Kaffeine's Strategic Positioning Shift
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AI Summary
This assignment examines the evolving brand strategy of Kaffeine, a coffee retailer in the United Kingdom. It analyzes their shift from primarily being a coffee provider with internet access to incorporating more food items and undergoing a comprehensive rebranding. The analysis delves into Kaffeine's response to competitive pressures, particularly from Barista's foray into food offerings, and explores their new branding initiatives aimed at energizing and diversifying their brand image.
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BUSINESS RESEARCH
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Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1.1 Project Proposal................................................................................................................1
2.1 Methodologies..................................................................................................................4
3.1 Evaluation.........................................................................................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1.1 Project Proposal................................................................................................................1
2.1 Methodologies..................................................................................................................4
3.1 Evaluation.........................................................................................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
INTRODUCTION
The coffee industry and coffee shop business has boomed in recent years, especially with
regards to speciality coffees (Bruhn, Schoenmueller and Schäfer, 2012). The market for
speciality coffees has grown as consumers become more educated about espresso-based drinks
and how they are made. According to a National Coffee Association Annual Drinking Trends
Survey, speciality coffee consumption has risen from 9 percent in 2000 to 16 percent in 2004.
Every single day, more than half of the adult population drinks coffee, 108.9 million people. The
United Kingdom's account for 52 million of those coffee drinkers and these numbers are raising
in a huge amount.
TASK
1.1 Project Proposal
a) Aim: Kaffeine will make its best effort to create a unique place where customers can socialize
with each other in a comfortable and relaxing environment while enjoying the best brewed coffee
or espresso and pastries in town. We will be in the business of helping our customers to relieve
their daily stresses by providing piece of mind through great ambience, convenient location,
friendly customer service, and products of consistently high quality. Kaffeine will invest its
profits to increase the employee satisfaction while providing stable return to its shareholders.
Objectives:
Types of Coffee which are consumed by modern generation
According to the study of Castronovo and Huang, (2012) it is evaluated that Customizing
according to interests in local markets is a way for coffee shop owners to create loyalty and
increase sales. Espresso and other speciality coffees are becoming popular in quick service
restaurants. While consumption of gourmet coffee has remained steady, purchases of espresso
beverages have risen from 4 percent to 7 percent. Gourmet coffee had been the strongest growing
part of the market, but recent studies have shown that that the trend toward occasional drinkers is
continuing while espresso drinks continue to rise in popularity. Speciality coffees seem to be
most appealing to younger adults. The 25 – 34 age group accounted for one-quarter of speciality
coffee orders in 2000 and only 10 percent of the regular coffee orders. Those 18 – 34 years old
have increased their speciality coffee purchases at table service restaurants in the last two years.
1
The coffee industry and coffee shop business has boomed in recent years, especially with
regards to speciality coffees (Bruhn, Schoenmueller and Schäfer, 2012). The market for
speciality coffees has grown as consumers become more educated about espresso-based drinks
and how they are made. According to a National Coffee Association Annual Drinking Trends
Survey, speciality coffee consumption has risen from 9 percent in 2000 to 16 percent in 2004.
Every single day, more than half of the adult population drinks coffee, 108.9 million people. The
United Kingdom's account for 52 million of those coffee drinkers and these numbers are raising
in a huge amount.
TASK
1.1 Project Proposal
a) Aim: Kaffeine will make its best effort to create a unique place where customers can socialize
with each other in a comfortable and relaxing environment while enjoying the best brewed coffee
or espresso and pastries in town. We will be in the business of helping our customers to relieve
their daily stresses by providing piece of mind through great ambience, convenient location,
friendly customer service, and products of consistently high quality. Kaffeine will invest its
profits to increase the employee satisfaction while providing stable return to its shareholders.
Objectives:
Types of Coffee which are consumed by modern generation
According to the study of Castronovo and Huang, (2012) it is evaluated that Customizing
according to interests in local markets is a way for coffee shop owners to create loyalty and
increase sales. Espresso and other speciality coffees are becoming popular in quick service
restaurants. While consumption of gourmet coffee has remained steady, purchases of espresso
beverages have risen from 4 percent to 7 percent. Gourmet coffee had been the strongest growing
part of the market, but recent studies have shown that that the trend toward occasional drinkers is
continuing while espresso drinks continue to rise in popularity. Speciality coffees seem to be
most appealing to younger adults. The 25 – 34 age group accounted for one-quarter of speciality
coffee orders in 2000 and only 10 percent of the regular coffee orders. Those 18 – 34 years old
have increased their speciality coffee purchases at table service restaurants in the last two years.
1
One-third of regular coffee orders are placed by consumers 65 and older, while that group
accounts for less than 10 percent of speciality coffee orders.
Coffee Shops and Wireless Technology
Successful coffee shop owners have moved past just selling coffee to creating
environments that encourage longer visits: surfing the Internet, working from their laptops, or
communicating with friends, family, and colleagues. Wireless technology is changing the way
people live (Chu, 2011). Hotspots (internet access areas that deploy wireless technology) can be
found in airports, hotels, and coffee shops. Some offer free access while others require paid
subscriptions. Offering free wireless Internet in a coffee shop is one sure way to boost the
chances of success. People are now given the option to make a connection over a cup of coffee
and over the internet.
STRATEGIC CHANGES IN POSITIONING
As per research done by Goodrich and De Mooij, (2014), Consultants, in United
Kingdom, Kaffeine are having about 70% of all coffee outlets. The consumption demand in
United Kingdom is not very high as compared to US or European countries, but it still exceeds
the supply. In his words, “If Kaffeine can add another 1,000 cafés in United Kingdom over the
next three years, it is going to be invincible and will see partnership opportunities in overseas
markets coming its way” Healthy battle has been brewed among the coffee retails in United
Kingdom. The main competitor Marketing Research: Feasibility Of Opening A Kaffeine has
started radical experiments with food in its outlet with success. So Kaffeine has also turned its
focus towards more food items in its outlet. Kaffeine started as a coffee center which will
provide both well-brewed coffee and Internet access .Now it is trying to energize and stratify its
brand. The branding overhaul—new logo, new cup and crockery designs, new wall paint and,
even, coffee machines that produce better brewed coffee—is starting in Bangalore and will soon
spread to other cities. As a strategy to reduce operational cost and maximize 3 profit, Kaffeine
concentrates on opening its new outlets only in cities where it can open a number of outlets.
b) Timed research plan
A chart in which a series of horizontal lines shows the amount of work done or
production completed in certain periods of time in relation to the amount planned for those
periods. Thus, it is very helpful for Kaffeine while conducting a research in order to understand
the marketplace.
2
accounts for less than 10 percent of speciality coffee orders.
Coffee Shops and Wireless Technology
Successful coffee shop owners have moved past just selling coffee to creating
environments that encourage longer visits: surfing the Internet, working from their laptops, or
communicating with friends, family, and colleagues. Wireless technology is changing the way
people live (Chu, 2011). Hotspots (internet access areas that deploy wireless technology) can be
found in airports, hotels, and coffee shops. Some offer free access while others require paid
subscriptions. Offering free wireless Internet in a coffee shop is one sure way to boost the
chances of success. People are now given the option to make a connection over a cup of coffee
and over the internet.
STRATEGIC CHANGES IN POSITIONING
As per research done by Goodrich and De Mooij, (2014), Consultants, in United
Kingdom, Kaffeine are having about 70% of all coffee outlets. The consumption demand in
United Kingdom is not very high as compared to US or European countries, but it still exceeds
the supply. In his words, “If Kaffeine can add another 1,000 cafés in United Kingdom over the
next three years, it is going to be invincible and will see partnership opportunities in overseas
markets coming its way” Healthy battle has been brewed among the coffee retails in United
Kingdom. The main competitor Marketing Research: Feasibility Of Opening A Kaffeine has
started radical experiments with food in its outlet with success. So Kaffeine has also turned its
focus towards more food items in its outlet. Kaffeine started as a coffee center which will
provide both well-brewed coffee and Internet access .Now it is trying to energize and stratify its
brand. The branding overhaul—new logo, new cup and crockery designs, new wall paint and,
even, coffee machines that produce better brewed coffee—is starting in Bangalore and will soon
spread to other cities. As a strategy to reduce operational cost and maximize 3 profit, Kaffeine
concentrates on opening its new outlets only in cities where it can open a number of outlets.
b) Timed research plan
A chart in which a series of horizontal lines shows the amount of work done or
production completed in certain periods of time in relation to the amount planned for those
periods. Thus, it is very helpful for Kaffeine while conducting a research in order to understand
the marketplace.
2
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C) Possible sources:
While conducting an investigation there are ample number methodologies which can be
used by researcher of Kaffeine in order to collect data. Methods are Primary and Secondary.
Primary data: Primary data is data originated for the first time by the researcher through
direct efforts and experience, specifically for the purpose of addressing his research problem.
Also known as the first hand or raw data. Primary data collection is quite expensive, as the
research is conducted by the organisation or agency itself, which requires resources like
investment and manpower. The data collection is under direct control and supervision of the
investigator (Hudson and Thal, 2013).
Secondary Data: Secondary data implies second-hand information which is already
collected and recorded by any person other than the user for a purpose, not relating to the current
research problem. It is the readily available form of data collected from various sources like
censuses, government publications, internal records of the organisation, reports, books, journal
articles, websites and so on.
Secondary data offer several advantages as it is easily available, saves time and cost of
the researcher. But there are some disadvantages associated with this, as the data is gathered for
the purposes other than the problem in mind, so the usefulness of the data may be limited in a
number of ways like relevance and accuracy (Hutter and et. al., 2013).
As can be seen from the above discussion that primary data is an original and unique
data, which is directly collected by the researcher from a source according to his requirements.
3
While conducting an investigation there are ample number methodologies which can be
used by researcher of Kaffeine in order to collect data. Methods are Primary and Secondary.
Primary data: Primary data is data originated for the first time by the researcher through
direct efforts and experience, specifically for the purpose of addressing his research problem.
Also known as the first hand or raw data. Primary data collection is quite expensive, as the
research is conducted by the organisation or agency itself, which requires resources like
investment and manpower. The data collection is under direct control and supervision of the
investigator (Hudson and Thal, 2013).
Secondary Data: Secondary data implies second-hand information which is already
collected and recorded by any person other than the user for a purpose, not relating to the current
research problem. It is the readily available form of data collected from various sources like
censuses, government publications, internal records of the organisation, reports, books, journal
articles, websites and so on.
Secondary data offer several advantages as it is easily available, saves time and cost of
the researcher. But there are some disadvantages associated with this, as the data is gathered for
the purposes other than the problem in mind, so the usefulness of the data may be limited in a
number of ways like relevance and accuracy (Hutter and et. al., 2013).
As can be seen from the above discussion that primary data is an original and unique
data, which is directly collected by the researcher from a source according to his requirements.
3
As opposed to secondary data which is easily accessible but are not pure as they have undergone
through many statistical treatments.
2.1 Methodologies
The aim of the project is to ensure that research procedure is conducted in an appropriate
way for better understanding and evaluating the results of the research. This chapter has been
classified into few sections which include research design, data collection methods, sampling
design, research instrument, constructs measurement, data processing, data analysis and
conclusion (Ioanăs and Stoica, 2014).
Research design:
Quantitative research is ‘typically considered to be the more scientific approach in doing
social science’. It usually indicates that the preferences need to be determined and it involved a
large number of respondents. According to Anderson (2006), he stated that the data collected
must be unbiased, measurable and statistically valid. By using quantitative research for this
research, we can obtain the numerical data for data analysis by implementing mathematical
models. By running the data analysis, we will then be able to obtain the result for the research.
Sampling Design:
Sampling is the process of using small number of items or parts of a larger population to
make a conclusion about the whole population. However, it is impractical to study the entire
population because it needs to utilize too much time and money, therefore it should be using a
sample in order to require some part of the population to perform and experiment. The
population of this study will be targeted on the full time undergraduates’ dine-in experience in
the International Coffee Chains in United Kingdom which aims to get more accurate and reliable
results.
Target Population: Target population is defined as a group of people where researcher is
interested in analyzing to get relevant information according to the objectives of the research
project. The targeted population was the individual groups consisted of male and female
undergraduates who are aged between 18 and 26 years old (Kim and Ko, 2012). These individual
groups are the undergraduates who are currently studying in higher education institutions United
Kingdom which include public universities, private universities, and university colleges. The
respondents of this research will be full-time undergraduates who had dine-in experience in
International Coffee Chains in United Kingdom
4
through many statistical treatments.
2.1 Methodologies
The aim of the project is to ensure that research procedure is conducted in an appropriate
way for better understanding and evaluating the results of the research. This chapter has been
classified into few sections which include research design, data collection methods, sampling
design, research instrument, constructs measurement, data processing, data analysis and
conclusion (Ioanăs and Stoica, 2014).
Research design:
Quantitative research is ‘typically considered to be the more scientific approach in doing
social science’. It usually indicates that the preferences need to be determined and it involved a
large number of respondents. According to Anderson (2006), he stated that the data collected
must be unbiased, measurable and statistically valid. By using quantitative research for this
research, we can obtain the numerical data for data analysis by implementing mathematical
models. By running the data analysis, we will then be able to obtain the result for the research.
Sampling Design:
Sampling is the process of using small number of items or parts of a larger population to
make a conclusion about the whole population. However, it is impractical to study the entire
population because it needs to utilize too much time and money, therefore it should be using a
sample in order to require some part of the population to perform and experiment. The
population of this study will be targeted on the full time undergraduates’ dine-in experience in
the International Coffee Chains in United Kingdom which aims to get more accurate and reliable
results.
Target Population: Target population is defined as a group of people where researcher is
interested in analyzing to get relevant information according to the objectives of the research
project. The targeted population was the individual groups consisted of male and female
undergraduates who are aged between 18 and 26 years old (Kim and Ko, 2012). These individual
groups are the undergraduates who are currently studying in higher education institutions United
Kingdom which include public universities, private universities, and university colleges. The
respondents of this research will be full-time undergraduates who had dine-in experience in
International Coffee Chains in United Kingdom
4
Sampling Elements: The respondents of this survey were full-time undergraduates aged
between 18 and 26 years old especially for those who recently visit and who had dine in
experience in the International Coffee Chains in United Kingdom.
Sampling Size: Rule of thumb in determining the sample size of a quantitative research.
He stated that sample size in the range of 30 to 500 is the most appropriate for majority of the
research papers. Therefore, in this study, a sample size of 200 respondents was selected to
complete the survey. The respondents are from different universities in order to get the result
more accurate and reliable (Pookulangara and Koesler, 2011).
3.1 Evaluation
Themes:
Sales Forecast-
Food costs are assumed at 25% for coffee beverages and 50% for retail beans and
pastries. Proximity to the University campus will dictate certain sales seasonality with revenues
slightly decreasing during the school vacation periods.
The chart and table below outline our projected sales forecast for the next three years.
5
between 18 and 26 years old especially for those who recently visit and who had dine in
experience in the International Coffee Chains in United Kingdom.
Sampling Size: Rule of thumb in determining the sample size of a quantitative research.
He stated that sample size in the range of 30 to 500 is the most appropriate for majority of the
research papers. Therefore, in this study, a sample size of 200 respondents was selected to
complete the survey. The respondents are from different universities in order to get the result
more accurate and reliable (Pookulangara and Koesler, 2011).
3.1 Evaluation
Themes:
Sales Forecast-
Food costs are assumed at 25% for coffee beverages and 50% for retail beans and
pastries. Proximity to the University campus will dictate certain sales seasonality with revenues
slightly decreasing during the school vacation periods.
The chart and table below outline our projected sales forecast for the next three years.
5
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Kaiffiene is majority-owned by Arthur Garfield and James Polk. Mr. Garfield holds a
Bachelor's Degree in Business Administration from the University of ZYX. He's worked for
several years as an independent business consultant. Previously, he owned the ABC Travel
Agency, which he profitably sold four years ago. Mr. Garfield has extensive business contacts in
Oregon that he will leverage to help his new venture succeed. Mr. Polk has a Bachelor's Degree
in Psychology from the XYZ State University. For the last five years he has worked as a
manager of DEF Ristorante, a successful Italian restaurant in Portland, OR. Under Mr. Polk's
management, the restaurant has consistently increased sales while maintaining a lower than
average level of operating expenses (Rapp, Beitelspacher, Grewal and Hughes, 2013).
Projected Cash Flow:
As the chart and table below present, the company will maintain a healthy cash flow
position, which will allow for timely debt servicing and funds available for future development
(Wang, Yu and Wei, 2012).
6
Bachelor's Degree in Business Administration from the University of ZYX. He's worked for
several years as an independent business consultant. Previously, he owned the ABC Travel
Agency, which he profitably sold four years ago. Mr. Garfield has extensive business contacts in
Oregon that he will leverage to help his new venture succeed. Mr. Polk has a Bachelor's Degree
in Psychology from the XYZ State University. For the last five years he has worked as a
manager of DEF Ristorante, a successful Italian restaurant in Portland, OR. Under Mr. Polk's
management, the restaurant has consistently increased sales while maintaining a lower than
average level of operating expenses (Rapp, Beitelspacher, Grewal and Hughes, 2013).
Projected Cash Flow:
As the chart and table below present, the company will maintain a healthy cash flow
position, which will allow for timely debt servicing and funds available for future development
(Wang, Yu and Wei, 2012).
6
7
8
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CONCLUSION
From the result of it has been concluded that the most ideal location to open a new 24
hour coffee shop was in the area near where most of people can get targeted. Although the
Metrotown center area was highlighted as one of the more suitable areas, I considered the fact
that there were a lot more coffee shops there competing for market share compared to the
Lougheed area. Although this was not a major concern in my locational assessment, the
location's close proximity, as a major institution with numerous students, provided the necessary
customer base for a successful business.
9
From the result of it has been concluded that the most ideal location to open a new 24
hour coffee shop was in the area near where most of people can get targeted. Although the
Metrotown center area was highlighted as one of the more suitable areas, I considered the fact
that there were a lot more coffee shops there competing for market share compared to the
Lougheed area. Although this was not a major concern in my locational assessment, the
location's close proximity, as a major institution with numerous students, provided the necessary
customer base for a successful business.
9
REFERENCES
Books and Journals
Bruhn, M., Schoenmueller, V. and Schäfer, D.B., 2012. Are social media replacing traditional
media in terms of brand equity creation?. Management Research Review, 35(9), pp.770-
790.
Castronovo, C. and Huang, L., 2012. Social media in an alternative marketing communication
model. Journal of Marketing Development and Competitiveness, 6(1), p.117.
Chu, S.C., 2011. Viral advertising in social media: Participation in Facebook groups and
responses among college-aged users. Journal of interactive advertising, 12(1), pp.30-43.
Goodrich, K. and De Mooij, M., 2014. How ‘social’are social media? A cross-cultural
comparison of online and offline purchase decision influences. Journal of Marketing
Communications, 20(1-2), pp.103-116.
Hudson, S. and Thal, K., 2013. The impact of social media on the consumer decision process:
Implications for tourism marketing. Journal of Travel & Tourism Marketing, 30(1-2),
pp.156-160.
Hutter and et. al., 2013. The impact of user interactions in social media on brand awareness and
purchase intention: the case of MINI on Facebook. Journal of Product & Brand
Management, 22(5/6), pp.342-351.
Ioanăs, E. and Stoica, I., 2014. Social media and its impact on consumers behavior. International
Journal of Economic Practices and Theories, 4(2), pp.295-303.
Kim, A.J. and Ko, E., 2012. Do social media marketing activities enhance customer equity? An
empirical study of luxury fashion brand. Journal of Business Research, 65(10),
pp.1480-1486.
Pookulangara, S. and Koesler, K., 2011. Cultural influence on consumers' usage of social
networks and its' impact on online purchase intentions. Journal of Retailing and
Consumer Services, 18(4), pp.348-354.
Rapp, A., Beitelspacher, L.S., Grewal, D. and Hughes, D.E., 2013. Understanding social media
effects across seller, retailer, and consumer interactions. Journal of the Academy of
Marketing Science, 41(5), pp.547-566.
Solomon, M.R. and et. al., 2014. Consumer behavior: Buying, having, and being (Vol. 10).
Pearson.
Wang, X., Yu, C. and Wei, Y., 2012. Social media peer communication and impacts on purchase
intentions: A consumer socialization framework. Journal of interactive marketing,
26(4), pp.198-208.
10
Books and Journals
Bruhn, M., Schoenmueller, V. and Schäfer, D.B., 2012. Are social media replacing traditional
media in terms of brand equity creation?. Management Research Review, 35(9), pp.770-
790.
Castronovo, C. and Huang, L., 2012. Social media in an alternative marketing communication
model. Journal of Marketing Development and Competitiveness, 6(1), p.117.
Chu, S.C., 2011. Viral advertising in social media: Participation in Facebook groups and
responses among college-aged users. Journal of interactive advertising, 12(1), pp.30-43.
Goodrich, K. and De Mooij, M., 2014. How ‘social’are social media? A cross-cultural
comparison of online and offline purchase decision influences. Journal of Marketing
Communications, 20(1-2), pp.103-116.
Hudson, S. and Thal, K., 2013. The impact of social media on the consumer decision process:
Implications for tourism marketing. Journal of Travel & Tourism Marketing, 30(1-2),
pp.156-160.
Hutter and et. al., 2013. The impact of user interactions in social media on brand awareness and
purchase intention: the case of MINI on Facebook. Journal of Product & Brand
Management, 22(5/6), pp.342-351.
Ioanăs, E. and Stoica, I., 2014. Social media and its impact on consumers behavior. International
Journal of Economic Practices and Theories, 4(2), pp.295-303.
Kim, A.J. and Ko, E., 2012. Do social media marketing activities enhance customer equity? An
empirical study of luxury fashion brand. Journal of Business Research, 65(10),
pp.1480-1486.
Pookulangara, S. and Koesler, K., 2011. Cultural influence on consumers' usage of social
networks and its' impact on online purchase intentions. Journal of Retailing and
Consumer Services, 18(4), pp.348-354.
Rapp, A., Beitelspacher, L.S., Grewal, D. and Hughes, D.E., 2013. Understanding social media
effects across seller, retailer, and consumer interactions. Journal of the Academy of
Marketing Science, 41(5), pp.547-566.
Solomon, M.R. and et. al., 2014. Consumer behavior: Buying, having, and being (Vol. 10).
Pearson.
Wang, X., Yu, C. and Wei, Y., 2012. Social media peer communication and impacts on purchase
intentions: A consumer socialization framework. Journal of interactive marketing,
26(4), pp.198-208.
10
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