customers.Our approach to our marketing campaign is to use alternate 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 company 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 verbalise that the number of Costa UK stores had risen from 1,217 in shew 2011 to 1,302 in September 2011, including 95 openings and ten store closures.In comparison, Costa International increased its stores from 654 to 701 during the said(prenominal) period, including 72 openings and 25 closures. Meanwhile Costa impart/Coffee Nation units increased from 877 in March 2011 to 934 in September 2011, pickings account of 79 openings and 22 closures. These units are partnered with service of process station operators such as Moto, Esso and Welcome Break, retailers like Tesco and The Co-Operative and foodservice group chain of mountains (Mintel 2012). In a market with low loyalty levels, advertising and promotion is important in keeping trade names in the headspring of consumersminds. Costa Coffee looked to sustain an ruttish response among consumers with the marketing sustenance its launch of Costa Light variant in autumn 2011 through an advertising campaign that used slogans such as e very the love, none of the handles and Extra feel good in every instill (Mintel 2012) Customers were alike encouraged to see the lighter side of flavor with its Costa Light comedy Challenge ambition. Costas aim was to showcase up-and-coming comedians by asking them to submit a one-minute film via its website.A public vote then see the top ten entries from atomic number 23 regions go through to a further round to be judged during one-off events across the UK, with the campaign in conclusion culminating in two regional winners do at The Comedy Store, London (Mintel 2012). Costa Coffees distribution system is broad with a balanced portfolio across high streets, retail parks, concessions, airports, rail and other travel hubs as well as an increase number of stores in new locations such as universities and hospitals. Innovative distribution channels, such as Costa testify and Drive Thru are developed.They impart volunteer the brands reach and increase accessibility for the customer (Whitbread, 2010). 7 8 The Marketing Profession Andy Harrison, chief executive director of Whitbread said that popping out for a coffee has become a rigid fixture of peoples lives. Coffee culture has grown massively over the last five to 10 years people brook a real demand for forest coffee and a choice of different coffees, he said. When I was kid everyone treasured a Nescafe that has definitely changed. (The Guardian 2011). 8. charge strategyCosta Coffee is a well-known, high valued and trusted cafeteria all over the world. They offer wide range of high qualitative coffee drinks and food, sensitive services and relaxing atmosphere. Costa relies on their superiorities and offer comparatively higher termss because they have realized that the luxury comes with the legal injury. Costa Coffee offers two sizes of drinks strength and large and the impairment difference between them is not significant. In this federal agency they encourage their customers to purc hase the bigger size, because the tally of the drink is bigger and is on almost the same price as the medium one.But even the medium size of cappuccino is served in a cupful 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 charge, Costa is able to sell cheaper coffee to regular customers, who are aware of the amount of the drink (with elastic demand) and sell more expensive coffee to infrequent visitors, thereof the cafeteria makes big profit from each cup of coffee.This is the corporate strategy and how Costa tack a way to charge comparatively higher prices than most of their competitors. This strategy has approximately dis melioratements and threats such as the present quotation crunch, which might affect the sales and the work out of Costa Coffee as they target middle and upper mid dle class, therefrom in the time of recession customers whitethorn prefer some of the cheaper competitors. 9.Pricing strategy that we will adopt contestation base pricing strategy One of the biggest advantages of the opposition based pricing strategy is that in the same time you are concentrate on your business and objectives and on the controversys strategies. at one time you understand what the aspiration is doing, you have the chance to do everything divulge and to hold a competitive advantage (Jobber 2008), therefore to increase the number of customers and to gain bigger market appoint.There are ternion types on disputation based pricing methods Price your product the same as the competitor Set your price to increase customer base search 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 compet itive brand. In order to succeed biggest results we will 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 mustiness always be aware of what the competition is offering in order to lead 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 Professiontherefore we will increase our market share (Palmer and Hartley 2006). In terms of increasing customer base, the process is similar to market keenness, we have to withdraw 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 i ntroduction stage of the product life cycle and in a passing competitive market, as you increase the product some of your costs will decrease. During the bordering 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 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.9. 1. Disadvantages of Competition based pricing There is a danger to ignore your own payoff cost if you focus too closely on the competitors prices. It takes more time to research and update competito rs information. Competitors in addition can write whatever price you select. 10. Customer service Loyalty is particularly low in the coffee shop market, making customer retention a key arena of improvement going forward (Mintel 2012). At the start of 2012 Costa Coffee launched the beneficial How Do You Like Yours? campaign.It aims to highlight the customizable elements of its products, a key differentiator to its lower-priced non- pickyist competitors such as EAT and Pret A Manger. A open 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 pleasant 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 tint is the most important decision-making factor when choosing where to buy hot drinks, whilst nearly half disaccord 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 differentiating themselves on additional levels, hence the trend towards modus vivendi 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 perfect service.Recruiting and retaining exceedingly motivated and talented people is substantive and great emphasis 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 military position towards environmental issues Consumers are extremely awake about environmental issues, trying to buy environmen tally friendly food and drinks. nearly 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 clustering of pressure to change their military posture towards the environment most often colligate to greener, packaging solutions, recycling and many others. Costa Coffee is the first UK coffee chain buying beans from Rainforest Alliance qualified farms. From October last year, almost 100% of the coffee beans for Mocha Italia blend are from demonstrate sustainable farms. Costa Coffee is also a member of UK Paper form 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 recyclable 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 well-being 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 issues, fair trade, divorce and stress problems and others.People 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 competitors CSR activity Costa Coffee is not achieving basic standard of collective Social Responsibility (CSR). The coffee company does not give a specific data for the light speed 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 lot. Some of the first ones are Developing Costa Coffees energy & environmental strategy. Manag ing carbon reporting and ensuring compliance for CRC. Maintaining the ISO50001 system. Working with makers waste contractors and NGO to improve takeaway cup recycling. 10 11 The Marketing Profession Developing Costa Good Together CR political program . By 2012/13 Costa Coffee aims to help 15, 000, providing them access to education. That target will help to bring together 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 zip fastener & Environment Manager in Costa Coffee. That will be useful, trying to meet more control and to organize the trump structured plan for the company. Costas artificial 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 raising m oney 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 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. lissome 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 BESOs fantastic services and great value for money. 15.References Baker S. 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