Principles of Marketing: Segmentation, Targeting, and Positioning for Costa Coffee's New PA Coffee Product

This report covers the principles of marketing and how they apply to Costa Coffee's new PA coffee product. It includes a market analysis, key market trends, and the current customer attitudes/behaviours in this market. The report also covers segmentation, targeting, and positioning strategies, as well as a recommended marketing mix strategy.

PRINCIPLES OF
MARKETING

Table of Contents
INTRODUCTION .............................................................................................................................3
3 levels of a product model and the key consumer benefits:-............................................................4
Key market trends:-............................................................................................................................5
The current customer attitudes/behaviours in this market:- ..............................................................5
Segmentation, targeting and positioning:-.........................................................................................6
Recommended Marketing Mix Strategy:- .........................................................................................7
CONCLUSION .................................................................................................................................8
REFERENCES...................................................................................................................................9

INTRODUCTION
Product/Service Description costa coffee is planning to produce a new product or planning
to introduce a new kind of coffee which is PA coffee which is made up of pineapple. In short is
called as PA coffee it is made up of flavour mixture in coffee which taste like pineapple in a very
low amount but when is tasted by consumer on basis of trail version it is appreciated a lot because
of a smooth taste of pineapple, the amount of pineapple is very low that's make it more
fantastic(Setiawan, 2021).
3 levels of a product model and the key consumer benefits:-
 Core Benefit- the core benefit of the costa coffee is to fulfil the fundamental needs that
consumer is satisfied when they but the product. It is necessary to keep the cone benefits in
mind from the consumer prospective. The easiest way is to taste the product and than
decide why would consumer buy this product and what the special quality in the product
is.
 Actual Product- the actual product is the product which represent the product features in
brief and product design. Product have different types of features but few are to be
considered as an actual benefits which is also known as core benefits to the consumers. Let
discuss it on the basis of mobile example, the actual product require the design and the
various features of the mobile phones which also include dimensions, colour, screen size,
camera qual;ity and so many features which is in the phone.
 Augmented Product- this part is the intangible part of the product. The augmented
product consist some main element which is warranty and the customer service. The
product plays important role in guiding and which leads toward the meet the needs ODF
specific consumers. Consider the mobile for example which contain the 12 month warranty
for all the consumer who buys the product and provide them the one day return policy and
on some mobile it will be more than one day return policy. While adjusting product is
fabulous path in adding the values to a product. It is very normal to watch the product ads
campaigns and also focusing in the augmented products. It is area in which you have to
introduce the new product to stand in the market and give strong competition(Wijaya,
Nasuka, and Hidayat, 2021).
 Outline Market Analysis:-Market analysis is a numeric and qualitative assessment of the
market. Study competition and economic environment in position of market size, different

customer segments and purchasing shape, barriers to entry and regulation in terms of both
quantity and economic value.
Key market trends:-
 The Future of Events Will Be Hybrid:- Due to pandemic time period closures and social
distance need, marketers faced the cancellation of all kinds of face to face circumstance,
from opening to high-ticket concert series. Instead, virtual events have become the pillar
for interacting with customers and leads. Increased spending on social media and other
digital platforms contributed to the success of these events.
 Trend/Positioning:- Costa Coffee presently holds the second largest brand in the world.
Considered as an independent business, it is worth over £ 1 billion. Currently, the company
is working to develop a global trade name that can conquer global coffee drinkers who can
experience the local culture and atmosphere at the Costa Coffee Shop.
 Distribution channel:- The international dealership strategy has helped CC shrivel up its
distribution channels. However, the company's strength lies in its multiple distribution
channels, which provide a mixture of raw materials that meet global standards.
The key competitors and how are they positioned:-
Costa Coffee's main rival consider Starbucks, Tea Garden, Wenheyo and Light bite Foods.
Costa Coffee is a multinational coffee house chain. Starbucks is a company that operates as a
speciality coffee roaster, marketer, and retailer. Tea Garden is a restaurant that sells groceries.
The current customer attitudes/behaviours in this market:-
 Number of store location:- Starbucks is well best-known and has the largest coffee shop
in the world, but Costa has the largest number of branches in the UK. there are Costa shops
on every major high street. Available at retail stores nationally, excluding Costa Express
Self Service. Costa's ideas offer the best possible suitability to customers everywhere.
Compared to other coffee brands, Costa is more approachable than its competitors. For a
number of retail stores, consider Costa Express machines. Costa is available to guests
throughout the UK. B. Stations, gas stations, corners of big cities.

 Pricing:-If compare the prices of the three major coffee brands, Caffè Nero is more high-
priced and accessible in less quantity than the other two. It is absorbing that many people
would think that Costa is the cheapest brand, but that is not true. It is true that Costa is a
intellectual at pricing, although the price displayed behind the bar counter seems more
reasonable. But if add flavour or upgrade the size, the price will outpace the competition.
 Loyalty program:- Costa has released a loyalty program called Costa Coffee Club that
customers can earn points when they purchase coffee and they can redeem it for free or
discounted coffee on the purchase of any delivery. Any purchase, points are collected in a
digital account that the customer can approach online or on Costa, and for every £1 the
customer gets 5 points and each point is worth 1 pence. creating a loyalty program can
strengthen customer relationships and increase customer retention. As a result, Costa was
able to retain customers with its brand.
 New/improved product fits the market:- New product which is PA coffee, this is the
product which is new invention by the CC, its coffee with the additional flavour in the
coffee and the product which has different taste and preferences according the CC and
consumer . PA coffee is the product which highly recommended by the consumer because
of its addition flavour which is pineapple and consumer are highly appreciating it and it fits
in the market because after a long time consumer are able to taste something different in
the market and new variety in the coffee.
Segmentation, targeting and positioning:-
 Segmentation:- Demographic segmentation divides the market into different segments
settled on demographic characteristics. The three leading demographic factors used by
Costa Coffee are age group, social socio-economic class, and job level. Costa Coffee
allows to divide possible customers into age groups and adjust their taste and coffee
choices accordingly. Social changeable give Costa Coffee more content about the
commodity customers are looking. It affects their buying ability as they propose a
customer's level of income. For example, the privileged class spends more on coffee each
month than the middle class. This allows Costa Coffee to alter the price accordingly.
 Behavioural segmentation is the way of implementation of some distance the maximum
necessary form of owner segmentation because of the reality that it's far extra absorbed

associated with owner want Costa Coffee can form the marketplace primarily based totally
on people's unique espresso preferences(Prihatiningsih, and et.al., 2021). According to the
Costa Coffee's advertising and marketing director, Jim Slater, observed out that there are
individuals who locate caffe latte too vulnerable and cappuccinos too frothy, and do now
no longer need the sturdy flavour of an coffee or black America-no. Moreover, Costa
Coffee has diagnosed what made the customer purchase the espresso, a few would possibly
search for an area to loosen up and others would possibly need to grasp and go. In this
way, Costa Coffee can attempt to fulfil the clients needs.
 Targeting :- Once the segment is known, the company can start the targeting process.
Costa Coffee serves all section and is too risky to use a focus strategy that is, focus on only
one segment. Use distinguished strategies to develop different market mixes for each
segment. The launching of Flat White in January 2010 was arguably the way Costa Coffee
appealingness to customers looking at for coffee other than latte and espresso. Within one
month, flat white already accounts for 7.5% of sales. Costa Coffee believes that targeting
the upper class is most advantageous when divide the market. The brand name symbolizes
luxury and excellence, so these classes are willing to pay more for a cup of coffee.
 Positioning:- In position of positioning, Costa Coffee establish its first TV advertising
campaign, placing the product in the customer's brain and giving the customer an image of
the company. The ad was about a monkey playing with a coffee maker trying to make the
perfect coffee(Pavlova, 2020). The ad over in an effort by a Costa barista to brew a perfect
cup of coffee by hand. This shows that only baristas who are very accomplished and
passionate about coffee can make it. The subject matter behind the TV ad was to prove the
high quality of Costa Coffee's products. According to Reynolds, Costa Coffee express the
idea that TV ads are trying to save everyone from regular coffee.
Recommended Marketing Mix Strategy:-
Costa Coffee's marketing strategy analyses brands using a marketing mix model that
covers 4P (product, price, location, promotion). There are various marketing strategies such as
product innovation, pricing, and promotional planning. Based on Costa Coffee's marketing mix,
these business strategies contribute to the success of the brand.
 Product:- Product which represent the firm is coffee. It doesn't mean cost coffee only have
one product they have varieties of products and appreciated by the peoples. Product like

hot chocolate, special drinks, tea, cold drinks, cold coffee and ice blends, sandwiches and
other alternative foods which is represented by the costa coffee. The product of costa
coffee essential role in the marketing mix because all the strategies of the organisation in
dependent on the people choosing and loving their products. Costa coffee always love pull
strategy rather than the push strategy.
 Place in the marketing mix of Costa coffee:- costa coffee has epic image or presence in
the great Britain with over 1000 stores. however the presence of the brand in other
countries is kind of limited it can be found on malls, airport and some premium places. But
still brand represent only in top urban areas which help in adds to the positioned.
 Promotions in the marketing mix of Costa coffee:- the promotion of costa coffee is
almost absent ion the case of promotion. Still there are no alternative promotion can be
seen. In the field of promotion brand only use BTL promotions which includes advertising
on buses and outdoors mainly. This methodologies is preferred by the brand because they
want rely more on word of mouth publicity(He, and Harris, 2020).
 Price in the marketing mix of Costa coffee:- costa coffee follow three standard of rule
which premium pricing, premium product variety, and its premium quality. Brand always
stand on its commitment to deliver best of it whether it is taste, best supplementary foods
to its consumers. Cost coffee doesn't consider price factor as an essential factor. Their
thinking to what the best we can offer or deliver to its consumer and maintain the best
quality to make them worth.
CONCLUSION
From the following report we can conclude about principles of marketing and the new product
Product,Service Description costa coffee is planning to produce a new product or planning to
introduce a new kind of coffee which is PA coffee which is made up of pineapple. In short is
called as PA coffee it is made up of flavour mixture in coffee which taste like pineapple in a very
low amount but when is tasted by consumer on basis of trail version it is appreciated a lot because
of a smooth taste of pineapple, the amount of pineapple is very low that's make it more
fantastic(Arias-Flores, and et.al., 2022). As well as Product/Service Description costa coffee is
planning to produce a new product or planning to introduce a new kind of coffee which is PA

coffee which is made up of pineapple. In short is called as PA coffee it is made up of flavour
mixture in coffee which taste like pineapple in a very low amount but when is tasted by consumer
on basis of trail version it is appreciated a lot because of a smooth taste of pineapple, the amount
of pineapple is very low that's make it more fantastic.
REFERENCES
Books and Journals
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Pavlova, A., 2020, May. PRACTICAL STAGES OF FORMATION OF MARKETING
STRATEGY OF HOTEL ENTERPRISES. In The 15 th International scientific and practical
conference «MODERN SCIENCE AND PRACTICE»(4-5 May, 2020). Varna, Bulgaria 2020.
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Setiawan, R.B., 2021. An Effect of Relationship Marketing On Customer Trust and Impact on
Customer Retention Bank Sumut Branch Lubuk Pakam. Budapest International Research and
Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 4(3), pp.5976-5986.
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LESSON ABOUT THE CONSUMER BUYING PROCESS. Marketing Education Review, pp.1-
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Wijaya, T., Nasuka, M. and Hidayat, A., 2021. Salesperson ethics behavior as antecedent of
Islamic banking customer loyalty. Journal of Islamic Marketing.
Yeh, R. and Zoeckler, L., 2022. THE EFFECTIVENESS OF USING ONLINE VIDEO AND
BLOG CONTENT IN MARKETING CASE STUDIES FOR COLLEGE
STUDENTS’LEARNING–A THREE-YEAR COMPARISON. Marketing Education Review,
pp.1-9.