Costa Coffee's Marketing Strategies: Principles and Practices

This report provides a comprehensive analysis of Costa Coffee's marketing principles and practices, focusing on its UK business operations. It critically evaluates the elements of the marketing mix (product, price, place, promotion, process, and people) and their impact on the company's market positioning and profitability. The report also examines the strategic decisions made by Costa Coffee, linking them to relevant marketing theories and highlighting their role in fostering a sustainable business environment. Furthermore, it assesses the effectiveness of the company's marketing efforts, considering factors such as customer loyalty programs and promotional campaigns. The analysis aims to provide insights into how Costa Coffee leverages its marketing strategies to maintain a competitive edge in the coffee industry, emphasizing the importance of adapting to market dynamics and customer preferences.

Principles and practices
of marketing

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Critical evaluation on using elements of marketing mix.............................................................3
Strategic decisions and relevant taught theories in the marketing efforts of organisation..........6
Effectiveness of marketing efforts...............................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Principles and practices of marketing are agreed on the ideas of the marketing that is used
by an organisation for developing effective marketing strategies. Marketing principles are those
principles on which the strategies of promotion are made. The principles as well as practices of
marketing process facilitates a business in introducing the products and services of a company to
its potential customer base. Within this report, Costa Coffee is a UK-based organisation that is
taken into consideration for demonstrating different aspects of this portfolio (Chen, 2021). The
company was founded in London in the year 1971 and is providing roasted coffee to caterers as
well as popular Italian coffee shops. This portfolio includes critical evaluation on using different
elements of marketing mix that are used by organisation in its UK business operations. Along
with it, the strategic decisions as well as the relevant theories in the marketing efforts of the
organisation are also going to be discussed in this report. Furthermore, there will also be a
critical evaluation on the effectiveness of the marketing efforts of the company.
MAIN BODY
Critical evaluation on using elements of marketing mix
Marketing mix is defined as a set of elements which are required by an organisation in
order to foster its products or brand in an effective way within the market with an objective of
earning as well as maximising profitability of firm. For doing so, the Costa Coffee focuses on the
different elements of the marketing mix which are product, price, place, promotion, process, 7Ps
of marketing mix. Recognising and organising the various elements of marketing mix facilitates
a company in making its marketing decisions of its business profitable at every level. The
marketing mix strategies of Costa Coffee company facilitates the organisation in standing itself
at the competitive level within the market for attaining organisational goals and objectives. These
business strategies which are based on the marketing mix of Costa Coffee assists the brand in
getting success (Dadwal, 2019). The marketing strategy of the organisation facilitates a company
in positioning itself at the competitive level within the market as well as meeting the goals and
objectives of organisation. The marketing mix of Costa Coffee is explained as under:
 Product: The respective organisation is considered as one of the most famous outlet of
the coffee chain at the global level. The company supplies coffee, snacks as well as
beverages which are its key products. Costa Coffee provides a wide variety of flavours as

well as variants in the coffee product. The organisation mostly offers Latte, Americano,
Cappuccino, Mocha, Flat White, Expresso and many more. There are also some of the ice
blended products which are offered by the respective company are Mocha cream
Frostino, Coffee cream, Lemonade, etc. Costa Coffee also offers its products to the
caterers and businesses. For instance, the organisation supplies its technologies such as
vending machines to the corporate offices as well as the colleges under brand Costa
Express. Various products that are supplied by the company is considered as the main
driver in the business strategy of the organisation because it is using a pull strategy in
order to collect a large number of customers and be liked by them the products of the
company. The organisation has faith in believing wow moments to its market share along
with the coffee which is its key product (Costa Coffee Marketing Strategy, 2022).
 Price: The company is offering a wide variety of prices within its marketing mix, still it
is impacted by the competition in the market and is lightly premium. The company is
following premium pricing strategy as the brand image of the organisation is superior.
Costa Coffee always considered the price as the secondary for every audience and
concentrates on the delivery of the products at high quality. The organisation is offering
two kind of beverages in terms of size and these are large and small. The price of the
products are directly related to the order of the quantity. The company is also providing
the coffee vending machines under the Costa Express. The pricing of those machines in
comparison to the competitors of the company such as Cafe Coffee Day, Starbucks, etc.
is competitive (Dominique-Ferreira and Roque, 2020). There is variations in the pricing
of the coffee as per the supplements which are included in the coffee such as cream, extra
chocolate and many more. The pandemic situation of COVID-19 has greatly influenced
the sales volume of the company like at that time the stores were closed because of the
economic lockdown but they were reopened after the pandemic situation got improved.
The revenue of the company in a year is nearby $1 billion.
 Place: The company has conducting its business operations in around 3000 outlets which
are spread over 30 nations. The organisation is operating over 2100 restaurants of the
United Kingdom and more than 1200 outlets spread overseas (Marketing Mix of Costa
Coffee, 2022). The outlets of the Costa Coffee are primarily targeted at the people who
are rich as well as belongs to upper middle class. The outlets of the respective

organisation can be primarily found at the airport, in the shopping malls and many other
places where there is presence of high class people. The company has also made changes
in its menu cards as per the nation in which it is conducting its business operations in
order to capture a large number of market share. The websites of the company are also
facilitating the users of the company for placing the order through the mode of online that
can be supplied through a delivery partner within the respective area.
 Promotion: The company is considered as a premium brand and is not having its
dependency on very much advertisements on the print media, television and on other
sources (George, 2021). Costa Coffee is following a very significant marketing strategy
of getting its publicity through word of mouth from its loyal market base because the
respective organisation is not only supplying the coffee but also providing the
experiences to its potential customers. As a part of the strategies of promoting the new
products of the business, the organisation is also offering free samples of its products to
its target market for receiving the feedback regarding the products from its market base
and enhance the purchase of the targeted audience. The company is also concentrating on
the digital media in order to foster its promotional campaigns and interact with a wide
number of customer base. Various programs are also run by the Costa Coffee which are
considered as loyalty programs like Costa Coffee Clubs that helps in permitting its loyal
market base in receiving discounted products and earning some points on the purchase
which is made by them from any outlet of the company. ShakeUpSummer is one of the
effective promotional campaign that is run by the organisation in order to foster the cold
coffee products of the company. The business is also making use of its logo on the cups
of the products which are offered to the potential customers of the organisation.
 Process: Just like big coffee houses around the global world, the organisation also
following a standard process. Within the each outlet of the Costa Coffee, there is very
nice arrangement of sitting (Guriță, 2019). When the audiences take entry into the outlet
and feel themselves comfortable, then the menu card is presented in front of them by the
manpower within the business. The workforce ensures that the products of the
organisation is treated in a very polite manner and just with a smile that makes the
customers happy and joyous. After taking the order from the customers, human resources
within the business ensures that the products which are asked by them are available in

superior quality and in minimum time. The final procedure within the organisation is to
pay bills for the purchase made by the customers. For receiving the payments from the
target market, the company is using a wide variety of technologies and processes such as
payments from debit / credit cards, cash payments, online payments and many more
(Kish-Doto and Poehlman, 2021). Within some outlets of Costa Coffee, there is a counter
of self-service too.
 People: The company concentrates on its people who are working at global level such as
manpower as well as the potential market share. Costa Coffee is having employee size of
more than 2000 human resources. These human resources within the respective company
are highly skilled as well as trained in order to adhere the superior polite and the
professional behaviour with its market base. Every single outlet of the Costa Coffee treats
its target market with regards along with the overall experiences of the cafe that is mainly
relied on its workforce (Marketing Mix Costa Coffee, 2022). The human resources within
the organisation are also having effective communication skills because they are required
to interact with a large number of the persons. The manpower within Costa Coffee also
deal with their market share in the regional language included with the English which is
their main language for making target base more comfortable as well as friendly. All the
employees at global level of the respective organisation also wears the uniform of
identical colour that is deep black. It facilitates in expressing that how the strategy of the
people of the organisation in its marketing mix has been crucial in achieving the success.
In this way, the Costa Coffee has used different elements of marketing mix within the
business operations of United Kingdom in order to reinforce the positioning of its business
within the last three years.
Strategic decisions and relevant taught theories in the marketing efforts of organisation
Strategic decisions are those decisions whose intention is to give a competitive benefit
and make efforts in order to change the entire scope as well as direction of the company. Such
decisions are crucial for the business organisations because it creates healthy and the sustainable
business environment (Krishnan and et.al, 2022). There are various kinds of factors which are
involved in this such as time, target market and the cost. This also helps in giving a wide variety
of opportunities to the organisation for formulating an action plan and also aligning their goals
with true image of the business. There are different types of choices that are available to a

company in order to select daily operations but the concept of strategic decisions made it slightly
different for it. For instance, the administrators of the Costa Coffee are required to assign
different duties and to interact the goals of the organisation with the team members and the
stakeholders. The process of framing strategic decisions consists of several steps which are to be
taken into consideration by the company in overcoming the problems that occur within the
business. Dor developing the process of strategic decision-making, the management of Costa
Coffee are necessarily required to consider different steps which are given as follows:
 Defining problems: This is initial step in which managers of Costa Coffee identify
problems that occurred in organisation which is significant (Kumar, 2018). The company
is facing those issues that are associated with declining of sales of organisation.
 Accumulating information: It is the next step and at this step, the manager of the
company concentrates on the collection of information regarding the problems that are
identified above. Information can be collected through interacting different stakeholders
such as employees, shareholders, suppliers, customers as well as other people of Costa
Coffee. It can also be collected through conducting research and development.
 Developing and evaluating alternatives: Administration of Costa Coffee can build
various alternatives in order to solve the problems that occur in business. They can take
suggestions from customers, workforce, etc. It facilitates in gaining new thoughts which
are significant for organisation. After developing options, managers of company are
required to evaluate those options in order to choose the best one suiting their
requirements.
 Selecting best operation and its execution: Costa Coffee is required to adopt the best
operation which is significant for executing the best operation within the organisation
(Madeira, 2019). Managers of company are required to accept all members for executing
strategic decision as they can influence business operations.
 Monitoring: This is the last stage in which superiors of Costa Coffee are needed to
monitor the strategies whether it is effectively working or not within the organisation.
This stage requires addressing of the problems to ensure the success of the business.
Marketing theories:
There are various kinds of marketing theories that helps the business in achieving its
objectives and goals effectively and some of them are discussed as below:

Porter's Generic Strategies gives competitive benefits to the organisation and this
model mainly includes three different strategies and these are cost leadership, differentiation and
focus strategies. Explanation of this kind of marketing theory is described as under in context of
Costa Coffee:
 Cost leadership: This strategy facilitates the company in chasing competitive advantages
and the main aim is to develop competitive edge for business and also help in facing
competitors (Micheaux and Bosio, 2019). This strategy allow Costa Coffee in enhancing
profitability level with a motive of declining business cost which give opportunities to
them for extending number of customers.
 Differentiation: This strategy involves differentiating the products from those of the
competitors by adopting new technologies or making changes in their offers. This also
give opportunities to Costa Coffee in gaining competitive benefits.
 Focus strategy: According to this strategy, the primary focus is on reducing business
cost and differentiating company's products from those of the competitors. Such strategy
can be adopted by superiors of Costa Coffee to chase competitive advantages.
Ansoff Matrix helps in planning and analysing various marketing strategies for
achieving growth. It is considered as an important strategy of the marketing that helps the
organisation in deciding regarding the actions that can be taken on the basis of the scenario of the
market. Below is an explanation of four strategies of this marketing theory in relation to Costa
Coffee:
 Market penetration: In this strategy, existing products are introduced in existing
markets in order to expand customer-base. Company has to adopt new strategies such as
promoting efforts, reducing product price to attract new customers.
 Product development: As per this strategy, new products are introduced in existing
markets and for this, organisational managers should conduct research for expanding
products variety (Mkhize and Ellis, 2019). Such strategy facilitates respective company
in evolving strong understanding of market share and formulating innovative solutions.
 Market development: According to this strategy, company can enter into new markets
with existing products and can enhance their markets in terms of geographic location or
in new segments of market-base. If company has updated technology then it can follow
this strategy for expanding operations in new market.

 Diversification: This strategy allows company to enter into new markets with its new
products and also involve high level of risk because both markets and products are new.
Risk can be reduced by diversifying the products from those of competitors and helps
organisation in enhancing profitability level of business.
Effectiveness of marketing efforts
Marketing efforts are those resources of an organisation which are dedicated by it in
order to promote goods and services. Businesses also make such kinds of efforts to increase
products and service awareness to customers for increasing profits within the firm. Costa Coffee
is making marketing efforts in order to foster products and services (Nosi and et.al, 2021). For
evaluating efforts, respective company follows different ways which are discussed as follows:
 Marketing reach expansion: This method facilitates in ensuring effectiveness of
marketing efforts and is crucial to expand markets. Costa Coffee enhance its business
operations through this method in new region with customers recommendations and
makes successful products.
 Sales performance: This methods helps the company in its growth and success and with
the help of such method, Costa Coffee evaluates marketing efforts effectiveness.
Increased sales helps organisation in enhancing profits and indicates favourable sign of
company's marketing efforts and also helps in achieving business objectives.
Organisation is required to consider that changes in sales take place through variations in
prices.
 Return on Investment: This method enables the marketing efforts to get evaluated by
the company. ROI is considered as one of the most significant aspect for the organisation
so that it can overcome the expenses. Most of the businesses are making efforts in order
to earn the profits which are essentials for the organisation (Nuseir, 2020). In order to do
so, it is very important for Costa Coffee to measure the money invest on various
campaigns of marketing as well as other efforts against the sales operations of company.
This assists them in identifying the returns on the investment of the organisation which is
crucial for a company in order to make an analysis of the profits.
 Customer response: It is considered as the reaction given by the companies to the
activities as well as the queries of the market share. Administrators of Costa Coffee can
take response from the online engagement and customers click rate that permit them in

revealing organisational performance. There are various kinds of methods which can be
used by the company for evaluating the effectiveness of the plan (Swenson and Rhoads,
2019). Efforts which are made online helps in giving opportunities to business in
receiving response from customers. This becomes crucial for the respective organisation
to enhance their business operations as well as effectiveness of marketing efforts.
CONCLUSION
From above explanation of the portfolio, it has been concluded that the concept of
marketing is concerned with the business activities which are adopted by the organisation for
enhancing the customer base of the business. In this portfolio, the tool of marketing mix has been
discussed with its different elements which has included product, price, place, promotion,
process and people. Along with it, several types of strategic decisions have also been taken into
consideration that help the businesses in overcoming the challenges that occurred within the
firm. Moreover, different marketing theories have also been explained in this portfolio that helps
the organisation in gaining competitive advantages over competitors in the market. Furthermore,
the effectiveness of the marketing efforts has also been described within the respective portfolio
that helps the business in achieving the growth as well as the success of the organisation.

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Online:
Costa Coffee Marketing Strategy, 2022[Online] Available
Through:<https://www.mbaskool.com/marketing-mix/services/17119-costa-
coffee.html>
Marketing Mix of Costa Coffee, 2022[Online] Available
Through:<https://howandwhat.net/marketing-mix-costa-coffee/>
Marketing Mix Costa Coffee, 2022[Online] Available
Through:<https://www.marketing91.com/marketing-mix-costa-coffee/>