Marketing Management: Customer Perceived Value and Consumer Behaviour of Costa Coffee

This assignment discusses the concept of marketing management and its application in Costa Coffee. It explores the customer perceived value and consumer behaviour in the target market. The assignment also covers the marketing objectives and strategies of Costa Coffee.

MARKETING
MANAGEMENT

Table of Contents
Project One:.....................................................................................................................................1
1.0. INTRODUCTION....................................................................................................................1
2.0. Customer Perceived value.........................................................................................................1
3.0. Consumer behaviour of organisation’s target market...............................................................2
3.1. Factors affecting consumer behaviour.............................................................................2
3.1.1. Demographic factors................................................................................................3
3.1.2. Psychological factors...............................................................................................3
3.1.3. Social factors...........................................................................................................3
3.2. Consumer purchasing process.........................................................................................3
4.0. Marketing objectives.................................................................................................................5
4.1. Marketing........................................................................................................................5
4.1.1. Marketing level: Strategic and operational..............................................................5
4.1.2. Strategic marketing plan..........................................................................................5
4.1.3. Segmentation, Targeting and Positioning................................................................7
5.0. Marketing mix plan to achieve set objectives...........................................................................8
5.1. Product.............................................................................................................................8
5.2.Price..................................................................................................................................9
5.3. Place................................................................................................................................9
5.4. Promotions.......................................................................................................................9
5.5.People...............................................................................................................................9
5.6. Process.............................................................................................................................9
5.7. Physical evidence..........................................................................................................10
CONCLUSION..............................................................................................................................10
Project Two:...................................................................................................................................10
Covered In PPT....................................................................................................................10
REFERENCES..............................................................................................................................10

Appendix:.......................................................................................................................................12
Gantt Chart.....................................................................................................................................12

Project One:
1.0. INTRODUCTION
The concept of marketing management is associated with creating and delivering product
and services along with other offering to satisfy customers with the means and main motto of
generating acceptable and desired level of profits. Thus, Marketing management is a process
associated with effective planning, organising along with setting proper controlling and
implementing marketing polices and programmers along with other tactics and strategies which
are designed with the main aim of creating higher level of satisfaction for the customers
(Deepak and Jeyakumar, 2019). The organisation selected for current assignment is Costa coffee
which is a well known British coffeehouse and coffee shop chain the main headquarter of which
is situated at Dunstable, England and having many branches all over the world. This assignment
consists of description about the model to identify the customer perceived value for the
customers along with critical discussion of consumers behaviour and target audience. Further,
marketing objectives of firms is also discussed along with the a marketing mix action plan to
pursue and achieve these set objectives.
2.0. Customer Perceived value
The customer perceived value is basically a marketing terminology used to evaluate the
merits of a product or services which have the ability to meet the needs and expectation level of
customers mainly in comparison with its peers and competitors. The consumers does not buy a
product only on the basis of products primly function but buy a product or services n the basis of
its perceived benefits. The customers perceived value is mainly calculated as the difference
between the customers perceived benefit and customers perceived cost which reflects the main
merits of a product or services which urge and motivates a consumer for its purchase. Thus,
models for customers perceived values is taken as a notion of success of a product which larger
satisfy and meets the wants and needs of customers helps in developing good brand and market
image for a company (Hollensen, 2019).
Costa Coffee is well known coffeehouse which serves best quality coffee and other
beverages like Cappuccino, Latte, Flat white, Americano, Mocha, Hot chocolate, Special drinks,
tea, Cold drinks like cold coffee and ice blends, sandwiches and other supplementary foods for
its customers. To set a balance between its customers perceived benefits and cost use of various
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marketing models are made by Costa Coffee to indentify its customers perceived value which
comprises of regular market research and feedbacks from customers to deliver and come up with
best product and services to meet needs and satisfaction level of its customers. The customer
perceived value indentified for the food and beverage offered by Costa Coffee comprises of
providing of better quality products and services along with setting effective pricing strategy
which comprises of festival discounts and other form of benefits and exclusive features for
customers to meet their expectation and desired level of satisfaction with meeting perceived
customers value (Naudé and Sutton-Brady, 2019). Thus, an evaluation can be made that better
quality product and services with a balance pricing strategy are of customers perceived value for
food and beverage offered by Costa coffee but in recent times effective marketing and
continuous promotion strategy are also vital indentified factors that lead significant impacts on
expectation and satisfaction of customers. Use of effective research method to determine what is
needed by customers along with delivering appropriate marketing message to influence value
perception are also a key aspects of customers perceived value of Costa Coffee to meet needs
and expectation level of its customers.
3.0. Consumer behaviour of organisation’s target market
Consumer behaviour is a vital concept that is associated with the study of customers attitude
and behaviour during the process of choosing, selecting, consuming and disposing a product and
services. Consumers behaviours represents a sum total of all factors comprises both
physiological and physical factors that lead impact on buying habits and selection process of
consumers. In context of Costa Coffee, its target market comprises of both males and females
who belongs to age group of 18-45 years and likes to have an enjoyable and worth experience of
drinking and experiencing a delight full coffee and other beverages along with brand outlets and
incredible work for excellence of life (Kotler, 2019). A discussion about the factors affecting
consumers behaviour of target market of Costa coffee along with a discussion about the
consumer purchasing process is provided below in context of Costa Coffee.
3.1. Factors affecting consumer behaviour
A range of psychological factors and physical factors are there which affects the
consumers behaviour of target market of Costa coffee a description of which is provided below:
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3.1.1. Demographic factors
It consists of needs and demands of both male and females who range under the age of
18-45 years which is product’s target market of Costa coffee. The factors which lead affect on
the consumer behaviour comprises of meeting needs of office going individuals by providing a
good morning coffee along with different product portfolio for starting work and meetings needs
and expectation of lunch time (Samoggia, Bertazzoli and Ruggeri, 2019). Charing relatively high
prices from working consumers and providing a balance of price and quality for students is the
most vital strategy to meet expectation and needs of customers through leading and providing
more affordable product and services.
3.1.2. Psychological factors
It comprises of mind set of individuals and is mainly affected by the perception and mind
set of customers towards quality of product and services offered by a brand. In context of Cost
coffee to lead a positive impact on the mindset of its target customers use and implication of
internet and online channels are made to send a positive message and information regarding the
quality of product so that larger section of customers can be attracted by the Costa coffee.
Further, offering services like free Wi-Fi, 24/7 hours services and other attracting facilities are
also the features and factors that are leading strive physiological impact on the target customers
of Costa coffee to have a more positive image and enhanced goodwill in target market (Visconti,
Peñaloza and Toulouse, 2020).
3.1.3. Social factors
the culture and family background along with other social factors like family, role, status,
etc. also lead a significant influence on the buying habits of target customers of Costa coffee.
Mainly stores of Costa Coffee are situated at high streets and rich shopping malls thus, aim at
middles class and rich families for which a specific range of food products and beverage are
provided to attract young as well as children through launch of Costa kids sections.
3.2. Consumer purchasing process
To evaluate about the consumer behaviour and to get better implication about the buying
habits of target consumers use of consumer purchasing process is made. Utilisation and analysis
of various stages of consumer purchasing process is made to develop better understanding about
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consumer behaviour of targeted customers of Costa Coffee (Chattopadhyay, 2020)(Soyer,
Pauwels and Seggie, 2019).
Problem Recognition- This stage comprises of evaluation of reason and wants which
customers wants to achieve or fulfil. Thus, first stage of consumer buying process consists of
analysis of needs and problem or a respond to marketing stimulus. In context of Costa Coffee
the customers seemed to recognise need of having an aroma coffee and feel attracted by the
chocolate muffins and other quality beverages and items (The Six Stages of the Consumer Buying
Process and How to Market to Them, 2014).
Information search- Once a need is recognised by the customers the next step involves
analysis of information by which the recognised need could be fulfilled and taken as a solution of
indentified problem. Analysis of information by target customers of Costa Coffee could be made
with the help of personal and commercial sources which consists of advertising and promotional
strategy to attract and cater larger number of customers.
Evaluation of alternative- After collection of all required information to meet and fulfil the
desired needs and problem, customers were used to evaluate and analysis all possible options and
viable alternatives to select most valuable and feasible solution and alternative to meet the
indentified needs in a best possible way. Enhanced credibility markets and use of effective
marketing and promotional strategies are viable to keep Costa coffee ahead of its customers so
that its target consumer’s would select it as best alternative to meet and fulfil their needs (Sander,
2019).
Purchases decisions- After analysis of all possible alternatives and solution the most
suitable and viable alternative is selected by customers. After proper analysis of pricing and
quality of product a purchases decisions is also made by customers to fulfil and meet its needs
and desired expectation.
Purchase- After getting attracted by the features and quality of product along with analysis
of pricing and payment method, finally a purchase is made by the target customers of Costa
Coffee to meet their desires of having a delightful mug of coffee along with rich chocolate
muffins and other delicious beverage and food items.
Post- Purchase evaluation- After making the actual purchases the next step of consumer
buying process comprises of taking a post purchase evaluation to check wheatear the actual
needs and desires is met by the purchases decision or not (Dayan and Ndubisi, 2019). This, stage
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of post purchase evaluation is based on the satisfaction level of target customers of Costa coffee
the actual brand image and loyalty of consumers depend thus, a quality product and best possible
services are offered by Cots coffee to meet the needs and expectation level of its target
customers.
4.0. Marketing objectives
4.1. Marketing
It represent a complex process and set of activities associated with creating, promoting and
communicating information about a product along with leading regular market research and
advertising for enhancing sales of a product or service. To ensures effective interaction and
communication with its customers a strategic approach of marketing is applied by Costa coffee
which comprises of effective planning, developing and adopting best maneuvers to obtain and
get a higher competitive edge in the chosen target market.
4.1.1. Marketing level: Strategic and operational
The carrying out and leading a marketing plan mainly comprises of two main level i.e.
strategic and operational level of marketing. In context of Costa Coffee, the strategic marketing
level comprises of taking in account the main values and objectives of firm where as operational
level of marketing is based on taking actions and implementing decisions to accomplish and
achieve set objectives (Pantano, Giglio and Dennis, 2020). The strategic marketing is also about
effective planning, developing and implementing best possible measures to get higher
competitive edge by outline and simplifying a road direct map and base for company by setting
out desired objectives and targets. On other hand operational marketing is also about meeting
those set objectives by performing actions and implementing operations to actually achieve the
set targets and objectives in an effective manner.
4.1.2. Strategic marketing plan
It is basically a well structured and properly written document which defines and describes
the main information and points about a overall marketing plan and strategies of an organisation
to meet and achieve set objectives (Morgan, Miočević and Herhausen, 2019). To enhance its
competitive strength and earn high sales margin Costa coffee is coming up with a new product
i.e. Costa Coffee Ready-To-Drink for which following strategic marketing plan is prepared.
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Overview
Costa Coffee is a well known British Coffeehouse chain that is a subsidiary of Coca Cola
Company and the main headquarter of which is situated at Dunstable, England. Being in a
hospitality industry and dealing as a coffee house chain, a high level of competition is faced by
Costa Coffee. Thus, it become essential and vital for this organisation to make regular
modification and changes in its menu and product portfolio to attract and cater larger number of
customers. Thus, Costa Coffee is coming up with a new ready-to-drink product which would
contain a 30% less sugar as compared with the other drinks offered by its competitors. Use of
coffee expertise of Costa is seen in its new product which includes three of the brand’s most
popular variants – Classic Latte, Caramel Latte and Black Americano to attract and cater
customers of all age group through offering a more healthy drink with 30% less sugar (Costa
moves into ready-to-drink market with first launch since Coca-Cola acquisition, 2019).
Vision
The vision of Costa Coffee is, “to maintain the standards of excellence in its product to
save the world from mediocre coffee.”
Mission
The mission of Costa coffee is, “ To become leading coffee chain house of world through
providing a friendly and comfortable atmosphere for its customers along with providing a quality
and healthy product and services to consumers at reasonable price.
Objectives
The main objectives set out by Costa Coffee for launch of its new product i.e. a ready-to-
drink product with 30% less sugar are stated as below:
 To enhance its target customers by 15% in coming 9 months through attracting
consumers from all age group.
 To increase its sales volume and revenue by 12 % in coming 6 months.
 To enhance overall productivity and profitability by 10% in next 9 months through
achieving higher competitive strength in the market.
Situation analysis
To properly analysis the current situation implication of SWOT analysis is made which provided
information regarding the strengths and weakness of Costa Coffee along with present
opportunity and threats for the company:
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Strengths Weakness
 Excellent brand name and global
reputation
 Quality product with wide range of
product portfolio (Kemper and
Ballantine, 2019).
 Limited number of stores and
expansion at global level.
Opportunity Threats
 Continuous expansion opportunities in
various new consumer markets.
 Adoption of online modes of services
for better expansion of business.
 High level of competition from existing
global coffee chains and other fast
foods outlets.
Action Plan (Budget)
Following action plan and budget is prepared by Costa Coffee for launch of its new
product i.e. ready-to-drink product with 30% less sugar:
PARTICULARS 2020 2021 2022
Initial investment 12000 15000 20000
Borrowings (Bank loans, credits) 10000 8000 12000
Retaining earnings 6000 12000 12000
TOTAL 28000 35000 44000
MARKETING OUTLAY
Promotion activities 15000 12000 15000
Sales publicity 10000 14000 20000
Other expenses 5000 12000 12000
TOTAL 30000 38000 47000
4.1.3. Segmentation, Targeting and Positioning
Use of STP model is made by Costa coffee to craft an attractive message to engage
segmented and targeted audience by the way of relevant position (Hollensen and Opresnik,
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2019). Thus, STP models helps in proper segmentation, targeting and positioning to effectively
promote and compete in market.
Segmentation- It is a process of dividing the target market unto small chunks and segments
to determine their characteristics in order to meet their expectation and needs. Implication of
demographic segmentation is made by Costa coffee which millennial age group of customers
ranging from 15-45 and targets both male and female (Kotler, 2019). For its new ready-to-drink
product with 30% less sugar, costs coffee is segmenting people who wants to have healthy coffee
with snacks at a friendly hang out place.
Targeting- This process is associated with selecting and targeting most profitable section of
market as per the potential and commercial effectiveness and advantageous of market. Costa
coffee is targeting youth and middle age customers who belong to higher and middle income
groups.
Positioning- This process comprises of strategy to place positive mind set and attitude in
customers for product and services offered by a firm. In context of Costa Coffee, its reputation as
best coffee maker and expertise in this business is creating positive image and effective brand
positing on minds of customers (Naudé and Sutton-Brady, 2019).
5.0. Marketing mix plan to achieve set objectives
Utilisation of marketing Mix process provides a set of actions and tactics that are used by a
company or organisation to promote its product and services to achieve set and desired
objectives in an effective manner. The main components of Marketing Mix are discussed and
evaluated below in context of Costa Coffee to achieve and meet the desired objectives
(Marketing mix of Costa Coffee, 2019):
5.1. Product
To meet the objective of enhanced target customers, a wide range of quality product and
services is provided by Costs coffee which consists of hot chocolate, Special drinks, tea, Cold
drinks such as cold coffee along with ice blends, sandwiches and other supplementary foods
forms the part of product portfolio of Costa coffee. Regular modification and innovation are
made by Costa coffee in its product portfolio as per the likings of customers, thus recently a new
ready-to-drink product with 30% less sugar is launched by Costa coffee to meet its objective of
enhanced productivity and larger target customers along with more profit and sales revenue.
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5.2.Price
The pricing strategy of Costa Coffee is based on Premium Pricing to meet its quality and
product varieties (Hollensen, 2019). Costa Coffee is committed to provides best coffee taste and
quality food to its target customers which mainly consist of upper and middle class consumers.
Premium pricing strategy is vital for Costa coffee to meet its objective of enhanced profit margin
along with more competitive strength and brand value.
5.3. Place
Costa coffee is a British Coffee house chain the main headquarter of which is situated at
Dunstable, England, UK with more than 1175 outlets across the UK. Apart from this, Costa
coffee is operating in more than 31 countries of world with more than 1366 stores to accomplish
its objective of larger target customers. The stores of Costa coffee are mainly situated at rich
malls, airports and other premium location to attract and cater rich people to meet its objective of
increased profitability.
5.4. Promotions
To achieve the target of enhanced customer base and increased productivity, effective
promotion and advertising strategies forms a vital part. Costa coffee is making more use of word
of mouth publicity with the help of digital and online modes of promotion to set a direct
connection and effective communication with its customers (Deepak and Jeyakumar, 2019). Use
of social media and other digital platforms would be made by Costa coffee for promotion its new
ready-to-drink product with 30% less sugar to meet it set objectives in an effective manner.
5.5.People
To achieve and accomplish its desired objectives in an effective manner highly skilled and
creative employees are recruited by the Costa Coffee. Beside this, to meet the objective of
enhanced productivity and higher competitive strength timely training and skill improvement is
also provided by Costa coffee which leads to creation of a positive workplace environment along
with enhanced employee engagement.
5.6. Process
To achieve the objective of enhanced productivity, process and work techniques forms a vital
role. Costa coffee focus and emphasis on customers based process to provide best possible
services and products to meet the needs and desires of consumers (Hollensen and Opresnik,
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2019). Use of specially designed Italian espresso machines are made by Costa coffee in
production process to delivers best quality coffee and other beverages to its customers.
5.7. Physical evidence
To ensures enhanced brand positioning and higher sales margin better experience and
enhanced quality product along with well structured and attractive outlets is made by Costa
coffee which provide a friendly and world class rich experience to its customers, Effective online
services and use of digital platforms plays a vital role in leading better physical evidence for new
ready-to-drink product with 30% less sugar of Costa coffee and leads to achievement of set
objectives.
CONCLUSION
On the basis of above assignment a conclusion can be made that marketing management is
related with effective planning, organising and controlling of marketing polices to have better
strategies and tactics to achieve desired objectives. Customer Perceived value is a concept that
provided information about best features and quality of product which meet desires and provided
value to customers. A larger number of demographic, psychological and social factors are their
which lead affect on consumer behaviour thus, use of consumer buying process is made to have
better understanding about needs and buying habits of customers. It has been also summarised
that statistical marketing is associated with setting objectives where as operational marketing is
all about implementation of planning and presentation to achieve set objectives. At last, a
conclusion can be made that use of marketing mix is made to adopt suitable tactics and strategies
comprises of place, price, promotion, product, process, people and physical evidence to achieve
desired set of objectives.
Project Two:
Covered In PPT
REFERENCES
Books and journal
Deepak, R.K.A. and Jeyakumar, S., 2019. Marketing management. Educreation Publishing.
Hollensen, S., 2019. Marketing management: A relationship approach. Pearson Education.
Naudé, P. and Sutton-Brady, C., 2019. Relationships and networks as examined in Industrial
Marketing Management. Industrial Marketing Management, 79, pp.27-35.
Kotler, P.T., 2019. Marketing management. Pearson UK.
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Samoggia, A., Bertazzoli, A. and Ruggeri, A., 2019. Food retailing marketing management:
social media communication for healthy food. International Journal of Retail &
Distribution Management.
Visconti, L.M., Peñaloza, L. and Toulouse, N. eds., 2020. Marketing management: A cultural
perspective. Routledge.
Chattopadhyay, R., 2020. Journey of neuroscience: marketing management to organizational
behavior. Management Research Review.
Soyer, E., Pauwels, K. and Seggie, S.H., 2019. Big and lean is beautiful: A conceptual
framework for data-based learning in marketing management. In Marketing in a Digital
World. Emerald Publishing Limited.
Sander, M., 2019. Marketing-Management: Märkte, Marktforschung und Marktbearbeitung. Utb
GmbH.
Dayan, M. and Ndubisi, N.O., 2019. B2B service innovation and global industrial service
management.
Pantano, E., Giglio, S. and Dennis, C., 2020. Integrating Big Data Analytics Into Retail Services
Marketing Management: The Case of a Large Shopping Center in London, UK. In
Handbook of Research on Innovations in Technology and Marketing for the Connected
Consumer (pp. 205-222). IGI Global.
Morgan, R.E., Miočević, D. and Herhausen, D., 2019. Capability-driven industrial firms:
Considering resources, capabilities, and competencies for marketing developments.
Industrial marketing management, 83(11), pp.1-7.
Kemper, J.A. and Ballantine, P.W., 2019. What do we mean by sustainability marketing?.
Journal of Marketing Management, 35(3-4), pp.277-309.
Hollensen, S. and Opresnik, M.O., 2019. Marketing: A relationship perspective. World
Scientific.
Online:
Costa moves into ready-to-drink market with first launch since Coca-Cola acquisition. 2019.
[Online] Available Through:< https://www.marketingweek.com/coca-cola-launches-first-
costa-coffee-product/>.
The Six Stages of the Consumer Buying Process and How to Market to Them. 2014. [Online]
Available Through:< https://www.business2community.com/consumer-marketing/six-
stages-consumer-buying-process-market-0811565 >.
Marketing mix of Costa Coffee. 2019. [Online] Available Through:<
https://www.marketing91.com/marketing-mix-costa-coffee/ >
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Appendix:
Gantt Chart
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