Strategic Marketing Plan for Costa Coffee: A Comprehensive Analysis

This report provides a strategic marketing plan for Costa Coffee, focusing on improving the brand and achieving a sustainable competitive advantage. The plan includes a SWOT analysis, stakeholder analysis, and a SOSTAC framework. The report evaluates the political, economic, social, and technological aspects (PEST) of the market. It suggests recommendations for a targeting, positioning, and branding strategy, along with marketing mix recommendations. The plan also considers challenges, ethical issues, and risk management, including a financial forecast of the return on investment (ROI). The analysis highlights the importance of adapting to consumer preferences, particularly the increasing awareness of coffee's health benefits and addresses the competitive landscape. It also evaluates the impact of the strategic vision and direction of the organization on the marketing planning process. The report also includes feedback and suggestions for improvement from an instructor on the work done.

BELOW IS THE FEEDBACK FROM THE WORK THAT I HAVE DONE. THE
QUESTION AND THE WORK IS CONTAINED IN THIS ATTACHMENT AS
WELL.
(4.1,4.3,4.4,)
What you did well
Your introduction was clear. It was obvious your plan centred around moving Costa towards a
health orientation. You used a couple of frameworks covered on the module e.g. SWOT and 7Ps.
You did discuss risks, though there was not an obvious section headed risks.
Things to improve going forward
It would have helped to declare which planning framework you were using e.g. SOSTAC and follow
the prescribed order e.g. PEST could usefully have been presented ahead of SWOT. There needed
to be more narrative support of the models was required and key take-outs from each model
needed to be made more explicit. Make sure you label sections properly e.g. stakeholder analysis
was PEST. There needed to be way more coverage of segmentation targeting and positioning.
Stronger justification was needed for some of the decisions made e.g. for going into health benefits
and changing vision statement. There could have been more use of models in support of the mix
section e.g. total value concept, brand framework. Properly populate the references section there
were only two references listed when clearly you had used more. Above all answer all the elements
required in the assessment e.g. there was no discussion of fit to vision
20/70
Bev (4.2,4.5,4.6)
What you did well:
You have included a lot of information from the annual reports, and you seem to understand the
theories around ROI.
Your reflection gives a good account of your journey through this module, and also how you hope to
apply your new knowledge in your career.
Things to improve going forward:
Although you have included a lot of information from the annual report, you have not discussed
these numbers enough in your own words to rove your understanding. At times it reads a bit like a
list. You need to give more explanation - how are Costa maintaining a dominant position, why have
their profits increased over the last four years? If the return is only going to 11% instead of 11.81%,

2
is this a problem? How do you know your competitors aren't looking into health benefits?Your
reflection is too brief.Please put ALL references at the very end of the report, not after each
section!!
14.5/30

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1 Portfolio content
1.1 You must write a strategic marketing plan for an organisation or for a
strategic business unit within your responsibility (or for an organisation with which
you are familiar). To do this, you will need to carry out a critical evaluation of the
SWOT issues facing the organisation, including a stakeholder analysis, and then
write a strategic plan that addresses those issues. The plan must consider the
following:
i) Recommendations for a targeting, positioning, and branding strategy that will
enable the organisation/strategic business unit to achieve sustainable
competitive advantage in future.
ii) A critical evaluation and recommendations for a marketing mix that will
support the strategy.
iii) A critical review of the challenges facing the implementation of your plan
iii) Ethical issues which may arise as a result of your plan
Guide word count: 2,000 words
1.2 You must apply the profit impact marketing (PIMS) methodology to your
marketing plan. This will involve the development of a financial forecast of the return
on investment. You need to clearly evaluate all revenues and costs associated with
the plan. You should also build in an assessment of the risk associated with your
plan.
Guide word count: 1000 words
1.3 Identify the key external and internal areas of risk for your organization (or
one with which you are familiar) in developing and delivering a marketing plan.
By referring to examples, illustrate how you would identify strategies to minimize
these areas of risk in order to achieve organizational objectives.
Guide word count: 500 words
1.4 You must critically evaluate how the strategic vision and direction of your
organization (or one with which you are familiar) impacts on the market planning
process.
By identifying each component part of your marketing plan, discuss how
effectively your marketing plan supports the organizational strategic objectives.

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Identify the level of importance of each component part of the plan in relation to
achieving organizational strategic goals.
Finally, critically evaluate the process that is required in order to secure approval
for marketing plans within your organization.
Guide word count: 1000 words
Task 1: Market Plan
Abstract
Marketing plan is about creating a systematic approach to the achievement of
marketing goals. (Doyle, 2016)
This paper explores how Costa brand can be improved to gain a sustainable
competitive advantage. Costa brand is mainly about the taste of the coffee served by Costa
Coffee and the health side of coffee has been totally left out in developing the brand. Coffee
has tremendous health benefits to consumers (Gamonski, 2018). As such, using health
knowledge to improve Costa brand has the potential to guide Costa Coffee on how to
introduce healthier range of coffee products it serves and to create new commercial interest in
the Costa value because value is powerful (Kelly etal., 2017) \
SOSTAC is one of the important marketing model which develop for strategic marketing
communication. There are several fundamental aspects included in marketing that are
explained under here:

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 Situation: Costa company exactly exact in China and now they need to increase their
department in new areas.
 Objectives: The company has objectives to develop their effectiveness and
productivity through establish operations and functions in new areas. Therefore, it
will help to focus on market demand and requirements.
 Strategy: Costa company need to use joint venture strategy that help to attain more
creative work performances in new areas.
 Tactics: There are several tactics exist which could be used by Costa to attain desired
results. For instance, social media, online promotion, etc. elements consider to
develop target market.
 Action: Further, in respect to take actions, the company able to implement more
creative work performances. In which they use expansion actions to develop their
target market.
 Control: Controlling activities consider to attain more systematic work performances
at workplace in systematic manner. Therefore, it establish to attain creative work
performances.
PEST analysis
To consider PEST analysis, macro environment considers important role in the
business to focus on following activities:
 Political: In the market, current political environment considers conducive
development of company. Costa Coffee can easily compete with Starbucks so that
company will not be facing any issue and restrictions which create obstacles in
developing company’s performance.

6  Economic: In economic terms, it can be stated that consumption of coffee is
continuously growing which helps Costa Coffee to increase their operations. In this
regard, company has high consideration to develop their market in international
environment that assists to achieve the set aim and objectives.
 Social: In different areas of the world, it can be stated that there are different ways
exist in which understanding and interpretation develop regarding coffee culture.
Coffee become fashionable city in modernization so that new evaluation index
develop systematic work performances at workplace.
Technological: Costa coffee has advantages to implement advance technology to perform
desired results.
SWOT Analysis
Strengths Weaknesses
-Costa Coffee has a strong financial
backup and the required competencies to
make it more competitive.
-Costa Coffee has loyalty programs
that enable it to retain its customers across the
globe.
-Coffee shops are artistically designed
to attract customers
-Product diversity
-Costa Coffee has limited the growth of its
brand to the cultural taste of quality coffee
-Costa Coffee’s product diversity does not
consider the health side of the coffee product and
therefore, may expose consumers to health risks
-Costa Coffee’s marketing strategy does not
focus on educating the consumers how the coffee
products they take impacts their health.
-Costa Coffee has limited its market share to
cover only the economically able classes of people.
Opportunities Threats

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-The local market has room for
product innovativeness
-More people are becoming informed
that coffee is a healthy product and is not
harmful to the body
-Many people regardless of their
purchasing power are willing to purchase
coffee for its nutritional value
-Increasing business competition that may
take advantage of winning the market by exploiting
the health side of the coffee bean.
-Existence of government regulations that ban
sale of unhealthy products in the market.
Table 1 showing the SWOT analysis to be used to create a marketing plan for Costa
Coffee (Joe, 2014; Bloomberg, 2013)
Stakeholder analysis
Costa Coffee’s core business is in the industry in which consumers around the globe
are beginning to realize that coffee drinking is not harmful to the body. In fact, the drink has
some health benefits and people are being encouraged to continue taking it as health
problems such as stroke and type II diabetes are reduced with increased coffee intakes per
day (Gamonski, 2018). In this regard, coffee shops are highly likely to experience a high flow
of consumers based on the encouraging results obtained from surveys done to determine the
knowledge people have about the impacts of coffee on health (Teas & Agarwal, 2000).
Coffee is grown in particular areas that have moderate weather conditions and
therefore, the presence of extreme weather conditions is challenging the production of coffee
beans making the production costs go up when mitigating climatic effects (Climate.gov,
2018). Thus, the cost of coffee has been on the rise especially to meet its increasing demand.

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The effort of recovering the costs has been difficult especially when there are global
economic disparities that reduce consumers’ purchasing power (Sapsford etal., 1997). More
so, due to high production costs, consumers that are economically disadvantaged are usually
unable to enjoy the coffee drink and even obtain its health benefits (Liang & Wu, n.d).
Sehrawala & Karaduman (2015) develop that customers are now purchasing coffee beverages
for the value they are finding in the product and because of this; they do not mind its high
price. Therefore, with intensive educational programs covering the economically
disadvantaged groups, these people will strive to be part of those that consume the beverages
because of the value they will see in the product.
In the United Kingdom, consumers are adventurous when it comes to food selections
and therefore, there is a need to have a wide range of foods and drinks in the food market
(Kemp etal., 2010). With a strong educational program and product branding, Costa Coffee
will be able to expound its market share in the country and have a more valuable relationship
with its customers in the long-term. In that, besides providing quality coffee, Costa Coffee
will be able to differentiate itself from its competitors in terms of the utilitarian ethical theory
it applies by selling what is best for people to take (Sehrawala & Karaduman, 2015).
As it is now, the growth of Costa Coffee is being challenged by threats of new
competitors in the market (Theguardian.com, 2018). In that, to start up a coffee business is
not a complex issue as low business capital is required and it is easy to operate coffee making
machines. The entry of a tough competitor such as Starbucks that is highly innovative and has
a well-known brand is likely to take over the market in UK and challenge the growth of Costa
Coffee internationally. Following relevant statistics from the year 2004, it is evident that
Costa Coffee is really struggling to outdo Starbucks in its home market (Joe, 2014). In terms
of the number of coffee outlets, Starbucks has had a higher number of them from 2004 to
2006 and it was only in 2007 that Costa Coffee was able to outdo Starbucks. Comparing the

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same statistics with other competitors like Nero, Caffee, BB’s and Pucchino, all of them have
been increasing their presence in the country except Pucchino that has had a constant number
of outlets over the years (Joe, 2014).
The coffee business in the UK has been left growing following the innovative efforts
of businesses. Therefore, competitors have little to differentiate themselves from each other
and therefore, it is important for business leaders in the fresh coffee to make use of what can
add more value to the product. Choosing to include the health benefit of the coffee product on
the product branding, will not only improve the value of the product but will make it stronger
than its substitute products (Joe, 2014).
In the coffee market, it seems that no competitor serves low quality coffee products
and Caffe Nero is one that is leading in providing high quality coffee and at a lower price
than Costa Coffee. Costa Coffee is the only one that serves its products at high prices. Hence,
there is a need of the firm to increase the value of its products to justify its high product
prices (Joe, 2014).
Vision
Costa Coffee has vision to deliver the best hospitality products and services so that
brand performance will be developed continuously. Furthermore, it also ascertains to
recognize people, guests and investors at workplace.
STP
To determine STP strategy, it can be stated that Costa Coffee considers a big appeal in
all age groups of people. Young and mature group of customers mainly targeted so that menu
designed for all categories of people. As per their tastes and preferences, quality needs to be

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maintained. Existing customers need to use effective value and segment upper and middle
class people. From the research, it has been identified that great successful outcomes also
developed that consider privilege class in a succeeding manner. New products in Costa coffee
also consider which assists to plan and implement new activities at workplace.
Total value concept
In order to determine total value in Costa coffee, it can be stated that companies need
to operate successful outcomes to understand about the products that are provided in multiple
ways. Experience is also increasing to enhance value and exchange systematic work
performance in the business. Furthermore, company should implement Wi-Fi access, improve
design, etc.
Brand framework
In order to implement the brand framework, Costa Coffee needs to focus and increase
awareness program that helps to achieve set aim and objectives in a systematic manner. This
is because; with the help of implementing unique customer experience, the organization will
become able to communicate successful operations and functions in the business. They
recommitting into business to make unique results and performances regarding coffee in the
world. At different locations, the company share their creativity and make successful
operations which ascertain to attain functional benefits.
How Costa Coffee can Leverage its Strengths to take Advantage of the existing
Opportunities that suit its Coffee Business and a Plan on how Costa Coffee can
reduce its Threats by addressing its Weaknesses
Recommendations for a targeting, positioning, and branding strategy that will
enable Costa Coffee to achieve a sustainable competitive advantage in future

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Costa Coffee has a strong financial backup from its investor Whitbread. Whitbread is
a focused company that allocates its resources in business ventures that create value for
money and the support it gives leads to the development of a unique and a strong brand with
a good competitive advantage (Whitbread, 2009). Using this advantage, Costa Coffee can be
able to establish a research and development department whose objective will be to develop
the “Costa” brand using the health side of the coffee bean. The department will make use of
the loyalty programs to study the health needs of each customer and establish how the
product diversity strategy can be employed to meet these health needs. The department will
also be tasked to establish the best way customers can be informed of the new products
developed to meet their health needs. Costa Company will support the new developments by
allocating resources required to support the research department in collecting the data
required and equipping the marketing department with the tools required to educate the
market. Marketing in this case also includes changing the artistic designs in the coffee shop to
reflect the health side of the coffee product.
In order to reduce the threats posed on the Costa Coffee’s business, the research
department needs to assess how the current product diversity has affected the impacts of the
coffee bean on people’s health and propose the changes required. To achieve this, Costa
Coffee will need to hire the required expertise to assess the products and guide on the new
range of products that the company needs to develop to improve the health of the consumers.
With the changes made, Costa Coffee will need to position its improved brand in the
health market and moving it from the coffee taste market. The market that the company will
now target is one that will also include the economically challenged as they are also
consumers that need coffee for health reasons. The “Costa” brand will have a totally new
branding as it will focus more on the impacts of coffee on people’s health. Thus, the market

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will not look for “Costa” brand for its cultural coffee taste but on the health value it provides.
The concept of the coffee taste will be secondary and will be promoted when associated risks
have been mitigated. This will be improvement on Costa coffee existing business model that
will seek to give the company further competitive advantage.
In order to reduce the threat of business competition, Costa Coffee needs to make the
required changes within the shortest time possible. The following would be the short term
goals and objectives that would enable the company achieve its vision.
New vision of the company will be: “To make the “Costa” brand be the best brand
that- maintains the health benefits of the coffee bean in the beverage production and offering
diverse products that meet the different health needs of consumers.”
Short-term goals Objective Timelines
-Understand the health
benefits of the coffee bean
-Establish how the current
beverage production processes are
affecting the health side of the
coffee bean
- Use the loyalty program
to gather data required from
consumers to establish their health
needs that can be met with coffee
products
-To correct the development
of the “Costa” brand
-To ensure that the Costa
Coffee business offers safe products
for consumers
-To guide in the development
of diverse products that are relevant
in the market
Immediately
Immediately
Immediately