Marketing Strategy Development of a New Zealand based organization

Running head: INDUSTRY PROJECT (STRATEGIC MANAGEMENT
Industry Project (Strategic Management)
Name of the Student
Name of the University
Author Note

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Executive Summary
The present study revolves around the proposed marketing strategies of the organization
Caffiend, Peton, New Zealand. New Zealand is economically and technologically developed as
well as the nation offers significant business opportunities for small and medium size
organizations. However, the firm Caffiend is not technologically developed and compared to
other firms, it might lose its market share. This study investigates the possible revenue streams
that Caffiend might use to make positive differences in the business. However, as the strategic
approach, it was important to learn the current market situations such as customer demands and
expectations. Thereby, an analysis among the customers of Caffiend has been conducted and it
was found that a large percentage of the customers want the service to be improved; such as the
customers want the service to be delivered at home. In addition, the customers mostly prefer to
place the order online through their Smartphone App.

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Table of Content
1.0 Introduction................................................................................................................................4
1.1 Industry Background.................................................................................................................5
1.2 Organization’s Background –Caffiend, Wellington, New Zealand...........................................7
2.0 Project Scope.............................................................................................................................8
2.1 Statement of Issues faced by the organization...........................................................................9
2.2 Catalyst....................................................................................................................................10
3.0 Literature Review...................................................................................................................10
3.1 Literature Topic one................................................................................................................19
3.3 Literature topic two..................................................................................................................24
3.4 Research Methodology............................................................................................................29
4. 0 Discussion...............................................................................................................................30
4.1 Introduction..............................................................................................................................30
4.2 Result point 1...........................................................................................................................30
4.2 Limitation assumption and ethical considerations-.................................................................45
5.0 Recommendations....................................................................................................................46
5. 1 Long-term Recommendation..................................................................................................46
5.2 Short-term Recommendation...................................................................................................47
References and Bibliography.........................................................................................................49
Appendices....................................................................................................................................60
Growth in New Zealand Coffee Sector.........................................................................................60
Questionnaire.................................................................................................................................61

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Topic- Strategic approaches for increasing the revenue streams for Caffiend, Petone, New
Zealand
1.0 Introduction
The following study is based on the existing business practice of café bars and other
organization in the section. The study investigates how the café in Wellington, New Zealand is
serving the customers. The study examines whether the café in Wellington is serving the
customers with the traditional practice of taking orders or they are using the websites to reach the
customers. Likewise, the study leans towards the solutions that Caffiend Wellington, New
Zealand could apply to generate more revenue. The purpose of the report is to gain an
understanding about how a business follows a current trend and applies it to the operation and
make profits. It is observed that business industry in each sector has become dynamic. The
organizations are in the rush of adopting innovation to the business. In such a dynamic
environment, technology plays a big role- it helps to change mode of operation, which is
observed in the case of Caffiend, Wellington, New Zealand. Caffiend is a beverage firm and it
started the operation with traditional practice of operation but due to the advancement of
technology, the organization adapts to the online platform. The following report provides a
critical analysis Caffiend with respect to possible income stream and revenue generation. In
order to conduct the analysis with the real world context, the report includes both an analysis of
previous studies and an analysis of primary data. Based on the analysis a suitable
recommendation has been provided in the following.

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1.1 Industry Background
It has been identified that people in New Zealand maintains a strong coffee culture,
which is reflected in their disposable income (NZD 28.3%). The disposable income here is one-
step behind Australia. Going forward, there is an increasing demand and trend of sustainable the
products that hold a social responsibility in world’s market but particularly in new Zealand such
trend certainly impact on how customers are selecting their coffee items. As put forward by
Noone, McGuire and Rohlfs (2011), there has been temporary slowdown in the coffee industry
of NZ because of the increase in international coffee price, but this fact does not affect the fresh
organic coffee, as it increases up to 12% with respect to value. Furthermore, the bars as well
restaurants contributed nearly $2,647 million to New Zealand economy in 2012. Moreover, the
economic status was stabilized with the increase rate of 3.2%pa in the last five years to 2007 but
at nearly 0.3% per year over the next five years (Hall & Rusher, 2013). This is because the
recession has caused customers to slash discretionary expenditure on entertainment.
Furthermore, the café bars and hospitality industry has much higher proportion of younger
workers than the national economy. Thus, due to the availability of workforce and the
technological base, the industry is rapidly growing. Fletcher et al., (2012) mentioned that driving
growth in employment in the sector could be increasing patronage in cafes. Nonetheless, it is
expected that the industry has been growing rapidly and many small and medium size
organizations coffee organizations are entering the industry due to low cost model of café
business. This increases the level of competitiveness in the market.

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Figure: Café industry ups and down
(Source: Fletcher et al., 2012)
Going forward, the food and beverage service sector remains as single biggest sector
across all tourism-related sectors of the visitor economy. Service skills New Zealand’s tourism,
travel and hospitality environment 2014 presents that a growing domestic demand as well as
increasing tourism base is considered to be lead a natural employment growth in the visitor
economy, especially in café, restaurants and other takeaway food sector. Hall & Rusher (2013)
mentioned that employment growth might exceed any other in New Zealand’s economy with the
projected growth of 43,700 employees or with the increase of 8.5%. The survey on the
Department of Employment signifies that the accommodation as well as food sector could
demonstrate a projected growth of 7.1% by November 2018 (Luo & Miln, 2014).

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Figure 2: top 20 sectors ranked by the projected growth to November 2017 in New Zealand
(Source: Choudhury & McIntosh, 2013)
1.2 Organization’s Background –Caffiend, Wellington, New Zealand
It is observed that Caffiend is an organization, which gains a tremendous popularity
within a short period; however, the organization has served its customers for more than a
hundred years. Caffiend has been able to gain attention due to its high quality of products.
Considering the needs of the customers, the owner, Luis had taken the café to a more enhanced
level in terms of high profit margin and high level of customer satisfaction. Inside the café, a
healthy work culture has been developed with limited number of staffs. The organization

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followed and implemented an open management style considering the goals of teamwork. Even,
sometime of the owner of the company is observed to be working with the front managers. The
organization has a large customer base due to the attractive location. The café is located near the
Wellington Institute of Technology, the institute has more than 6000 students and they crowd at
Caffiend.
2.0 Project Scope
The following project investigates how the café and beverage firms in Wellington, New
Zealand is serving their customers; this means the study finds out whether customers prefer to
purchase coffee visiting the outlet and or they prefer sending orders online. The study is
developed in such a manner that helps to develop the possible ways of generating revenue stream
for Caffiend Wellington, New Zealand. To meet the research goals and objectives, a primary
analysis has been conducted. In order to collect the primary data, both quantitative and
qualitative data collection techniques have been applied. Following the guidelines of quantitative
data collection, a survey has been conducted among the customers of Caffiend while
implementing the guidelines of qualitative method an interview has been conducted among the
organizational members of Caffiend.
Moreover, to conduct the survey and interview method, two different type of research
questionnaire has been formed- such as the close-ended questions for the survey and the open-
ended questions for the interview. In order to conduct the literature review, 40 different journals
have been selected that are conducted on the present topic of the study. Nonetheless, five
journals have been rejected due to the lack of relevancy, validity and reliability; the data
provided in those journals were not reliable. Besides these facts, the current study is limited to