Practice Of Marketing Formative Assignment Ryan Yung
This essay aims to discuss the questions regarding Jobber's case study 7, known as the cappuccino wars. The first factor contributing to the success of these coffee chains is their strong branding. Starbucks has gained a great reputation in the USA, and this positive perception has also extended to the public in the UK. The same can be said for Nero and Costa. Additionally, these chains introduce elements of American culture into the UK.
In 1997, there were only 49 Seattle Coffee shops. However, Starbucks, Costa, Nero and Coffee Republic have also entered the market since then, resulting in a notable growth of coffee shops. Moreover, this industry has introduced a new market for individuals to indulge in coffee. These establishments provide a pleasant aroma and a calm ambiance, serving as a necessary bre
...ak for people between their homes and work or school. Additionally, the significance of the coffee's quality is often underestimated.
Coffee has several advantages, such as soothing the nerves, heating up the body, being a suitable choice after a meal, and providing alertness. The presence of numerous coffee shops promotes the consumption of coffee among consumers, who can joyfully buy it there. If Starbucks and other coffee bars exclusively offered coffee, I would not opt to visit them due to my personal dislike for coffee and preference for tea and other cold drinks. Nevertheless, since these establishments offer an extensive selection of products, including my favorite beverage - the Frappuccino - I would consider going to a coffee bar in order to acquire it.
Before progressing to the next phase, it is essential to contemplate whether this is genuinely
a requirement as opposed to a longing. Personally, I value meeting necessities above fulfilling desires. For me, indulging in a refreshing beverage holds great significance as it invigorates me. I can confidently assert that I am hooked on cold drinks, just like how others are hooked on coffee. Consequently, my necessity is recognized, marking the initial step in my decision-making process. Following that, I would proceed with conducting research and evaluating alternative choices. Are there any other possibilities accessible to quench my yearning for a Frappuccino?
Maybe buying a bottle of coke from Tesco could suffice my craving for 'cold drinks' or do I require something more than just a coke? If I only have one pound in my wallet, I would likely opt for the coke, as there is an economic limitation preventing me from purchasing the desired product. Conversely, if I possess 100 pounds, it seems reasonable that a cup of Frappuccino would be within reach. By incorporating Microeconomics theories, with a lower budget constraint resulting from increased income, my desire for luxury goods will amplify.
So, I would opt for a pricier option, the Frap, as it appeals to me more. Another factor to consider is motivation. How does this Frap fulfill my needs and desires? It seems that it satisfies my psychological cravings, quenching my thirst and addiction. However, when it comes to selecting a coffee shop, another aspect comes into play. Both my colleagues and I perceive a cup of Frap from Starbucks as superior compared to one from Cafe Aroma. Additionally, if I have a lesson to attend shortly after purchasing, displaying the Starbucks logo on the side of the Frap
would be preferable.
By being able to afford more, I would receive recognition from others and be seen as a wealthier student by my colleagues. This would fulfill my Esteem needs and lead me to choose Starbucks over other options. This preference for Starbucks is connected to Social class and Social influence. Opting for Starbucks would increase my social status and contribute to the stratification of me in the culture based on income. Because of this, I am more inclined to select Starbucks, a coffee shop with a higher cost.
In regards to situational influence, it is challenging to conveniently access a Starbucks coffee shop since the closest one is in Middlesbrough. In this situation, I would choose Cafe Aroma as it is the nearest coffee shop to my location at 3, First of all let’s Identify the competitors of Starbucks. Cafe Nero and Costa Coffee are direct competitors as they offer similar products and attract similar customers. All three establishments provide coffee and a cozy atmosphere for their patrons. Supermarkets that offer alternative drinks to quench customer thirst could be considered indirect competitors.
Product competitors include McDonalds, which offers a similar product but primarily caters to hungry visitors. Following that, we can analyze Starbucks' objectives, strengths, weaknesses, and potential actions. Despite having over 800 Costa Coffee and 400 Cafe Nero shops, Starbucks still has room for improvement to become the market leader. I believe there are six key factors that can be used to analyze them: innovativeness, financial strength, product quality, customer relations, a skilled workforce, and access to international distribution channels.
Costa has a strong retail presence and is highly regarded for its value, convenience, and diverse
product offerings. However, its empire control is weak and it operates in relatively few countries worldwide. Despite this, Costa has surpassed Starbucks in the number of stores and continues to grow through acquisitions and mergers with other coffee companies. As it expands, I believe Costa will focus more on the China and India markets. Likewise, Nero offers the best quality out of the three brands and provides relatively affordable coffee, making it a better option for those seeking value for their money.
One of the main advantages of Nero is its affordable prices and high-quality coffee. Additionally, Nero provides a loyalty card program where customers receive a free cup of coffee after purchasing 10 cups. However, Nero's weaknesses include expensive and limited Wi-fi services and a less elegant aroma. Meanwhile, McDonald's is now offering comparable products at lower prices, potentially drawing customers away from Starbucks through its McCafe offerings. Furthermore, McDonald's expansion into similar locations poses a significant threat to Starbucks, as customers can easily choose the cheaper option if they want to enjoy affordable coffee.
Starbucks can gain a competitive advantage by differentiating their product offering to provide customer value or by focusing on lowest delivered costs. They have chosen a differentiation strategy by promoting the unique 'as you like it' Frappuccino. Starbucks has invested heavily in an advertising campaign and has experienced great success with this personalized product. Customers can now customize their own Frappuccino to meet their individual needs, giving Starbucks a competitive edge that is currently unmatched.
McDonalds is focusing on creating warm and inviting interiors for McCafe stores, but customers' main concerns are often related to hygiene, facilities, and the availability of flexible
seating. Therefore, it is important for Starbucks to allocate more resources towards maintaining the highest standards of hygiene. In particularly busy stores, replacing large sofas with tables and chairs could potentially increase the number of seats. By achieving the lowest cost position in the industry, Starbucks could also improve its overall performance.
Currently, Starbucks has the highest prices compared to Costa Coffee and Nero Coffee. If Starbucks is able to match or surpass the prices of its competitors, it could become the industry's cost leader. However, this may result in lower profit margins despite potentially higher sales. Additionally, there are various locations where coffee bars can meet customer demands. For instance, coffee bars could be situated near school areas to target student customers. These establishments offer a pleasant environment for students seeking a relaxed atmosphere to socialize with friends or study.
The Opposite Cafe in Leeds is a thriving establishment known for its trendy, welcoming, and cozy atmosphere, particularly popular among students. The cafe's convenient location opposite Leeds University makes it a go-to spot for many. This concept could also be implemented in hospitals, offering patients a separate space from their ward to socialize with visitors while enjoying a cup of coffee and rejuvenating themselves. Additionally, it would serve as a more comfortable waiting area for visitors of patients, rather than the traditional reception setting. Another noteworthy example is the Starbucks store in Bicester Outlet, which consistently experiences high levels of activity.
The text suggests that Costa coffee shops offer a convenient space for shoppers to rest or take a break. This could be particularly beneficial in train stations, where customers waiting for their next connecting train could
use it as a waiting area. Costa coffee is frequently found in train stations and often offers better coffee and food than what is provided on the train. Many customers purchase drinks and food from Costa and then enjoy them on the train. References: Peter Doyle ; Philip Stern, 2006, Marketing Management and Strategy David Jobber, 2010, Principles and Practice of Marketing
Philip Kotler ; Gary Armstrong, 2009, Outlines ; Highlights of Principles of Marketing Hall, W. K. (1980) Survival Strategies in a Hostile Environment, Harvard Business Review 58, Sept.-Oct., 75-85 Coffee Shops-UK-February 2011, oxygen. mintel. com http://www.cosycoffeeshops.co.uk/top-10-coffee-shops-2010.html http://www.gourmetcoffeeonline.info/coffee-articles/coffee/reasons-why-people-love-coffee.html http://www.starbucks.com/aboutus/Company_Factsheet.pdf http://ivythesis.typepad.com/term_paper_topics/costa_coffee_shop/ www.oppositecafe.co.uk
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