Marketing Management Report: Costa Coffee's Brazil Expansion Strategy

This report provides a detailed analysis of marketing management principles, focusing on Costa Coffee's potential expansion into the Brazilian market. It begins by defining key marketing concepts, including transactional and relationship marketing, and explores the stages of the marketing planning process. The report then delves into market research, outlining the systems used for gathering and managing information, identifying new product opportunities, and analyzing market opportunities in Brazil. Furthermore, it examines strategic planning, including segmentation, targeting, and positioning, as well as the decision-making processes for both consumers and organizations. The report concludes with the development of a marketing plan designed to support business objectives, identifying appropriate marketing tools to meet both business and customer needs, and the role of the internet in modern marketing. The report is a comprehensive overview of marketing management in the context of a real-world business scenario.

Marketing Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
(a) Define the marketing concept................................................................................................3
(b) Define the stages of the marketing planning process............................................................3
(c) Assess the difference between transactional and relationship marketing..............................4
(d) Explain the difference between marketing mix planning for product-based and service.....5
based organisation......................................................................................................................5
(e) Assess the role of the internet in modern marketing.............................................................5
TASK 2............................................................................................................................................5
(f) Outline the market research systems used in gathering and managing marketing research. .5
(g) Define the stages of the marketing research process.............................................................6
(h) Collect market information to identify new product opportunities.......................................6
(I) Identify new market opportunities.........................................................................................8
TASK 3............................................................................................................................................8
(j) Define the strategic planning process.....................................................................................8
(k) Outline the segmentation, targeting and position process.....................................................9
(l) Define the concepts, advantages and disadvantages of the Decision-Making Unit...............9
(m) Describe the concepts of the Decision-Making Process for consumers and........................9
organisation................................................................................................................................9
TASK 4..........................................................................................................................................10
(n) Develop a marketing plan that supports the achievement of business objectives...............10
(o) Identify the most appropriate marketing tools that meet business and customer needs......11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Marketing management is the process of developing strategies and planning for product
or services, advertising, promotion and sales to reach to the desired customer segment.
Marketing is the process which is used to determine what products or services may be of interest
to customers and the strategy to use in its sales, communication and business development
(Pohlman, 2015). Apart from this, the role of marketing management is to bring the clear
understanding of marketing concept for any business firms to raise its profit expectation. This
report will be carried on Costa Coffee, which is the British largest coffee-house company, with
their operations situated world-wide. This report will cover the aspects relating to opening new
business into the other company, with major aim to enhance the customer base and profitability.
Apart from this, report will put its focus on formulation of the marketing plan with introducing
the new products, its pricing strategies and also with targeted customer's.
TASK 1
(a) Define the marketing concept
The marketing concept is the complete philosophy that firms should analyse the needs of
their customers and then make decision to satisfy those needs, better than the competition. Most
of the firms today have adopted various marketing concepts (Weinstein, 2017). These concepts
are marketing, selling, product and production. In context with Costa Coffee, which is the market
leader of Coffee business in an entire UK, uses product and marketing concept mainly along with
focus on production of their coffee items. Because of these marketing concept, this coffee giant
has gained high brand image and reputation in their customer minds. As, Costa Coffee is looking
for new place or host country to expand their coffee business to gain new customer base for
enabling the business sustainability and profitability. These marketing concepts would help
Costa Coffee to expand its business to the another nation. The Costa Coffee has decided to
expand its business to Brazil, where selling, product, marketing and production will enables the
statutory position for this coffee brand.
(b) Define the stages of the marketing planning process
Marketing planning process is a set of steps which provide guidelines about how to sell
your product in the market within the specific period of time where, it involves which

promotional market strategies should be adopted to make your product saleable in the market
(Lam, 2012) The steps of marketing planning process are listed below:
 It involves the action plan development in which you decide your goals that what is your
final destination. In this planning process, companies mission should be clearly
understood.
 To analyse your current situation with different marketing tools like SWOT analysis or
else we can analyse by auditing market, which can help to find out the current position.
 To develop marketing strategy which involves all the marketing tactics available for the
best promotion of the product. In this phase, different approaches can be applied to target
market for best results. The final planning process executes about employing, executing and evaluating where
operational level activities are performed. In this you you have to allocate your resources,
make budgets for implementation of discussed strategies.
(c) Assess the difference between transactional and relationship marketing
Transactional Marketing Relationship Marketing
This strategy, where the business focus is more
geared toward making the higher sales
along with increased revenue.
It is the strategy in which business focus is more
on building long term relationship with their
customers.
The time boundary of transactional marketing is
short lived.
The time boundary of relationship marketing is
far-reaching.
In this quality of product is primarily focused In this quality is focused on all the functions.
The main goal of transactional marketing is
customers acquisition.
In relationship marketing the main goal is all
about customer acquisition, customer
retention and customer recovery.
It is orientated towards single purchase. It encourages towards repeat sale.
The importance of employees for business The importance of employees for business

success is low. success is always high.
(d) Explain the difference between marketing mix planning for product-based and service
based organisation
Basis Product based marketing Service based marketing
Meaning It refers to the process in which the
marketing activities are aligned to
promote and sell a specific product
for the particular segments
It implies the marketing of an
economics activities, offered by
the business to its clients for
adequate consideration.
Transfer It can be owned and resold to
another party.
It is neither owned nor transferred
to another party.
Tangibility They are tangible, so customers can
see and touch it, before coming to
the buying decision.
They are intangible, so it is
difficult to promote services.
Quality comparison Quality of the product can be easily
measured
Quality of service is not easily
measured.
(e) Assess the role of the internet in modern marketing
At present, the role of internet is increasing day by day where companies are shifting
towards digital marketing as it plays the vital role for the success of any organisation. In simple
words it can be said as the process of promoting products, brands, or services through internet.
Due to the worldwide range of internet has made possible for businesses to increase numbers of
new customers and has redefined relationship between business to business and business to
customers. Some of the importance of internet for modern marketing are:
 It helps to increase the visibility of your business.
 It enables for more detailed market research.
 It helps to survive with the competition in current market.

 To connect with customer, internet market is much more easier.
 It helps the business to make faith in their customers that their business is active
and working for progress. It allows for two way communication with customers.
TASK 2
(f) Outline the market research systems used in gathering and managing marketing research
For an accurate marketing development strategy, it is necessary to do brief marketing
research to avail the valid information about any global business expansion. Costa Coffee has
decided to open their coffee business to the Brazil, which is completely new location for them,
with several risks and threats for this brand (Lee, 2016). For overcoming such risks, management
of the Costa Coffee needs to do explanatory marketing research to identify an exact
opportunities for this global expansion. This research will be conducted in major cities of Brazil
such as Rio de Janeiro, Sao paulo and Brasilia, to accumulate the interest of local people over
the coffee habits & preference. For this, primary research is the first prefer to understand taste &
behaviour along with different variables such as income level, affordability, choices & social
factors.
Also, the brief secondary research shows that Brazil is the highest producer of Coffee
product, which is an excellent opportunity for Costa Coffee to raise their business to the Brazil.
The primary research will show the exact number of local people, who are interested for having
coffee and also, with purpose to know their awareness toward the Costa Coffee existence. Along
with this, secondary research will help to analyse the positive and negative factors of the Brazil.
(g) Define the stages of the marketing research process
As, Costa Coffee has decided to expand their coffee business at the global level, they
needs to conduct the marketing research in order to realize the suitable and real opportunities or
competitive advantage. Organisation needs to follow each and every steps of this marketing
research process for the global expansion which is as follows:
Defining opportunities: This is the primary stage, which majorly focuses for finding real
& actual opportunities for doing the marketing research. In context with Costa Coffee, this stage
would enables the focal opportunity to expansion its business on the global platform.
Develop the research: This stage involves developing an analytical research plan to
know various tools & techniques regarding for conducting the research, In context with Costa

Coffee, company needs to conduct various interview, random surveys and observations with the
purpose to collect relevant information & data etc. for getting the exact results for this global
expansion.
Analyse data and report findings: Costa Coffee Ltd has to analyse the data collected
and picture out the conclusive findings for getting the scope for business expansion to the Brazil.
This involves the results before commencing the Costa Coffee business to the major cities of
Brazil.
Taking action: This stage takes into the consideration for performing the initiative for
which this entire research is being carried on. If results are in favour of expansion, Costa Coffee
would be benefited for global expansion of their coffee to the Brazil.
(h) Collect market information to identify new product opportunities
Coffee industry is wide with growing opportunities for entering into new business. A,
Costa Coffee is engaged in providing valuable coffee to their customer's with an involvement of
digital era (Keller, 2012). Before commencing business to Brazil, it was identified that Brazil is
largest importer of coffee to different region with regular consumption by its own local people.
This has revealed that Brazil market would become successor for Costa Coffee business
effectiveness and profit generation. There is a potential requirements of the Costa Coffee
business, because of less coffee giants into that specific market. Also, this market has wide range
of resources along with low cost labour, which will be cost saving for this brand. The revenue is
the Brazilian coffee market revealed the fluctuation because of unstable business entity or non-
continuous flow of funds.
The research also shows that Brazil produces different range of coffee, which is not
available in United Kingdom. Hence, this will be an accurate opportunity for Costa Coffee for
raising their business with the major purpose to get large customer base and also served them.

Sources: Coffee production data, 2018
It was also found that Brazil has social media impact and platform user's. Costa Coffee
has strong command and support of their loyal customer over the social media stage, because of
push-pull scenario, for make their customer's emotionally attached with coffee products. Also,
local people of Brazil are large consumer's of the coffee with different taste & preferences.
Hence, this will be large opportunity for Costa Coffee to enriched their business, serve their
prospective customer with fullest of the resources (Kotler, 2015). They must also do the social
media and digital richness in the Brazil.
(I) Identify new market opportunities
As, it was discussed previously that coffee market is huge and wide, with business scope
and venture all over the globe. People's are highly attracted towards the coffee and they have
emotional attachment with that beverage. It is because, of its taste and essence which has ability
to reach to the different people. In context with Costa Coffee, there are current location have
almost 22 percent potential customer's with their loyalty and respect toward this coffee brand.
Coffee buyer's are belongs to every age group from 12 years to 60 years of age. But, from the
Illustration 1: Coffee production data(2017)

primary research, it was found that major customer's are classified on the basis of 18 to 27 years
of age people (Jones, 2012). This age group are the highest consumer's of the coffee. But,
through brief study, it was noticed that Brazil has all age group coffee consumer's, which is right
and suitable for Costa Coffee to expand and start their business into the Brazil. Because of
localization, these people has different coffee taste & preferences, which is easily available in
Brazil to fulfil the customer needs for every coffee service holder's.
From the brief research, it has been decided that Costa Coffee will target customer's of
18-26 years of age as their potential consumer' of coffee product for initial stage of business.
Also, targeting the other age group people depends on the suitability and future requirements.
TASK 3
(j) Define the strategic planning process
It is an organisational managerial activities for planning and implementing strategies to
achieve common goal. It is considered as long term planning process for effective and efficient
attainment of organisational goals. Its primary purpose is to connect your mission defining your
business purpose with vision describing what you want t achieve. The strategy that should be
adopted by an organisation for enhancing planning process is mission and objectives,
environmental scanning, strategy formulation, strategy implementation and evaluation and
control.
The mission and objectives is guided by the business vision where financial objectives
are involved to measure sales, target and earning growth. In environmental scanning you should
analyse your organisation internally where you can identify strength and weaknesses where
external analyse about opportunities and threats. In case of strategy formulation, the firm seeks to
achieve competitive advantage over its rivals on the bases of cost and differentiation while in
strategy implementation the firm target is to maximise the use of resources and to motivate its
employees to complete its objective. And evaluation and control strategy helps to monitor and
try to make necessary changes as required.
(k) Outline the segmentation, targeting and position process
For the global expansion, Costa Coffee has decided to do STP analysis on the basis of its
business suitability and results drawn from it brief research study. The STP analysis is as below:

Segmentation: Costa Coffee will segment the customer's on lifestyle basis, which reveals
that People thinks coffee as the “most valuable and premium beverage product with high loyalty”
towards it. Demographics involves the coffee consumer's from age group of 18 to 26 years of
age. This has planned for initial stage of the coffee business.
Targeting: Costa Coffee's will target their customer from middle to high level people.
For this, they will offer both high and low range coffee. For targeting the high end customer's,
they will offer “Bujumbura” which is rarely available coffee in the world. Also, they will target
their customer's on the basis of behavioural aspects such as hard core loyalty and “love towards
drinking coffee”.
Positioning: Costa Coffee has decided to position their customer's through social media
and digital influential. Social media includes Facebook, Twitter etc. to continuous attain the
customer's and solve their queries. Digitalisation such as quick customer response, feedback etc.
(l) Define the concepts, advantages and disadvantages of the Decision-Making Unit
The decision making unit is the collection or team of an individual who participate in a
buyer decision process. Generally, DMU relates to the business or organisational buying decision
rather than to those of a family. It is basically considered as buying centre, which brings together
“all those members of an organisation who become involved in the buying process for particular
products or services. The major advantage of Decision making unit is its facilitation in the easy
buying for any products, irrespective of any shortcomings or lack of resources and planning. It
also helpful in providing platform for composite buying of any products or services.
TASK 4
(n) Develop a marketing plan that supports the achievement of business objectives
Brief introduction: Costa Coffee is the leading coffee-house company, Which is based in
United Kingdom, whose major business is to supplying the different coffee products through
their own outlets. Franchisees of the costa coffee is spread over the entire globe. They offers
various popular coffee along with other beverage services.

Vision & Mission: The mission is to “Save the world from mediocre coffee”. Also, there
vision is to “Serve the best coffee in a real lifestyle style”. There tag-line says that “We are made
for starting loving you coffee”.
Strategic objectives: The strategic objective of the Costa coffee is to maximise the coffee
selling in all over the world. There main target is to extend the customer base with pure service
support along with adding new coffee's into the portfolio (Tadajewski, 2018). They are aims at
increasing their sales by 2 percent through global expansion in the Brazil, including three major
cities.
Products & services: Costa Coffee offers various coffee products such as flupincci, nuts
and castabariz as different coffee products. They also offer both hot and cold coffee with support
with beverages. Through, this global expansion, Costa Coffee will provide different local and
popular coffee to the Brazil people such as Filipino, which is rarely provided by any other
coffee-house, because of affordability. In simple, Costa Coffee will Filipino as their major
products with beverages.
Marketing mix: This marketing mix will mainly consists of price, place and promotion.
They will uses differentiation strategy for pricing, in which they will offer coffee varies with
both high and low end range. They will charge premium pricing for Filipino, which is the
luxuries one. This low ended pricing is because of income affordability of people. In place
factor, Costa coffee will open its outlets in 3 major cities of Brazil namely Sao Paulo, Brasilia
and Rio de Janeiro. Promotion strategy includes advertisement through social media platform,
TV advertisement, radio and other valuable sources of the Brazil. Distribution and supply chain
will cover the innovative tricks such as direct sales, sales promotion and people engagement
through endorsements and sponsorships. Costa Coffee will sponsorship their money in different
welfare program for effective promotion of their products/services.
Budget: Costa Coffee has decided to take initial three years calculation of the budget, to
operate and maintain the business operation in the Brazil is as follow:
PARTICULARS 1st Year 2nd Year 3rd Year
Initial investmemt 10000 12000 15000
Borrowings(Bank loans, credits) 7000 8000 10000
Retaining earnings 5000 7000 10000
TOTAL 22000 27000 35000

MARKETING OUTLAY
Promotion activities 8000 10000 11000
Sales publicity 6000 10000 11000
Districbution and supply expenses 3000 10000 9000
Salary and wages 7000 10000 15000
TOTAL 46000 67000 81000
(o) Identify the most appropriate marketing tools that meet business and customer needs
For effective meeting of the customer needs, it is important to analyse the each and every
needs and wants using the ABC analysis, which is as follow:
ABC analysis is the marketing tool for identifying and analysing the customer needs,
which is classified on basis of three different categories:
Category A: It represents about most valuable products or customers that business entity
have. It consists of the products that contribute heavily to overall profits without eating too much
resources (Miquel-Romero and et. Al 2014). This category has been considered as smallest
category reserved exclusively.
Category B: This category represents about the middle of the road customers or products.
This needs are basically for potential, which can easily be fulfilled. But, this consumes resources
at the greater extent.
Category C: This category is all about hundred of tiny transaction that are essential for
profit, but don't individually contribute much value to the company. This is the category where
most of the products or customers will live for longer period of time.
In context with Costa Coffee, company needs to focus on their allocation of resources for
proper fulfilment of customer needs and desires. Along with this, they must use the social media
and digital era to keep track and update the customer needs and also for the purpose of services
recovery. This can be done with help of almost updated technology, information and valuable
resources etc.