Costa Coffee's Marketing Strategies: A Case Study Report

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MARKETING ESSENTIALS
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Table of Contents
Introduction:....................................................................................................................................2
LO1: Functions of marketing and its relationship with other functional segments in a hospitality
organisation......................................................................................................................................2
Coordination and relation with the other departments:...............................................................4
LO2: Comparison of the process that the hospitality organisations use fundamentals of the
marketing mix (7Ps) in order to achieve their overall business objectives.....................................5
Conclusion.......................................................................................................................................8
References........................................................................................................................................9
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Introduction:
Among the organisations that deal in the business of coffee, Costa Coffee is considered as one of
the reputed organisations. The organisation started their business in 1971 in London, although
they have shifted their head quarter in Bedfordshire. Although the organisation have stated their
business as a wholesale company selling types of coffees and other snacks to their potential
customers, recently they have sold their properties and market share and market share to Coca
Cola. It is needed that the organisation should have the ability to increase the market share by
improving their marketing and introducing new services and products into the concerned market.
In this research, the functions of marketing and its relationship with the other segments of the
organisation has been discussed. The study have also focused on the comparison of the process
that most of the hospitality organisations used in order to achieve their marketing and business
objectives by implementing the marketing mix.
LO1: Functions of marketing and its relationship with other functional segments in a
hospitality organisation
Major roles and responsibilities have to be determined by the marketing department of an
organisation and the mentioned organisation in this research, Costa Coffee is not an exception. In
order to increase their market performance and increase the market share as well as the sales
percentage, the organisation has to depend on their marketing plan. The purpose of the company
includes the research over the concerned market, managing the strategic divisions, supporting the
cells factors and develops the product and services. The marketing functions that are included
into the mentioned organisation Costa Coffee, has been described in subsequent list.
Research over the concerned market: Most significant responsibilities of organisation to
conduct a proper and successful market research so that the market trend in the recent time and
the needs and demands of the consumers can be understood (Somanna et al. 2017). Being one of
the multinational coffee companies, Costa Coffee has to conduct a proper market research for
entering into a new market. If the organisation found that the demand of coffee is higher in the
country and the competition rate is lowered as well, it would be easy for them to capture the
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market of that particular country is easily. At the same time, they can have the satisfaction of
mitigating the customer demand by fulfilling their needs.
Efficient marketing strategy: A marketing strategy is essential for all of the organisations in
spite of their sizes. In order to develop the marketing strategy properly, both the experienced and
junior managers of the organisation are needed to co-ordinate with each other and develop a
sufficient team. This team would help the organisation to the process of launching and
developing new products and services and organised new distribution channel for those products,
so that the organisation can capture the market easily (Tucker, 2017). The objective of
developing marketing strategy is to understand the thinking process of the consumer and to
identify their requirements in order to fulfil them and capture the market as well.
Development of products: As Costa Coffee is dealing in the retail coffee sector, they have to
understand the different varieties of coffee and their demands in the different parts of the world.
It is the key focus of the marketing team of Costa Coffee is to concentrate on the consumer
demands. Therefore, the organisation is required to develop a sales team who will be to increase
the budget of the team and the design the promotion of contents for enhancing the consumer
visibility (Kerin and Hartley, 2015). The financial team of the organisation also requires being
included into it, as they are responsible for allocating the funds for this promotion and other
aspects of marketing.
Moreover, the Human Resource Department of the mentioned organisation is required to be of
recruiting and selecting efficient persons that are effective for there are located job roles. For
their sufficient training and development as well as their remuneration, the human resource
Department is also responsible. At the same time, in order to recruit efficient employees for the
marketing development, the Human Resource Department is also liable.
Supporting the sales team: Sales team of Costa Coffee is an inevitable part of their marketing
department. In order to increase the sales process of the company and to increase their market
share in the concerned markets, the sales team is liable (Mojo et al. 2017). On the other hand, it
has been seen that the sales personnel of the organisation are required to provide right training in
order to mitigate their business objectives. Costa Coffee also uses the right process to train their
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employees so that they can identify the demands of the consumers effectively and mitigate them
successfully.
Coordination and relation with the other departments:
It is necessary for every multinational organisation to maintain a healthy and strong relationship
among all the departments. The mentioned organisation Costa Coffee is not an exception. By
analysing the organisation as well as the reports regarding the organisation, it can be stated that
Costa Coffee maintains strong and healthy relationship among the existing departments of the
organisation. In order to develop a full proof and successful marketing plan, relationship of the
organisational departments is necessary to be supportive and coordinated. Efficient function of
the company is dependent on the coordination of the departments and the interrelationship of the
employees that are working under different departments of the organisation (Kotler et al. 2015).
Department of human resource: It is required that the Human Resource Department of the
organisation should be maintained a coordination with the other departments as their recruitment
and retaining a dependent on the HR employees. The Human Resource Department is also
responsible for resolving the issues and problems that can be emerged in the organisation in
various resources. Apart from that, they have to record whether the production target is missing,
an experienced and efficient marketing and production team and conduct market research in
order to find out the current market trend of the concerned market for Costa Coffee (Kerin and
Hartley, 2015)..
The production department: The production department is responsible for the development of
the company and the different aspects. It can be stated that the organisation needs to develop
their production departments for a number of reasons. For analysing the current market trend,
they are responsible (Nair and Bose, 2019).
Apart from that, the production department is also responsible for conducting research so that the
current demands of the customers as well as the future demands can be predicted. A time limit as
well as an action plan should be developed by the organisation in order to achieve competitive
advantage. Planning is also included in the responsibility of the production department. As the
organisation is developing their business in the developing countries of the world and promoting
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the business as well, the huge count of orders are to be managed by the production department at
the same time.
Marketing department: Marketing department of Costa Coffee is responsible of developing the
promotional events and advertisement campaigns. It is their responsibility to develop proper
contents for promotion and advertisement so that it can catch the attention of their potential and
existing buyers (Lee et al. 2015). The marketing team is also responsible for efficient team
development that can be able to fulfill the demands and targets of the customers and the
organisation respectively.
LO2: Comparison of the process that the hospitality organisations use fundamentals of the
marketing mix (7Ps) in order to achieve their overall business objectives
The marketing mix of a company can be used in order to understand the market condition. They
can also be used for identifying the problems that are already existed in the marketing scenario
and resolving them properly. In case of the mentioned organisation Costa Coffee, the marketing
mix of 7Ps has been demonstrated in order to identify objectives of the organisation and finding
the way organisation is dealing with the problems that are existed in their business. Moreover, a
comparison has been conducted in this case so that the marketing scenarios of the organisation
can be compared with Starbucks, which is prime rival of Costa Coffee (Marescotti and Belletti,
2016).
Product: The main product of Costa Coffee is coffee, however they deal with a number of other
varieties of products and all those varieties are preferred by their potential and existing
consumers. Apart from different types of coffee, the organisation also deals with, hot chocolate,
flavours of tea, soft drinks and snacks item as well as supplementary foods. The organisation and
their marketing strategy are strongly dependent on the products and from their business revenue,
it can be stated that the organisation has been able to fulfill the taste bud and love for coffee of
their customer. On the other hand, Starbucks is also dealing with coffee as well as other varieties
of food and drinking options. The organisation serves their customer different types of cakes and
cookies, pastries, soft drinks and other varieties of tea apart from different variations of hot and
cold coffee (Lovelock and Patterson, 2015).
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Price: Costa Coffee believes in premium pricing as their target market are the premium people
who can be able to afford any kind of price for the products that they love. The organisation tries
their customers to provide the best coffee at the price as well as the best supplementary food. The
mission of the organisation is to provide the best value to their existing customers so that they
can be loyal to the company and can pay the price for their beloved products.
Starbucks at the same time also believes in the premium pricing. Presently their pricing strategy
has been changed and they are providing pricing to the customers in the developing countries in
order to increase their market in those countries (Kotler, et al. 2018). However, in the developed
countries as well they believe that the consumers can pay the price of the value worthy product
and therefore, they implement the premium pricing on them.
Place: As Costa Coffee has been developed their organisation from London, they have a large
database of customers in the country. Thus, they have established more than 1000 stores in all
over the UK. All the steps of the company have been found in the premium places such as
airport, shopping malls and prime area of the city. The developing countries like India have seen
their limited number of footsteps (De Mooij, 2018).
On the other hand, Starbucks have more number of stores in all over the world in comparison
with Costa Coffee. More than 24000 stores of the organisation have been established until 2017
as it has been reported by the spokesperson of the organisation. Moreover, they has been the first
and foremost organisation to introduce premium self serve beverage their consumers. A number
of smartphone applications have been developed by the organisation to connect with their
consumers.
Promotional strategy: By analysing, the promotional strategy of Costa Coffee it can be stated
that, the organisation is essentially believes on the quality of their products and the word of
mouth promotion technology instead of using the modern day Technologies like a social media
and audiovisual media.
On the contrary, Starbucks believe in communicate their stakeholders and therefore they have
used the number of promotional strategies (Kerin and Hartley, 2015). Not only the social media
but also the print and audiovisual media has been used by the organisation to promote their
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contents and products as well as to connect with their buyers. Corporate social responsibility has
also been used by the organisation as a tool of their promotion and they have announced to raise
more amount of money for orphan infants.
People: A large number of workforces have been included in the system of Corporate in the
organisation mentioned in the study, Costa Coffee. In order to conduct their business in the
different countries of the world, not only the local employees but also the expatriate employees
has been hired by the organisation for their betterment of operation. In fact, the organisation is
considered as one of the largest employers in their native country, the UK.
On the contrary, although a higher number of people are employed in Starbucks, they are not a
huge source of employment for the people of the country where they have their stores. Rather,
organisation focused on their current consumers in order to get the adequate return of their
investment (De Mooij, 2018). However, Starbucks have also spent huge amount of money in
order to train and develop their employees.
Process: Like every other multinational organisation, mention the organisation Costa Coffee also
follows a specific process for conducting their business in the international level. The
distribution channel has been assessed by the organisation according to the workforce as well as
the demand of the products in the specific market. Consumer centric Focal Point has been
considered as another process that the organisation follows.
On the other hand, Starbucks try to maintain efficiency in all the services that they provide to
their customers. The customer care service of the organisation can be taken as an example as it is
one of the fastest customer services among the coffee centric market of the world.
Physical evidence: The physical evidence of the organisation can be taken from their stores that
they have in the premium areas of the city. In order to decorate their stores according to the latest
trends of market, the Costa Coffee authority hire efficient professionals of interior designing.
However, the organisation is trying to develop specific cultures in the interior and designing of
the store (Chaffey and Ellis-Chadwick, 2019).
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On the contrary, Starbucks emphasizes on keeping the local touch in their interior as well as the
design of the shops. The new approach of designs is able to make their customers feel afresh and
interested towards their products and services.
Conclusion
In order to conclude the study it can be stated that the organisation that has been mentioned in
the study, Costa Coffee is required to take efficient measures in order to achieve competitive
advantage. As the organisation is trying to keep the premium pricing strategy as one of the
effective policies for keeping their distinct specifications of business, the other competitor
Starbucks is eliminating their premium pricing policy for the premiums and having the
competitive advantage. In addition to this, the organisation must ensure that they keep some local
touch in their business by recruiting the local people as well as designing their stores according
to the local tastes. On the other hand, the organisation needs to enhance the product diversity in
order to attract the new consumers. For promoting the products and the services of the
organisation they should not only depend on the word of mouth policy but also the premium
factors like the social media as well as the print and television media should be used by the
organisation.
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References
Chaffey, D. and Ellis-Chadwick, F., 2019. Digital marketing. Pearson UK.
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
Kerin, R. and Hartley, S., 2015. Marketing: the core. McGraw-Hill.
Kotler, P., Burton, S., Deans, K., Brown, L. and Armstrong, G., 2015. Marketing. Pearson
Higher Education AU.
Kotler, P., Keller, K.L., Ang, S.H., Tan, C.T. and Leong, S.M., 2018. Marketing management:
an Asian perspective. Pearson.
Lee, K.H., Bonn, M.A. and Cho, M., 2015. Consumer motives for purchasing organic coffee:
The moderating effects of ethical concern and price sensitivity. International Journal of
Contemporary Hospitality Management, 27(6), pp.1157-1180.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Marescotti, A. and Belletti, G., 2016. Differentiation strategies in coffee global value chains
through reference to territorial origin in Latin American countries. Culture & History Digital
Journal, 5(1), p.007.
Mojo, D., Fischer, C. and Degefa, T., 2017. The determinants and economic impacts of
membership in coffee farmer cooperatives: recent evidence from rural Ethiopia. Journal of Rural
Studies, 50, pp.84-94.
Nair, D. and Bose, M.S., 2019. ROLE OF SENSORY ELEMENTS IN ADVERTISEMENTS
FOR BRANDED HOT BEVERAGES (TEA/COFFEE). Indian Journal of Applied
Research, 9(6).
Somanna, K.A., Ravi, A. and Kumar, M.S., 2017. An Empirical Investigation in Identifying the
Potential of Digital Marketing Strategies in Promoting Coffee Products with special significance
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towards South Indian Markets. Asian Journal of Research in Social Sciences and
Humanities, 7(1), pp.1077-1088.
Tucker, C.M., 2017. Coffee culture: Local experiences, global connections. Routledge.
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