Marketing Report: Consumer Behavior and Strategies for a Coffee Shop

This report provides a comprehensive marketing analysis of a coffee shop, focusing on the Australian market. It begins by examining consumer behavior, highlighting the high coffee consumption rates, especially among younger generations. The report then delves into market segmentation, dividing the coffee market based on demographics, income, and consumer preferences. The study outlines the coffee shop's market positioning, emphasizing value beyond just coffee, and details the marketing mix, including pricing strategies (skimming and penetration), place (shop location), promotion (TV advertising and strategic alliances), and product (different coffee types). Furthermore, it presents marketing strategies, such as strategic location, advertising, and loyalty programs. Finally, the report addresses ethical issues related to the coffee business, such as sourcing raw materials and the use of cups and stirrers. The report includes a list of references to support the analysis.

Marketing: Coffee Shop
Student’s Name:
Institution:

Consumer Behavior
In Australia coffee has become almost one of the essential
beverages enjoyed by many. It is established that about 75%
of Australian have at least one cup of coffee per day and 28%
have three or more cups of coffee in a day. The younger
generation has a high dependency on coffee with 33% must
have it in order to survive (McCrindle, 2018).
As per insidemug, (2015), it is clear that the high number of
people either bought instant coffee or going to a café and
those who prefer taking coffee in a café are high in number.
This, therefore, shows that people the behavior of people
towards coffee is positive.

Market Segmentation
Market segmentation is the division of the market
so that one is able to focus on a specific segment.
The coffee market is huge and multifaceted. In
order to get a good catch, the market gets
segmented based on the demography and
particularly age youths and adults with the
majority being adults at ranging from 25 years to
45 years (Dolnicar, Grün, & Leisch, 2018).

Market Segmentation Cont’d
In addition, the market can be segmented based on income
people earning over $ 40,000 and profession who like to
take a discussion over academics while having a cup of
coffee.
Also, the market is segmented based on the preferences
such coffee lovers-like drinking their coffee in the shop,
drip drinkers-drink coffee as they go for their tasks, whole
bean buyers-buyer coffee beans and go make their coffee
and specialty drinkers-drink special type of coffee such as
cappuccinos or Espressos (insidesmallbusiness, 2015).

Market positioning
The company will position itself by developing
coffee café that has value for customers beyond
coffee. While coffee still remains the main
product, customers will look at the other aspect
of the shop.
The shop will be structured such that there is
room for everyone, place where people can
meet and discuss while taking coffee, place of
private socialization especially couples and a
normal place for every single person (Solberg,
2017).

Marketing Mix
The marketing mix will entail advertising, pricing,
customer service, and distribution.
Pricing: Since the organization is a start-up business,
skimming and penetration pricing strategy will be
taken into account. Skimming strategy in the sense
that price will be weighted upon the accepted industry
standards and what the customers are willing to pay so
that the company adopts what is best to the customer.
Penetration strategy will take into account the cost
incurred in setting up and enabling (Abril, &
Rodriguez-Cánovas, 2016).
Place: The product is going to be delivered at the shop
where customers will come, request what they need
and get served by our employees (Abril, & Rodriguez-
Cánovas, 2016).

Marketing Mix Cont’d
Promotion: In order to get a large audience and let the
product be known, the company will seek a TV station
representation where the company products will be aired
live. Also, the strategic alliance with big football clubs will
be sought because through these a large number of fans will
get to know the company products (Abril, & Rodriguez-
Cánovas, 2016).
Product: Since coffee is the main product, the organization
will make different types of coffee such as cappuccinos and
Espressos for specialty people, standard coffee for drink
drinkers and coffee lovers (Kanagal, 2015).

Marketing Strategies and plan
The main aim is to put the business in a strategic location in
the market, and ensure that there is client awareness
concerning the services offered through aggressive advertising
in TV and social channels. Also, the company will endeavor to
penetrate through outdoor promotion and get a large customer
base, create referral loyalty programs.
Additionally, strategic alliances with an organization that have
the same demographic as soccer organization will be sought so
that a mutual relationship is attained. The plan is to get a
strategic location and set up the business shop, advertise the
services in TV channels and social media, outdoor advertising
and giving out coupons and create strategic alliances (Baker, &
Saren, 2016).

Ethical Issues Relating to Coffee ShopIn the coffee business, the major issue is the source of raw
materials, coffee is a raw material obtained from farmers. The
issue that arises is the cost of buying fresh coffee from farmers.
Is the price they get from other vendors enough? Ethics
stipulates giving the right unbiased price to the farmer.
On the other hand, there is the use of cups and stirrers and it is
not clear whether the use of the same stirrer and cups by
several people is ethical. This is a difficult wide area requiring
in-depth investigation and legal advice from the experts in the
business.

ReferencesAbril, C., & Rodriguez-Cánovas, B. (2016). Marketing mix effects on private labels brand
equity. European journal of management and business economics, 25(3), 168-175.
Baker, M. J., & Saren, M. (Eds.). (2016). Marketing theory: a student text. Sage.
Dolnicar, S., Grün, B., & Leisch, F. (2018). Market Segmentation Analysis. In Market
Segmentation Analysis (pp. 11-22). Springer, Singapore.
insidefmcg, (2015). Australia’s coffee habits revealed. Retrieved from:
https://insidefmcg.com.au/2015/03/24/australias-coffee-habits-revealed /
insidesmallbusiness, (2015). Coffee consumption in Australia – which, where when and how
much?. Retrieved from: https://
insidesmallbusiness.com.au/latest-news/coffee-a-national-obsession-which-where-when-and-how-m
uch
Kanagal, N. B. (2015). Innovation and product innovation in marketing strategy. Journal of
Management and marketing research, 18, 1-25.
mccrindle, (2018). Australian attitudes towards coffee. Retrieved from:
https://mccrindle.com.au/insights/blogarchive/australian-attitudes-towards-coffee /
Solberg, C. A. (2017). International Marketing: Strategy development and implementation.
Routledge.