Viability of Overseas Expansion of Marvin and Smith Coffee Shop into Romania

Introduction
Analysis of the case study is illustrative of the fact that Marvin and Smith are seeking
expansion of their coffee shop in different countries. It is required by the owner of shop
to conduct a research on countries for the expansion of Hank and Patty coffee shop.
The selected country for the expansion is Romania that has witnessed considerable
growth in cafes in recent year resulting from improvement in income and advance
economy. The main beneficiaries of economic growth are the consumers in large cities
and Bucharest that is the sixth largest city in European Union. Although, Romania is
one of the poor countries of European Union, in fiscal year 2017, economy of country is
growing at an annual growth rate of 5% (Trading Economics, 2018). It is an economy
that is pre-dominantly based on service sectors and considering this, Romania would be
the suitable country for expansion. Research on Romania has been conducted in
several aspects such as structural challenges, ethical considerations, supply chain
management, information system and logistical factors.
Research on chosen country for coffee shop expansion:
Typical behavior of consumer of spending long time sitting into coffee shops has been
strengthened due to change in life styles. Active social life in large cities of Romania
along with Bucharest is translated by increasing optimism of consumers in future of
economic condition of country. One of the excellent means of relaxation and
socialization in Romania are cafes. Over the forecasted period, it is expected that coffee
shops will witness growth. There is an increased likelihood of consumers targeting
coffee shops resulting from increased propensity of consumers to spend more on
entertainment and leisure. The main supporters of such shops will be from consumers
enjoying higher income whilst the consumers in countryside and small cities (Van
Haeringen and Hai, 2016). According to Euromonitor International (2017), in Romania,
the GDP forecast is bringing an improvement of incomes, beginning with the increased
minimum wage leading to a better average income. If people will have move more
money to spend for their leisure, customers will target specially the coffee shops and
bars. People living and working in bigger cities, like Bucharest, are more likely to have a
better salary and to be more interested in coffee shops.

Logistics market of Romania has been put forward by their extremely strong macro
performance, higher sales growth and excellent gross domestic product in recent years.
Growth of business need is supported by building of logistics facilities. Developed
logistic system of country can help business in turning their supply chain system into a
strategic advantage that would ensure excellent operational performance. The
developed logistic system will help Marvin and Smith coffee shop to well structure their
supply system and curtailing their operational expenses across different outlets in
different countries (Solaiman et al., 2015). It will assist coffee shop in optimizing their
product scheduling, order placement and quality of logistics.
Coffee shops to be started in Romania should have ethical policy of sourcing the coffee
ingredients. Customer sourcing policy should also be ethical. Coffee should be made
the world agricultural sustainable product. Coffee organization seeking to establish
coffee shops in should buy coffees that are sourced in partnership with conservation
International. While the establishment, coffee company should also make investment in
supporting coffee communities. For ensuring that long-term supply of high coffee
quality, company should initiate programs that are aimed at improving the livelihood of
farmers (Chiang and Wang 2016). On other hand, the enjoyment of coffee shops in
London is supported by ethical schemes such as fair trade.
Making investment in Romania is becoming less challenging regarding business
environment predictability. Economy is supported by relaxed monetary policy of
government along with low fiscal deficit and structural fiscal position of 1%
approximately. There has been a rapid rise in number of coffee shops in London due to
increased demand of premium coffee. Compared to London that has demand of
premium coffee, Eastern Europe has witnessing demand of hot coffee. Due to coffee
becoming more affordable among different class of society and changing customers
taste, hot coffee has witnessed a robust growth in sales. Increased affordability of
different segments of society has resulted in alteration of categorization of coffee to
essential good compared to luxury goods. Expanding into Romania is justified due to
their developed logistical system and process, growing economy and changing lifestyles
that are driving increased demand for coffee (Gaman et al., 2015).

Tailored marketing mix of coffee expansion plan:
The expansion plan of coffee shop of Marvin and Smith can be strengthened by the
application of marketing mix that will assist in determining customer needs and buying
willingness.
.Marketing mix will be used by company for building brand popularity and image and
should support the growth and development of business (Greene, 2014).
Products- The products offered by Marvin and Smith coffee shop will have ingredient
such as herbal tea and high-quality tea that will be sourced from fair-trade registered
foundation. Other product lines that will be offered by coffee shop to Romanian
customers involve cold drinks, pastries and snacks. The eatables will adopt taste of
coffee of Eastern Europe and will offered concentrated and ready to use drinks. Coffee
market in Romania is marked by fierce competition like London among various domestic
and international producers of coffee that will lead to price war. It will be required by
Marvin and Smith to apply strategic marketing techniques for increasing their customer
base and increasing product volume (Aras et al., 2017). Furthermore, comprehensive
coffee options will be offered by coffee shop along with small menu of desserts and
breakfast items. The coffee shop will provide base products as in London like espresso,
americano, cappuccino, latte although will add different style of the drinks such as
coffee latte in three layers or mocha. All the coffee based drinks will include the Uganda
coffee as the company is focused to promote the Fairtrade coffee and to create a brand
from it.
Price - The future of market outcome of coffee is driven by increased coffee demand
due to several demanding factors along with increasing heath awareness. Pricing
strategy of coffee shop is designed in such a way that it takes the advantage of
behavioral tendency people for purchasing products based on correlation between
value and price (Barrett & Weinstein, 2015). Coffee products of company will be priced
reasonably according to the fair-trade costs. In order to maintain the brand, the price
may be higher in addition to competitors due to Fairtrade reasons.