1. Executive sum-up In this concern study we are analyzing the concern environment in which our company – BESO and its chief rival – Costa Coffee operate. The chief aim is to research. analyse and understand the competitor’s concern scheme. to happen out if there is a spread in their action program and how we can take advantage of this. The study consists of SWOT analysis of BESO and PEST analysis of both companies. The mark markets of both – BESO and Costa Coffee are similar. That makes the competition between them even bigger.
The study besides discusses the selling attack and the assorted advertisement runs conducted by Costa Coffee and the advertisement techniques we decide to follow in the long tally. The distribution system of Costa Coffee is besides considered and programs to spread out to different locations. The pricing scheme of BESO is based closely to the scheme of Costa Coffee as we have adopted competitory pricing. In footings of ethical issues we examined the assorted types of corporate societal duties of Costa Coffee. 2. Introduction
The concern study includes an analysis of Costa Coffee as a chief rival of BESO Coffee. The study examines the concern environment where both companies operate in. It has been requested from the Marketing Director of BESO and besides has to be focused merely on the UK market. 3. BESO – Brief history BESO Coffee is a java concatenation settled in the UK in 2001. It has been established by an independent bargainer but subsequently on when the concern has grown. new stakeholders appeared. At first BESO’s mark market was limited every bit good as the merchandises it offered- merely a few types of java and limited types of confectionery.
However. merely two old ages after establishing BESO on the market it became popular through different groups of people. therefore the bill of fare became much diversified and the mark market every bit good. BESO has shown great public presentation during the old ages and has become one of the most recognized names on the current market. That is why Costa Coffee is determined as a chief rival of BESO. 4 5 The Marketing Profession 4. SWOT and PEST analysis 4. 1. SWOT analysis Strengths • • • • • Efficient and trained staff Customer trueness Brand acknowledgment High quality java Friendly and loosen uping atmosphere for our clients.
Failings • • • • • • Limited figure of mercantile establishments Low degrees of advertizement Interior design needs updating More scope of the types of java available. Continual alteration in consumer gustatory sensation Can be seen as an unhealthy merchandise Opportunities • Based in Central London which covers a big demographic of clients Olympics 2012 will convey in more gross revenues Introduction of new merchandises including healthy options. Retailing mugs and java equipment Threats • • • • Customers demanding fair-trade and organic java. Big concatenation java stores ruling the market. Economic issues and crisis Lack of ownership of primary resources e. g.
Coffee agriculture. • • • 4. 2. Plague analysis There are many different Political. Economic. Social and Technological issues that both our company and besides Costa Coffee face within the java industry. First. the first political issue to see is that bulk of java beans are brought and made in developing states. so companies need to guarantee that their java is made by fair-trade traders and they need to see the ethical conditions of the labour used. Another political issue includes all the revenue enhancements and duties incurred by any concern operating within the UK. whether it be import duties or VAT on goods sold.
The economic factors that our companies face are similar to the issues faced by many concerns within the whole goods and services market. this including the economic recession of 2008. Customers now have less disposable income to pass and as a consequence cut-down on the buying of non-vital goods. This is due to of unemployment rise and the degrees of debt increasing. The societal factors that need to be taken into consideration is that consumers are passing more money on java due to the demand for choice goods. This can be seen in the comparing of value of tea and java industry with java
valuing at 738 million harmonizing to the Times ( 2008 ) . As a consequence. companies need to guarantee that purchasing java is non merely a speedy purchase. as they need to hold value-added for clients including high quality java and a loosen uping 5 6 The Marketing Profession atmosphere. Last. the technological issues that both our company and Costa face is the debut of self-made place java by the usage of java machines specifically tailored to do at place. for illustration. the Senseo coffee-machines. This can be seen as a menace to coffee stores as it is a inexpensive option for clients in the long tally.
5. Target market Harmonizing to a Mintel study titled “Coffee Shops” published February 2012. “Two tierces of consumers buy java out of place. lifting to three in four among 16-24-year-olds as nucleus users” . Costa Coffee has the highest figure of mercantile establishments within the UK totaled to 1. 302 java store ironss as opposed to Starbucks who has 739 and Caffe Nero with 509 stores. It besides claimed that “Costa has different shop designs to accommodate different intents such as ‘Metro’ which is aimed at the younger/urban consumers and ‘Evolution’ which is designed for more mature clients in provincial locations.
It states its client sections are ‘Recharge. Relax. Refuel’” . Therefore the mark market for Costa Coffee ranges from a broad scope of clients of different ages as it caters to many different demands. Students have been said to do up 30 % of their mark market. Professionals 45 % . Families 10 % and mature consumers 15 % of the patronage. At BESO Coffee. our market we aim to aim at is really broad as it ranges from adolescents to maturate clients. We even target at households as we offer bill of fares for younger kids and parents.
Our merchandises are moderately priced so it can be bought from people of many different income degree groups. from working to upper category. 6. Selling attacks Costa java have used many different selling attacks and runs in order to win within the industry as it is of import to continually update their selling schemes. Costa has introduced runs such as ‘How Do You Like Yours’ . which allowed clients to custom-make their coffee’s by for illustration adding espresso or sirup.
This helps them distinguish themselves from rivals as it gives consumers more power and control over their purchase. Another run introduced by Costa was the reaching of Costa visible radiation in 2011. which offered low-calorie and healthier options to clients. This was an of import measure for Costa as there has been an addition in healthy eating tendencies. which can be seen in the figure below. Figure: Consumer demand for show of Calorie content on restaurant bill of fare. June 2010-December 2011 6 7 The Marketing Profession
Other runs included the launch of Costa Coffee Gift Card in November 2011 which allowed clients to purchase card with pre-paid sums of up to? 75 and a more recent run at the beginning of 2012 when Costa collaborated with the Spirit Pub Company which ensured that Costa java would be used in its eating houses ironss including Chef & A ; Brewer and Flaming grill. Costa has used many signifiers of media to publicize their runs to the populace. One method used to inform clients was through the usage of telecasting advertisement in 2008 whereby Costa launched its first ad.
The advert helped to exemplify the “superiority of Costa’s products” and harmonizing Reynolds ( 2010 ) its message was that “the trade name is on a mission to salvage the universe from second-rate java and seven out of 10 java lovers prefer Costa” . Other signifiers of media used by Costa include Billboards as it can be seen by many commuters within the UK by their usage of large bold authorship and minimum distraction of the chief message. Their hoardings are typical as they have a continual subject coloring material. text and logo. which are recognised by clients.
Our attack to our selling run is to utilize alternate utilizations of media to portray our message. including the usage of the Internet. as it is a popular signifier of media used in today’s society. We aim to utilize Facebook and Twitter to publicize our run and the company as a whole as it covers a big demographic. 7. Distribution scheme Costa operates in the UK through its ain java stores. franchises and sweeping mercantile establishments. On the18th of October 2011. Whitbread stated that the figure of Costa UK shops had risen from 1. 217 in March 2011 to 1. 302 in September 2011. including 95 gaps and ten shop closings.
In comparing. Costa International increased its shops from 654 to 701 during the same period. including 72 gaps and 25 closings. Meanwhile Costa Express/Coffee Nation units increased from 877 in March 2011 to 934 in September 2011. taking history of 79 gaps and 22 closings. These units are partnered with service station operators such as Moto. Esso and Welcome Break. retail merchants like Tesco and The Co-Operative and foodservice group Compass ( Mintel 2012 ) . In a market with low trueness degrees. advertisement and publicity is of import in maintaining trade names in the head of consumers’
heads. Costa Coffee looked to prolong an emotional response among consumers with the selling back uping its launch of Costa Light discrepancy in fall 2011 through an advertisement run that used mottos such as ‘All the love. none of the handles’ and ‘Extra feel good in every cup’ ( Mintel 2012 ) Customers were besides encouraged to see the lighter side of life with its Costa Light Comedy Challenge competition. Costa’s purpose was to showcase energetic comics by inquiring them to subject a one-minute movie via its web site.
A public ballot so saw the top 10 entries from five parts go through to a farther unit of ammunition to be judged during one-off events across the UK. with the run eventually climaxing in two regional victors executing at The Comedy Store. London ( Mintel 2012 ) . Costa Coffee’s distribution system is wide with a balanced portfolio across high streets. retail Parkss. grants. airdromes. rail and other travel hubs every bit good as an increasing figure of shops in new locations such as universities and infirmaries. Advanced distribution channels. such as Costa Express and Drive Thru are developed.
They will widen the brand’s range and increase handiness for the client ( Whitbread. 2010 ) . 7 8 The Marketing Profession Andy Harrison. main executive of Whitbread said that starting out for a java has become a “firm fixture” of peoples’ lives. “Coffee civilization has grown massively over the last five to 10 old ages – people have a existent demand for choice java and a pick of different javas. ” he said. “When I was pull the leg ofing everyone wanted a Nescafe – that has decidedly changed. ” ( The Guardian 2011 ) . 8. Pricing scheme
Costa Coffee is a well-known. high valued and trusted cafeteria all over the universe. They offer broad scope of high qualitative java drinks and nutrient. excellent services and loosen uping atmosphere. Costa relies on their high qualities and offer relatively higher monetary values because they have realized that the luxury comes with the monetary value. Costa Coffee offers two sizes of drinks – medium and big and the monetary value difference between them is non important. In this manner they encourage their clients to purchase the bigger size. because the sum of the drink is bigger and is on about the same monetary value as the medium one.
But even the medium size of cappuccino is served in a cup with the size of soup bowl. so Costa Coffee has a ground to bear down a comparatively higher monetary value because of the value they give. even though in most instances clients do non necessitate such a large sum of drink although they have to pay for it. In this manner. Costa is able to sell cheaper java to regular clients. who are cognizant of the sum of the drink ( with elastic demand ) and sell more expensive java to infrequent visitants. therefore the cafeteria makes large net income from each cup of java.
This is the corporate scheme and how Costa found a manner to bear down relatively higher monetary values than most of their rivals. This scheme has some disadvantages and menaces such as the present recognition crunch. which might impact the gross revenues and the budget of Costa Coffee as they target in-between and upper in-between category. hence in the clip of recession clients may prefer some of the cheaper rivals. 9.
Pricing scheme that we will follow – competition based pricing scheme One of the biggest advantages of the ”Competition based pricing strategy” is that in the same clip you are focused on your concern and aims and on the competition’s schemes. Once you understand what the competition is making. you have the opportunity to make everything better and to derive a competitory advantage ( Jobber 2008 ) . therefore to increase the figure of clients and to derive bigger market portion.
There are three types on competition based pricing methods: • • • Price your merchandise the same as the rival Set your monetary value to increase client base Seek larger market portion through monetary value Compared to Costa Coffee we are reasonably new to the market so it would be more appropriate for BESO to follow the ”Competition based pricing” as a scheme that will let us to turn fast as competitory trade name. In order to accomplish biggest consequences we will match/mix the three competition-based pricing methods.
BESO will offer similar merchandises as/like the Costa’s merchandises but on lower monetary values. hence BESO’s market section must ever be cognizant of what the competition is offering in order to supply better value for money. In this manner BESO will has the chance to sketch its advantages as comparing similar merchandises as those of the competition but on lower monetary values ( even pence ) . Once clients understand our precedences they will utilize to come to BESO as a topographic point. which offers better value for money. 8 9 The Marketing Profession
therefore we will increase our market portion ( Palmer and Hartley 2006 ) . In footings of increasing client base. the procedure is similar to market incursion. we have to choose a monetary value that will crush the competition and making that we will actuate client to detect our merchandises and to do a purchase determination. Market incursion pricing works good in the debut phase of the merchandise life rhythm and in a extremely competitory market. as you increase the production some of your costs will diminish. During the following phases of the merchandise life rhythm the monetary value can be increased ( Jobber 2010 ) .
The easiest manner to increase the market portion of BESO is to choose monetary values that will pull and keep as many clients as possible ( depend on mark ) . It is recommended to follow the ”Market – portion pricing” after the concern achieved market incursion. because they are linked as the market portion happens when big volume of merchandises are sold. So it is better if things happen measure by measure. And eventually the market portion is calculated by spliting the sum of each company sells out of the entire market and in this manner the market leader is determined.
9. 1. Disadvantages of ”Competition based pricing” • • • There is a danger to disregard your ain production cost if you focus excessively closely on the competitors’ monetary values. It takes more clip to research and update competitors’ information. Rivals besides can copy whatever monetary value you select. 10. Customer service Loyalty is peculiarly low in the java store market. doing client keeping a cardinal country of betterment traveling frontward ( Mintel 2012 ) . At the start of 2012 Costa Coffee launched the ‘Just How Do You Like Yours? ’ run.
It aims to foreground the customizable elements of its merchandises. a cardinal discriminator to its lower-priced non-specialist rivals such as EAT and Pret A Manger. A clear pricing scheme was besides included in order to appeal to consumer’s sense of value for money. For illustration. clients can now add an excess shooting of espresso or sugar-free syrup shootings to their drinks for 35p per unit. Besides. in 2011 Costa Coffee launched gift cards ( Mintel 2012 ) . Although consumers province that convenient location is more of import to them than the trade name of java concatenation. operators can still capture consumers’ attending through qualities other than monetary value.
For illustration. two in three users think that quality is the most of import decision-making factor when taking where to purchase hot drinks. whilst about half disagree that they normally choose the cheapest locale. However. with so many trade names merchandising off of a quality placement. operators have to guarantee that they are distinguishing themselves on extra degrees. hence the tendency towards lifestyle branding in the wider eating out market ( Mintel 2012 ) . Costa Coffee’s repute for excellence applies non merely for the exceeding java but besides the insisting on perfect service.
“Recruiting and retaining extremely motivated and talented people is indispensable and great accent is placed on bettering the accomplishments. expertness and 9 10 The Marketing Profession public presentation of our people through award winning. industry-leading preparation and developing programs” ( Mintel 2012 ) . 11. Costa Coffee’s attitude towards environmental issues Consumers are highly careful about environmental issues. seeking to purchase environmentally friendly nutrient and drinks. Most of the clients feel that it is their responsibility to salvage the environment in order to populate healthier.
That is why most companies are under a batch of force per unit area to alter their attitude towards the environment most frequently related to greener. packaging solutions. recycling and many others. Costa Coffee is the first UK java concatenation purchasing beans from Rainforest Alliance Certified™ farms. From October last twelvemonth. about 100 % of the java beans for Mocha Italia blend are from certified sustainable farms. Costa Coffee is besides a member of UK Paper Cup Recycling Committee. their cups are made from sustainable beginnings and that’s saves about 1. 100 trees a twelvemonth.
The ingredients from which the cups are made of are all from iconic reclaimable stuff and are made utilizing merely certified sustainable mush. Vegetable Costa Coffee is besides concerned about its coffee-growers and in 2006 it registered a Costa Foundation. covering with the betterment of the public assistance of coffee-growing topographic points like Colombia. Costa Rica. Ethiopia. Guatemala. Uganda and Vietnam. Costa Coffee is besides a spouse with Cafechurch web. back uping local community. The organisation trades with environmental issues. just trade. divorce and emphasis jobs and others.
Peoples are experiencing good. being portion of a great ambiance. unrecorded music. good communicating. and a batch of interviews. holding the chance to understand more about the Costa Coffee Foundations. 12. The competitor’s CSR activity Costa Coffee is non accomplishing basic criterion of Corporate Social Responsibility ( CSR ) . The java company does non give a specific information for the C footmark. Its environmental informations is portion of the environmental informations of its parent company-Whitbread. 13. What is your attitude to CSR/environmental issues traveling to be?
The purposes that Costa Coffee manages to make are quite a batch. Some of the first 1s are: • • • • Developing Costa Coffee’s energy & A ; environmental scheme. Pull offing C coverage and guaranting conformity for CRC. Keeping the ISO50001 system. Working with manufacturer’s waste contractors and NGO to better takeaway cup recycling. 10 11 • • The Marketing Profession Developing Costa Good Together CR programme. By 2012/13 Costa Coffee aims to assist 15. 000. supplying them entree to instruction. That mark will assist to convey together the communities. assisting grownups to happen occupations and trades.
The java concatenation purpose is to raise? 750. 000 entirely during 2012/13. Costa Coffee will seek to give Energy & A ; Environment Manager in Costa Coffee. That will be utile. seeking to see more control and to form the best structured program for the company. Costa’s composition board cups are non reclaimable. even though the composition board can be recycled. The other ingredient in the composition board cups. the ink and the gum. can non be recycled. The mark environmental program of Costa Coffee is to utilize vegetable ink and degradable gum on its cups.
Costa Coffee is raising money to construct schools in parts where a batch of java farms take topographic point. There are already 22 schools in developing states. That makes a large difference for a batch of immature people who have the chance to analyze. Costa Foundation is besides taking attention for the addendum of particular healthy alimentary repasts and laptops for the kids. • • • 14. Decision Based on the researches and analysis that have been done BESO has a great potency to utilize Costa’s disadvantages and to change over them into our chances for prosperity.
Offering similar merchandises as those of Costa Coffee but on lower monetary values and in the same clip establishing our ain merchandises ( BESO’s cupcakes ) is a good scheme to derive a competitory advantage. Little alterations in the interior design of our cafeteria would be reviewing and a good manner to pull new clients. Furthermore increasing our advertisement activities would be an chance to remind our clients and in the same clip to inform our new possible clients about BESO’s antic services and great value for money. 15.
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