Report on Marketing Principles and Practices at Costa Coffee

This report provides an analysis of Costa Coffee's marketing strategies, focusing on market positioning, the marketing mix (7Ps), strategic decisions using the BCG matrix, and relevant marketing theories such as Maslow's hierarchy of needs and communication mix theory. The analysis covers Costa Coffee's segmentation, targeting, and positioning strategies, emphasizing their approach to different customer demographics and social classes. The report also evaluates the effectiveness of Costa Coffee's marketing efforts, including promotional activities and social media engagement, and concludes with an overview of how these strategies contribute to the company's competitive advantage and sustainability in the coffee industry. Desklib offers a platform for students to access this and other solved assignments.

Principles of Practice
of marketing

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
Positioning of the market.................................................................................................................4
Marketing mix.................................................................................................................................5
Strategic decision.............................................................................................................................7
Marketing theories...........................................................................................................................8
Maslow’s hierarchy of needs.......................................................................................................8
Communication mix theory.........................................................................................................9
Costa coffee evaluation of the effectiveness of their marketing efforts........................................11
Key performance indicator........................................................................................................11
Social media...............................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
In today’s competitive environment an business is required to invest and mainly focus on
marketing strategies for increasing the sustainability in the business and to gain a competitive
advantage in the industry. The positioning of the competitive market is required for targeting and
segmenting the customer base in an effective way. Marketing is done to promote the products of
an organization and this also helps in better positioning of the company in a competitive
industry. Marketing involves various indulged activities that are promotion and advertisement
and these factors help in reaching the potential customer of the market effectively. This report is
the analysis of Costa company which is a coffee outlet that was founded in 1971 and its
headquarters are located in Dunstable. This report is the analysis of the marketing mix of Costa
and it also involves the positioning of the company in the market. This report also involves
marketing strategies and theories followed by the organization.

MAIN BODY
Positioning of the market
This is usually known as a tool which is used as the strategy to market a product with the
segmentation of the customer base and then targeting these segments as per the preference of the
customers and audience and then lastly positioning the brand as best possible way so that they
can reach to the customers(Iriantini, Soemaryono, and Herawati, 2021).
Segmentation
As segmentation divided the market into various segments according to preference and
characteristics. Costa company has segmented their market with the main demographic factors
that are professional level, age group, and social class. As Costa coffee has divided its loyal and
potential customers into age groups. Therefore, this company adjusts all their choices and flavour
of coffee according to the preference of customers. As it has been analysed that teenagers usually
prefer hot chocolate over espresso as they love sweet-tasting beverages. As adults usually prefer
drinks over caffeine as it keeps them active. As in segmentation social variables also play a vital
role as It is defined by the customer income level and their ability to buy(Kotler, Armstrong, and
Opresnik, 2018).
Targeting
After segmenting the customers targeting the customer base has started as Costa looks after all
the potential segments and does not use any specific strategy as they find it risky. Therefore, they
use a differentiated strategy which helps in developing the marketing mix of each segment. As
Costa coffee usually targets the audience who are desired coffee but other than espresso and
latter as by this targeting they had earned huge sales in the business. Costa coffee targets upper-
class customers which will turn more profitable to the organization as its brand name also
symbolizes the luxurious, therefore, these upper classes will pay a little more for coffee(bin Abd
Latib,2019).
Positioning
As for positioning costa company has launched their advertising campaign on TV to position all
the products and brand image in customer minds. As they had advertised where the

advertisement was about money revolving around coffee machines and trying to make a perfect
cup of coffee then it ended as the company is trying all possible ways to make the coffee up to
customer preference which shows that each staff and employees are passionate and highly skilled
towards there work(Kotler, Armstrong, and Opresnik, 2018).
Marketing mix
This is a marketing tool that combines various components to make a solid product brand which
further helps in selling that company’s product and services. This is a tool that is used by the
organization to promote their products and it also helps in deciding to sell it at the right time and
right place. Each product in the organization is sold according to the promotional and marketing
strategy. This tool is being used by Costa coffee which promotes the product and positions the
product at the right time, place, and price and marketing mix is involved with 7P’s of marketing
which helps in expanding the business and that are product, people, place, physical evidence,
promotion, price, and process(bin Abd Latib, 2018).
Product
Product is the main commodity that fulfils the desired requirement of the audience in the
industry. A proper survey and research are made while developing a product and introducing it in
the industry. The main product which Costa coffee is selling is coffee with many variants which
are appreciated by the audience that are cold coffee, hot chocolate, tea, special drinks, and ice
blends. Other supplementary products are being sold by Costa coffee which is sandwiches. As
the product is considered as an important point to be considered in marketing strategy as Costa
coffee usually follows pull strategy over push strategy in the business(Chernev,2019).
Price
This is the important factor of an organization which is a product as per the quality of the product
and this factor is allocated with the profit and loss of the organization. As this company usually
believes in keeping the pricing at a premium level according to the serving quality and variety of
products. Costa coffee stays on their words and commitment as serves the best possible quality
and taste with supplementary food to their customers which increases the customer dining
experience in the organization. As Costa company looks after the printing but moreover it they
are desired to serve the best quality and value to there customers. This organization usually

follows the cost pricing method with a focus on the generic strategy of the company(Hanlon,
2019).
Place
The place is the placing of the product and store as the right place where an organization can
achieve huge profit and customer base. As Costa coffee has the outstanding preference and
presence in Britain with 1000 stores and they found in the airport, malls, and premium places as
it has placed their stores according to the positioning of the market so that they can achieve a
huge customer base by which huge revenue can be generated and company can expand globally
in the industry. As they mainly focus on upper-class customers so they had positioned their
stores close to the premium place and near various company’s headquarters(Tadj, and Djemili,
2021).
Promotion
This is a marketing and promotional process that involves, direct marketing as Costa coffee
usually believe in Tv ads campaign by which they can reach the customers at a global level and
can attract the customers towards their business. Another marketing strategy they used to follow
is the word-of-mouth strategy of marketing which is usually a process of discussing the brand
which gives a positive view to the brand as customers are attracted by the advertisement as Costa
serves the true quality and value to their customers and also creates social engagement and brand
trust in the business. They also do social media marketing which helps in increasing the customer
base of the organization and they had made a page on the social websites which make the
employees know about the organization and their discount offers in an effective manner(Mishra,
and Rishi, 2021).
People
People are the reliant resource who run the organization as Costa company has top management,
human resource, and staff members who runs the organization effectively as they are hight
skilled and knowledgeable as being a part of the business they had increased the customer base
by giving the best experience to the customers by communicating well with the customers. They
also work in three values which are taking, passion, and team working. In this factor, it is
important to hire potential employees as they are the person who directly interacts with the
customer.
Process

This is known as the business process which is used to make and deliver the product and services
to the end customers and it also helps in reducing the cost of business operations and increasing
the level of productivity and profitability effectively and efficiently which helps in gaining all the
business objectives effectively. This factor also motivates the employees to attain their personal
and organizational objectives in the business. Costa coffee has a specific department of each
process to manage is systematically so that employees do not compromise with the quality of the
product(Atlija, 2018).
Physical evidence
Physical evidence is a service which is served by the organization to the customers for making
them as there loyal or permanent customers so that whenever any local customer thinks of coffee
go to the Costa coffee as they had also maintained a well and hygienic luxurious interior of the
stores which attracts the audience and this also serves a positive experience to there customers as
this company also make feedback programs which helps in maintaining their standards
effectively and in the development of strategies.
Strategic decision
This is a planning and strategy decision that can be evaluated by the BCG matrix tools to make
effective strategies and decision to make the business sustainable and by this organization can
also increase the rate of profit and also helps in reducing the functional and operational cost of
business as this model is effective for analyzing the growth of the individual product in Costa
coffee and it also evaluates the market share of the same product. The analysis of the BCG
matrix is described below.
Stars
These are the products of the organisation which has a high market share in the industry and
these products also help in expanding the business and maintaining the market position and
gaining a competitive advantage in the industry. As in Costa coffee, all the coffees has a high
market share but out of this hot chocolate is selling the most in the industry as they are loved by
teenagers and it generates a large profit flow and this product also remains successful in the
industry(Damarwulan, Ramdansyah, and Lutfi, 2021).
Cash cows

These are the products of the organisation which has low market growth but high market share in
the industry. As these products are known as the leaders of the market base as these products
maintain their position in the industry without any investment as Costa coffee had lattes of
different flavours which are known as the cash cow products of this company and in this high
profit is generated and helps in expanding in the market base with there taste.
Question marks
These are the products of the market which has market growth but low market share. These
products are known as intensive and it also requires a huge amount of investment and various
resources to increase the market share of these products. The investment of these products is
managed from the cash cow products as Costa coffee has the same coffees like espresso in
different quantity of milk has categorized under question mark as these products do not get
expanded in future but can go more down and become dog products(Homburg, Theel, and
Hohenberg, 2020).
Dogs
These are the products that have a low market share as well as low market growth in the industry
and these products are unable to sustain for a long time in the market unless in the industry there
any competitive products have been developed in the organisation. These are the products that
sometimes also make a loss as Costa coffee has some products like complementary and eating
products which do not has market growth and share in the market.
Marketing theories
Various marketing theories are applied in the organisation for the better internal growth of the
organisation. These are the theories that help in expanding the business by making better use of
resources in the business. As internal resources are allocated with human and financial resources.
These various theories help in maintaining the cost of the organization and it also helps in
effectively motivating the employee. These theories which are used by Costa coffee for making
business functions and operations better are described below.
Maslow’s hierarchy of needs
This Is known as the most popular theory of motivating employees in the organization and
fulfilling their basic needs and requirements which they expect from the organization. As there

are five levels of hierarchy that are considered to be important and required to be fulfilled in the
organization they are described below.
Physiological needs: These are known as the basic human and employees needs which are
required for the survival of a human being as these are health, food, water, shelter, and warmth.
These are the common needs which is essential to survive. This is the basic requirement and
Costa coffee had developed water coolers on every floor for the convenience of the employees
and in their, organization canteen is also made for the light munchies of employees which boosts
up their energy(Erragcha, and Babay, 2021).
Safety needs: After fulfilling the basic needs then comes the safety needs which involve security
and safety of the employees which is primarily concerned by any employee. In an organization,
each employee looks after safety needs which involve personal security, physical security,
financial security, and safety to health. Costa coffee provides these needs to their employees to
make them feel secure.
Social needs: After safety needs social needs to come in a hierarchy which is fulfilled by the
team members and co-employees as this need involves family, social groups, and friendship.
These needs are essential in the organization to get motivated and free-minded. As Costa coffee
sometimes organizes games in the workplace which helps the employees in interacting and
makes the employees feel fresh(Laczniak, and Murphy, 2019).
Esteem needs: This is the next level of hierarchy in which employees get motivated by
appreciation, rewards, recognition, and self-respect in the organization. Costa coffee always tries
to appreciate a hard-working employee and reward it with some bonus points which makes them
motivated and other employees also get motivated and desired to work hard.
Self-actualization: This is the last and final level of hierarchy in which when employees are
individually focussed with their goals and has their target to fulfill the task and in this step
employees try to show the best version of themselves which helps them grow personally and
develop their skills which are also beneficial for the organizational profit and growth.
Communication mix theory
Communication mix theory is a marketing theory that helps in delivering the brand value to their
potential customers as this involves various promotional techniques and tactics which is used by
the company to develop the long-lasting relationship between their customers and this is a tool

that helps the company to communicate with there potential customers effectively and this can be
done by various ways as it involves the various communication way that is described below.
Advertising
As this is considered as the most effective tools which are used to promote of organization in a
large scale and it can be done by various advertising campaigns which are musical, emotive and
catchy as that attracts the employee most. Costa coffee uses Tv ads to promote its business
effectively(Semenov, 2021).
Personal selling
This is also known as the way of advertising in which customer appreciates any of the actions
related to the business moves that are known as personalization and this helps in building a
positive relationship towards the customers and it is also known as personal selling when an
organization is down up to customers requirement.
Sales promotion
These are the sale offers which are used to attract the customers by serving low rate products and
making new offers to the stores and it also involves contest and sample-based products which
attracts the employees to try new products and by offering the discounts and offers also increases
the customer retention.
Public relation
This involves public relations which are earned by the media capture about the product in the
industry. In this Costa, coffee had created information which is shapes and repurposed the
objective and it also builds and positive image in the industry. As this also helps in increasing the
customer base(OHADI, and TAROKH, 2019).
Direct marketing
This is a marketing approach that is done by increasing the customer interaction and this is done
with the targeted market it also specifies the target audience of the organizations as Costa coffee
usually does by email campaigns so that customers can revisit in the future.

Costa coffee evaluation of the effectiveness of their marketing efforts
Key performance indicator
This is a way that is used by Costa coffee for tracking and evaluating the performance of an
organization for effectively attaining organizational goals and objectives. This performance
indicator helps in mobilizing the performance of employees and KPIs are developed in many
steps which involve establishing the goals then establishing the success factors and then
establishing carious KPIs and then collecting all the measures for all the operational aspects and
then lastly it calculates all the metrics from the measures. As this is the tool that helps the
organization to attain the organizational goals and also helps in meeting the effective strategies
and this also helps in fulfilling the goals of the organization)(Okhravi, and Rayat, 2019).
Social media
Marketing efforts can also be measured by social media effectively as Costa coffee determines
the SMART goals in the organization than had track the metric which is the audience growth
rate, likes vs share and comments to the organization post an advertisement as this tool analyses
all the performance and customers view then it organization measures and analyses the progress
of the organization according to the goals which help in developing the product and it changes
effectively and according to the organizational and customer needs and requirements of the
customers. These factors also monitor and make the appropriate strategies according to the
marketing effort analysis. Social media is an effective tool that is used to analyse all the
marketing efforts done by Costa coffee(Callens, 2020).

CONCLUSION
This report has concluded that various marketing tools are used by Costa coffee to analyze and
measure all the essential points of the organization as this organization has used Marketing mix
is important which helps in attaining profit and expanding the business effectively. STP is also
used in the organization to segment and target the audience effectively and effectively position
the product. BCG tool is also used by Costa coffee which used to analyse the highest and lowest
sell products of the organization. Various theories are used by organizations to make the
employees motivated and make the business operations work effectively that are communication
theory and Maslow’s hierarchy of theory. This report also concluded that there are tools that are
used by Costa coffee which are KPIs and social media.