Costa Coffee: Marketing Mix, Strategic Decisions and Theories Used

This report examines Costa Coffee's marketing mix strategies implemented over the past three years to reposition the company in a competitive market. It analyzes the seven Ps of the marketing mix—Product, Price, Place, Promotion, People, Process, and Physical Evidence—detailing changes made to improve company performance. The report further explores strategic decisions, applying relevant marketing theories to enhance the entity's market results. It also evaluates how Costa Coffee assesses its strategic progress and marketing efforts, focusing on areas such as product differentiation, pricing strategies, distribution channels, promotional activities, and customer experience improvements. The analysis considers the impact of the COVID-19 pandemic on the company's strategies, including the shift to online ordering and the emphasis on hygiene and customer safety. The report concludes by highlighting the importance of adapting marketing strategies to maintain a strong market position.

PRINCIPLES AND
PRACTICES OF
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................3
MARKETING MIX ELEMENTS OF COSTA COFFEE...............................................................3
SEVEN Ps OF MARKETING MIX-...........................................................................................3
STRATEGIC DECISIONS AND RELEVANT TAUGHT THEORIES........................................7
EVALUATION OF MARKETING EFFORTS............................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Principles of marketing refers to the set of dogma which aids the entity in executing their
marketing plans in order to accomplish the decided goals of the entity (Asseraf, Gnizy and
Shoham, 2020.) The report will be discussing marketing mix strategy of Costa coffee in last
three years which implemented to reposition the entity in the market. It will include all seven Ps
and respectively what changes are made to get upward performance of the company. The report
will further reflect strategic decisions and relevant taught theories in its marketing efforts to
enhance the results of entity in the market. At the end of the report how the company evaluate its
strategy progress would also be examined along with evaluation of its marketing efforts.
MARKETING MIX ELEMENTS OF COSTA COFFEE
Costa coffee is one of the biggest coffee house chain of coffee in UK and also operating
its business in around 28 countries with 442 stores (O’neill,2018.) Despite having experience of
more than fifty years in the market it is facing great competition so for coping it up the entity
brought couple of changes in its marketing mix policy to reinforce its positioning within last
three years. The marketing mix of the entity is as follows-
SEVEN Ps OF MARKETING MIX-
Elements of
marketing mix
Product Costa coffee is one of the most famous coffee house chain having its outlets
globally. The products consist coffee, beverages and snacks as key products.
For avoiding the severe competition in the market it has introduced various
flavours to get the customers attracted. Most lavish offering of the company
are- Flat white, Americano, Latte, Cappuccino, Mocha, Extresso. Coffee
cream, Mocha cream Frostino, Lemonade etc. (Kumar,2019.)
For the purpose of repositioning itself in the market it is offering both cold
and hot coffee widen the constellation of offerings. The products are main
driving force of its strategy since there are other companies as well who are
giving it a very tough competition as so Starbucks, Tea garden, Wenheyou

and Lite Bite Foods etc. to counter these brands the product differentiation is
one of the most powerful weapon to face off it. In UK where coffee chains
are not known due to their offering but the way they can bring aristocracy to
their customers it makes them famous and hike their customer retention and
customers satisfaction. It is helping Costa coffee in getting its top position
back.
Pricing Over the time with growing market of beverage in the country the price
competition became favourite choice for the entities. Costa coffee is also
having Below is the pricing strategy as its marketing strategy.
The company is having a diverse price offering in its marketing mix, though
it is influenced by competition and in last three years for elimination it is
working with the slightest premium. Due to high quality and brand value its
products are priced at premium range. It also implemented the policy of
giving priority to the quality not price (Weerawardena,2018.) Since the
waste majority visiting its stores are quality seeker not price. If it delivers
products of good quality then can have a good market share. The price is also
directly proportional to the quantity ordered. Costa coffee also sells its coffee
vending machine under brand Costa express.
The price of coffee also varies according to the supplement added to coffee
like extra chocolate, cream etc. It attracts more customers and also gives
them the facility to get the product of their wish along with customized
changes. It helped the company in repositioning itself specially after
pandemics. The pandemic impacted the sales as stores were shutdown, but
were later opened for takeaways. It offered range of services in order to keep
the price stable for generating profit.
Place As it is said the company is operating worldwide but having strong position
at home. For making the position stronger in last couple of years it has
brought frequent and drastic changes with this regard. It is being operated in
more than 2,100 UK restaurants (Ondang,2018.) It has expanded self
presence in the local market. Earlier was having fewer stores in the nation

and was also shifting its attention to world market but the severe failure of
global supply chain in COVID-19 forced it in being more ethnocentric in
approach.
In the wake of the pandemic the company has started offering online order
placing mechanism as well. So people can place their orders being anywhere
and will also get delivery via a delivery partner in that region. For this
purpose having a strong bond with the delivery partners and other facilitators
so can provide the product on time without any quality compromise. After
the pandemic people are more likely to place their orders online rather
visiting the stores or centre directly. Company found it as a good scope of
escalating its share and notch up better selling in post pandemic recovery
scission.
Promotion It is a premium brand so not much rely on advertisement on TV, Print media
etc. because the majority of its customers are the people of elite group. For
grabbing more customers in last three years it started reinforcing its policy of
word of mouth publicity. Costa coffee is also disseminating the idea that it is
not only selling coffee but experience and deep feeling of aristocracy. It
gives the customers strong feeling to get the services from the same
company. The elite section wants luxury and vintage services irrespective of
the cost they would bear (Kyaw,2020.)
It also provided free samples to get the reviews about product and increased
the purchase intention in last couple of years. For better access to the
customers it enhanced its dependence on digital marketing to promote its
campaigns and connect to its customers. For strengthening its loyal
customers base the company launched frequent customers program and
offered them discount on products and points earning on their regular
visiting. Costa coffee is also using its tag on the cups to make it look
attracting and eyes grabbing.
People For better hold in the market of UK, Costa coffee mainly focuses on
employees and customers after COVID-19 both the elements got affected

brutally and left vicious business issues behind. In last three years the entity
is paying more attention to its employees. For making them more
professional and competent they are given decent training so can also be
grown personally. It is paying attention to make their communication skills
grown so can handle the customers in more attractive way (Komarac,2019.)
For getting the customers close and making intensive relationship with them
in last couple of years it is also developing its humanitarian factors like using
dialects while interacting so can make them feel close. For better experience
it has decided a new black dress code for all the employees so customers can
feel more aristocratic the stores.
Process For repositioning Costa coffee is having a standard process to ensure a well-
defined process of offerings. If customer makes entry it will be given a well-
arranged seat then the menu card will be presented and order will be taken.
This process would give them proper satisfaction and also create service
value of the entity. If the process is not satisfactory then the customer
retention rate and conversion rate both would be adverse. The last stage in
the process element is paying the bill of the services consumed. With this
regard the customer will be given its bill by the waiter and would also get
multiple avenues to pay it like can pay in cash, by card, by any other online
app etc. It provides them ease in payment (Buang, 2018,) In last couple of
years for giving a surge to the sales the company started practising a well-
structured process of service so can avoid time idleness and can fasten the
process of rendering services. Also, started owns self-service centres to ease
the customers in getting services on time. The process is being evaluated on
regular interval so can wipe out the potential trouble making elements in
beginning.
Physical
Evidence
The outlets are physical evidence for the company. For avoiding brutal
competition and making the position stronger it also focused the physical
evidence of the company. It is making the branded cups available on which

the tag mark of the company is printed and the cafe or stores are heavily
decorated to curb the attention of people. After the burning hit of COVID-19
(Ferreira,2018.) people are concerned about sanitization and hygienic
services by such stores.
It is said that everything what your customers see at your stores or shop
impacts their emotions and willingness about your product. Keeping this in
mind Costa coffee is offering a wide range of such things like better
ambience inside the store, cleaned and sanitized sitting arrangement,
availability of aligned services so customer can't feel uncompleted. It will
induce their will of buying. These efforts are taken by the company to make
the position stronger and reposition itself in its local UK market.
STRATEGIC DECISIONS AND RELEVANT TAUGHT THEORIES
Costa coffee which is one of the most famous coffee store chain in UK. Over the time it
has shown great ability to make strong strategy in order to keep its upper position stronger. They
have had a successful few years increasing market share to forty percent and with net profits over
160 million euros within the UK market they even beat Starbucks (Gilbert-Saad, 2021)
As company has already extended its strategic objectives which consists ideas of Unique
flavour, nutrition and well-being, community focus, the planet in mind, people powered etc. the
main reason behind strong performance of the company in the market is its strategy making
practice and then execution on the ground level. Company is having a well-articulated strategic
decision-making mechanism which uses relevant theories in order to make it more inclined to
successfulness.
It is very important to understand the nature of consumer since they are the driving force
when it comes to sales and revenue generation with this regard company keeps using various
models of marketing so can assess them perfectly and then make its plan appropriately. From last
couple of years Starbucks is also presenting a good competition before Costa coffee since

Starbucks is giving more leverage to its consumers in many ways like Starbucks presents its
products as replica of lavish live. The products are presented in unique way to its customers.
That is targetting specially upper and middle class customers in UK (Mason,2021) So for
countering them it was essential for costa coffee to initiate its plan in such way so can grab more
and more customers.
For this purpose costa coffee has introduced various strategical changes and came up
with better marketing policies in attempt to encounter the competition. It has used consumer
decision-making process theory applicable for understanding their way of purchasing.
Consumer decision-making theory-
1) Awareness- Costa coffee found that the customers becomes aware of a problem they need
to get solved they want to satisfy their self. This is basic motive behind their move of
going for purchasing. They focus on their needs or problems and then try to look up the
best alternative with this regard. Costa coffee found itself unable to figure out this key
element. For so long time it was offering the products without any big variation and it
made it believe that the product quality and available taste is going perfect and there is no
such need to improve or change it. But other competitors in the market came up with
their different tastes and penetrated the monolithic market. People must know more about
the company and its products for this purpose it is following both traditional and non-
traditional ways of promotions like using social media channels and online applications
as well. At the same time also using mammoth hoardings and banners so people get come
across of the brand and take it into their cognizance (Miklosik,2019)
2) Interest- The customer starts looking around and researching potential products or
solutions. It is second step in which the customers who want to get served try to point out
the availability of products, so they can make their choice. With this regard costa coffee
introduced multiple varieties of taste in coffee so people can choose out of ample amount
of available products. In UK the coffee market is getting bigger and people are presenting
their different taste preference which is placing challenge before such organization to

meet their demand and here costa coffee took smart move and introduced various tastes
to grab the opportunity.
3) Consideration- At once when customers get the products of their choice then with
reduced alternatives they try to figure out pros and cons of the products, so they can reach
to final conclusion and can place their order. With this regard costa coffee has shown its
great understanding level for making them take decisions it has used smart marketing
policy. Outside the stores all available flavours of coffee are being shown so while
making entry in the stores one introduction of products can be experienced by the
customers. This policy helped costa coffee in helping people making fast decision to
consider the products.
4) Purchase- Armed with absolute knowledge the customers feel ready to make purchasing
decision. For this purpose it is very important to give them ease of apex level. It is seen
that at this stage any disruption of discomfort may mislead the customers. With this
regard the company has introduced its better hospitality facility. Like while entering the
customers are given special treatment and proper attention. For making payment multiple
avenues are given to them by online or offline method they can pay their amount. The
customers who purchase products online are given such options like “Buy Now” so they
get more inclined toward purchasing.
5) Loyalty- Many customers after purchase stage experience the product and assess their
satisfaction. It they are given excellent post purchase experience which is very crucial to
ensure that the customer will make another purchase in the future and even may promote
the products and services of the company. These things have been strongly focused by
costa coffee in its marketing strategy making. That's why company has ensured better
post purchase services to its customers by the stores, so they can feel it better to visit next
time. Company trained its salesman or waiter in such way, so they can make the visitors
comfortable in stores and with the least amount of efforts gets the products of their
choice. Company also pays attention to the feedbacks of customers for this purpose
online portal and other online avenues are also offered so customers can share their

thoughts there. If they want something new, or they are having any problem with
products or the offered services so it can be re corrected on time so can retain the
customers (Shukla,2018.)
So by practising such marketing theories costa coffee is making its decisions and also framing
strong strategy so can ace the objectives of the organization.
EVALUATION OF MARKETING EFFORTS
For evaluation of marketing efforts Costa coffee has been a dynamic in nature, as per
requirement of circumstances it is fabricating its evaluation policies so can get better reflections
and counter the predicaments. For this purpose it is practising various methods which are as
follows-
Timely assessing changes in sales is part of evaluation policy. It is one of the easiest way
of evaluation in which the volume of sales is taken into consideration and the changes are
assessed as per changes made in marketing efforts. Costa coffee is assessing its investments in
marketing practices and in reciprocation the returns it is getting in form of sales, As the official
data of the company are justifying the evaluation. From 2012 to 2019 (Kong,2021.) the revenue
from sales got almost double for the entity along with its high amount of investments in
marketing.
Customer response and reactions are very important with this regard. Company timely
assesses the responses of the customers so can evaluate its marketing policy and as per their
suggestion and augmentative needs further improvements can be carried out. Company is having
its presence on various platforms so after summarization of comments and other forms of
responses by help of data analytics Costa coffee is assessing the responses which is paving the
way for understanding marketing efforts (Saunders,2019.)
One of the most prominent stakeholder which notches up its direct contact with
customers is store operators. On regular intervals company gets their feedbacks as well, which

helps in knowing how in practical business the people are assessing impacts of marketing plans
and as per their view points how some changes can be inculcated so achieve potential level.
So altogether it can be concluded that Costa coffee is using multiple ways at the same
time to assess its success in marketing efforts. As it is already brought into focus that with
changing market trends such entities are using both traditional and dynamic or modern forms of
marketing so with this regard single set of evaluation won't be as much efficient as this
constellation can be for such companies whose marketing policies are prone to the market
dynamics.
CONCLUSION
The report above has discussed marketing position of Costa Coffee which is UK based
Coffee chain runner. In the report seven Ps of the company had been discussed to decipher
various aspects which have capability to impact the practices of the organization. Along with it
strategic decisions made by the company also discussed, to full length with relevant thought
theories which reflected that how the company was making strategic decisions in attempt to
encounter the perils and how by assessment of consumer behaviour theory company formed its
marketing plan so can derive maximum amount of betterment to it. At the end of the report
evaluation techniques used be company were elaborated in which key methods to assess the
marketing efforts of the entity and its implications in the performance were depicted.

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