Case Study: Buying Local - Business Development Strategies

This case study focuses on the challenges faced by a coffee company, "Receiver," in the competitive market. The primary issues include difficulties in selling products due to brand loyalty, a lack of product differentiation, and the inability to improve product quality without increasing prices. To address these challenges, the case study proposes several solutions. One suggestion is to offer coffee in various flavors or with preservatives to attract new customers. Another solution involves cost optimization, such as growing coffee beans to reduce procurement costs and maintain a competitive price point. The analysis highlights the importance of strategic marketing, product differentiation, and cost management in achieving success within the coffee industry.

Case Name: BUYING LOCAL
Buying Local issues:
Some of the challenges face by Receiver is:
1. Challenge to sell product at existing market
2. Lack of product differentiation
3. Threat to improve quality
Options available with Receiver to solve above issues:
Analyses of issues: The current issue reveals that main challenging in growth is best fit between product
price and quality. As if Receiver tries to improve quality; price will increases and if it tries to gain price
advantage than its existing quality will decline and demand will become low. Hence, this shows that
company can’t make its product different based on price and quality.
1. Difficulty in selling at already established cafes due to unwilling of customers to switch to other brand
because of brand loyalty towards existing company. So, if Receiver opens roasted shop at these
places than there is more chance of getting negative response from these places. Hence, to get
success here; Receiver requires to come up with new marketing strategy to grab this existing market.
2. Second challenge face by the company is lack of differentiation; as other competitors like Kettle Black
and Samuel’s Coffeehouse were also selling roasted coffee having same quality as like Receiver had.
To compete with these companies, Receiver requires to come with some unique feature of its coffee
as a differentiation. This uniqueness could either be in the form of price advantage or quality
improvement or in the form of different varieties having various tastes.
3. The third and final challenge face by the Receiver is unable to improve quality for adopting
differentiation strategy. This challenge bind company to improve its quality at increased cost,
because there’s very much margin between cost and profit of the product at 84% quality. If it tries to
improve its quality; the price will simultaneously increase and in this cut throat competition increase
in price will lower the sales of Receiver’s roasted coffee in the market.
Options:
1. Serving coffee in varieties
2. Launch the product at places with no competitors
3. Increase quality at same price through minimizing cost
Explanation:
To meet with above challenges following options will help Receiver to solve issues mentioned
above. The first issue is selling product in existing market due to brand loyalty of customers towards
existing product. For this two options could be applied; serving roasted coffee in varieties through either
adding extra flavors or by adding preservatives which can let the coffee lasting for long period of time.
The two main competitors of Receiver has not delivered coffee in variety yet. Also, the loyal customer
could show interest in preferring that variety which is not yet sell by existing coffee company.
To solve final issue which is implementing product differentiation through improving quality at
existing price could also be solved; through minimizing overall cost of manufacturing. For this; Receiver
could plant coffee beans by themselves. This step will help company to minimize the procuring cost on
acquiring beans.