Analyzing Costa Coffee's UK Marketing Strategies - MOD003507

This report provides a detailed analysis of Costa Coffee's marketing strategies in the UK, focusing on the marketing mix elements employed to reinforce its market positioning over the last three years. It reflects on strategic decisions and relevant marketing theories, evaluating the effectiveness of these marketing efforts. The report covers product, pricing, distribution, and promotion strategies, highlighting how Costa Coffee has adapted its offerings and approaches to maintain its competitive edge. Furthermore, it examines the application of customer decision-making process theory and Porter's Five Forces in shaping the company's marketing decisions. The analysis includes the impact of consumer power, new entrants, supplier power, competitive rivalry, and the threat of substitutes on Costa Coffee's market position and profitability. The report concludes by summarizing the key findings and providing insights into the overall effectiveness of Costa Coffee's marketing strategies in the UK market.

COSTA COFFEE

Table of Contents.
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Marketing mix elements in their UK operations, to reinforce its positioning within the last
three years....................................................................................................................................3
Reflecting on strategic decisions and relevant taught theories in its marketing efforts..............6
Evaluating the effectiveness of its marketing efforts ..................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Principles and practices of marketing is being defined as the ideas of the marketing which
is being used by corporate company in order to sustain in the competitive market. By these
principles and practices being adopted by the company aids in promoting companies products
and various services provided by company in order to offer various products by creating the
brand awareness as this helps the business to stand out of the other companies by adopting
appropriate principle of marketing in business. Costa coffee is the coffee house supply various
coffee options to consumers, as of Italian roasted coffee. The company have various 1176 outlets
in British countries. This project report will provide detail about our marketing mix being
adopted by company for reinforcing its positioning within last three years. Also, reflecting on
strategic decision and theories of marketing. Further, evaluating effectiveness of marketing
efforts.
MAIN BODY
Marketing mix elements in their UK operations, to reinforce its positioning within the last three
years
Marketing mix is being defined as the set of tool which is being used by the company I
order to promote a product in market. These are set of strategies being adopted by business in
order to position its products for sling it in right place and at right quality and quantity to various
consumers.
Products strategy
Product strategy of the company aids in highlighting about the companies vision as it
helps in offering various products to consumers. Products strategy for the company focuses on
targetting large consumer base for offering large consumers with specifying key features and
qualities of products with various designs and specifications. Costa company is offering wider
range of products to consumers. Company is Selling various products including beverages,
snacks, coffee, special drinks, tea, ice blends, and various other supplement are being sold by the
company to various consumers (Ali, Kaur and Khan, 2022.). The company is offering wide
variety with offering outlets which is highly acceptable by the users. The main area of the
company will be focusing on producing the products of coffee. The company is also selling
various products to other business as the vending machines are sold to other businesses and
offices. Costa coffee is believing in various reactions for selling the best coffee for giving wow

moments by consumers. For growing its market share by selling its products with top quality to
consumers. Various new products is being launched by the company as the canned coffee
version is being launched by the company for selling the products to retail chain of outlets. The
company is selling the coffees to consumers by implying various variations in coffee which gives
variations in tastes.
By adopting certain product variation in coffee helped the company for increasing its
sales over the last three years. Further more the costa coffee adopting different modes for serving
and delivering products to consumers has helped in sustaining and retaining its position in
market (Alvarez-Milán and et.al., 2018). The company also encourages opinions by consumer as
the consumers have decided coffee title names as for deciding title name for frsotino, coffee
cream, lemonade and mocha cream. The title of all these product being sold by costa coffee is
decided by consumers.
Pricing strategy
Pricing strategy is being designed for establishing effective prices for products. By
adopting this strategy for pricing of products helps in maximising profits of company and boost
market demand for products and services. The products of the costa coffee is being offered to
large consumers at premium prices. Prices comes at second position for the company, as it is
mainly emphasizing on the quality of products to be sold to all the consumers. Prices of all the
coffee products are generally at higher range because establishing the competitive position. By
setting the premium prices of all the products company commitments is to sell the best coffee
with great quality and taste (Cenamor, 2021). As this pricing strategy is adopted for providing
best of products to all the consumer by valuing consumers. The pricing of the products helps in
establishing perception of the consumers according to the mindset. The main benefits of
establishing premium pricing is that it attracts huge consumers as by establishing the products it
is being highly valued with maintaining quality and taste of product.
Distribution and Placing strategy
Distribution and placing strategics is used by companies for defining target market of
firm, the main goals of this strategy is to provide access to all products and services being
offered by company with specifying and selling on particular location. By adopting this strategy
aids in specifying on Costa coffee is operating into various countries by establishes various
outlets in various countries (Hanaysha, 2020). Companies is mainly designing various outlets by

targetting the upper class also middles class people which are rich individuals. By grasping more
consumers base into various countries the company is modifying its menus according to taste and
preferences of various consumers. Costa coffee has also established its apps where consumers
can select the preferred coffee, also beverages which helps in delivering product directly to
consumer with ensuring convenience. Recently the costa coffee partnered with Deliveroo. Uber
eats and just eats for delivering the products to consumers. The stores of the costa coffee is
established at al the premium place as at airports, malls which helps company in retaining and
positioning brand in the competitive environment (Hanaysha and et.al., 2021). Company has
adopted the distribution strategy for delivering the products by prioritizing comfortable and time-
consuming zone. Also, high profile shopping areas, theatre places and it the busy corporate areas
is chosen by the business for distributing coffees and beverages products to all targetted
consumers in market.
Promotion strategy
Promotion of products into market is very important marketing strategy which must be
followed by company in order to increase sales of products. By using the promotion mix helps in
upraising brand value of companies products and recognizing company which results in
increasing sales of products. For promoting products into market, the company must introduce
new promotional strategy in order to promote products better into market (Lim, 2021). As the
costa coffee should introduce membership card this will helps in attracting consumers by giving
discounts, in this consumers while collecting card points at certain stage are able to receive more
discounts and cash backs. Also, various offers at festival must be given to consumers according
to seasons specials as on Christmas offering buy one get one as coffee with some snacks and
beverages.
Also, by offering free samples of new products to consumers attract to purchase and
review products this will helps in increasing sales of products being offered by costa coffee. For
promoting the products company also run various campaigns and loyalty programs which helps
in attracting customers frequently consumers. Also, the campaign run by shake up summer helps
in promoting and marketing cold coffee products effectively. Furthermore, the most important
promotional strategy used by company is word of mouth strategy as publicly promoting
companies products by speaking to consumers and helps in providing better experience to

consumers (Morgan and et.al., 2019). the company uses logo designs on the cups for serving
coffee to consumes in market.
Reflecting on strategic decisions and relevant taught theories in its marketing efforts
The marketers for making the strategic decisions for the costa coffee uses customers
decision-making process theory. The customer decision-making process theory of marketing
helps costa coffee in marketing their products and promoting products of costa coffee. Marketers
use this theory for understanding the motives of consumers and their purchasing de decisions.
This theory helps in defining about decision-making processes of buyers. It is mainly divided
into five sections as:
Awareness
The customer is identifying the problems which needs to be satisfied by consuming or
purchasing a product from market. The problem recognition is the first step which helps in
determining the target demographic for the company, as for which target market company I
producing goods for satisfying the needs. Decisions for the company mus be based on assessing
the needs of consumers and producing products for satisfying needs in market.
Interest
In this step consumers is searching for the products which helps to fulfil needs and wants.
At this company must formulate strategies by searching out the potential needs , producing
products by using the latest technology and paging of products which attracts consumers . Also,
decisions of costs coffee must be taken for producing quality of coffee and beverages to
consumers which satisfies needs and hunger (Peterson and et.al ., 2021). This helps in marketing
the companies products in better and efficient way by satisfying needs of consumers of target
market.
Consideration
The consumers will select the best alternative of products from the multiple alternative
available which satisfies needs. Consumers will choice of purchasing products by reviewing
prices of each products and selecting the best products which fulfilled needs and wants. Making
choices by considering the quantity available at affordable prices and the quality of products.
also reviewing the review experiences (Raewf, Thabit and Jasim, 2021). For this costa coffee is
offering products at premium prices to consumers and offering with best quality in premium

locations , strategic decisions of company is based on satisfying needs of the rich individuals
with great quality and prices.
Purchase
The buyer make choice by gathering all knowledge of products from the market.
Consumer will make the final decision of purchasing the products by considering all the factors
and logically concluding about taking decision for products being sold by costa coffee (Rialti,
and et.al., 2022). As the positioning of the products done in strongly manner by company which
helps in making better strategic decision for influencing consumers for coffee branches by
purchasing hot and cold products as of snack beverages from market.
Loyalty
When consumers make purchase of products from the company. It must fully satisfy their
needs as this will helps in attracting consumers and making purchases again from the firm when
the consumers are satisfied from the products being served. When products match the
expectations of consumers helps in building loyal buyers for continuously pricing products from
the company this will help in creating brand image by establishing loyal consumer for the costa
coffee and excellent post purchase of products influence consumers for purchasing products in
future by recommending to friends and other persons (Sahu, Padhy and Dhir, 2020) . This helps
in better increasing loyalty for company.
By using the porter five forces analysis for the marketing of products of company in
market . This helps in analysing firms potential consumers, new entrants into market, suppliers,
competitors and substitutes available.
Consumer power
Bargaining power of consumers is low for the company. As this represents the same
prices as that of the luxury coffee makers opt for selling premium coffee and quality products to
consumers in market. Ordinary consumers are less sensitive to opt for premium prices those
consumers who prefer affordable and low costs products can easily shift to other brand for
purchasing coffee product. Thus the bargaining power of the company is low and sensitive
compared to other local coffee shops and brand because the costa is selling products at premium
prices which only rich individuals afford.
New entrants

Strong new entrant into markets, as this industry provide high profit margins. This will
hinder campaniles profits and lowers the revenue generating capacity . But the new entrants dies
not affect company as Costa has established its brand image and this will make difficult for new
entrants to complete the position of company as strongly brand image is being established by the
company selling premium prices products to consumers. So the threat of new entry to costa
coffee is low.
Power of supplier
Bargaining power of suppliers are low, as most of the companies in market are
producing own coffee beans, which is considered as the major ingredient for the company to
produce coffee to large number of targetted consumers. Low level of bargaining power of
suppliers is there in market for prodding raw materials to companies (Costa Coffee Case Study
Solution & Analysis, 2022). Costa company is not affected by the power of suppliers as large
numbers of suppliers are available in market for obtaining raw materials, as if one supplier
provided good at high service company can shift to other supplier for obtaining raw materials for
producing coffee and other complimentary products.
Substitutes available
various alternative are available for the coffee as of tea is the major substitute available
which is thereat for the company. High level of substitutes available to consumer for shifting to
other brand products which are offering at low and affordable prices to consumer. Thus
consumers of costa coffee easily shift towards those companies which are offering coffee at less
prices. Thus formulating strategy of company must consider this point as high thereat of
substitutes is there for company as for consumers shift to other brand for purchasing products.
Competitors
Competitive rivalry for company is at moderate level. Main competitor company are
Starbucks and Nero. Starbucks is attracting large numbers of consumers for purchasing coffee at
premium prices by using unique marketing strategies. Also, Nero is the cheapest coffee and most
delicious being sold at less prices. Furthermore, Nero is offering healthy food products to
consumer with free newspapers. The styles of Starbucks is bing loved by large number of
consumers as providing comfortable and concise store front. This formulating strategies and
taking strategic decisions for the company must review level of competitors which help in
marketing effective products of costa coffee.

Evaluating the effectiveness of its marketing efforts
Marketing efforts are those which is being adopted by company for increasing sales and
growth which results in better performance. Measuring marketing effects helps in recognising
short and long term revenue for company. Mainly KPI is being used by costa coffee for
measuring its implementation of various strategies and marketing efforts being adopted has
generated success or not. Various kpi tool including:
Clicking through rates / Bouncing rates: This helps in measuring the engagement of
consumers as by measuring precent of people who clicked link to saw websites of costa coffee.
This helps in identifying consumers who is purchasing products through websites.
Average sales cycles: This helps in evaluating sales being generated the whole year ,
also in month and every week for the company (Sorokina and et.al., 2022). As by using this aids
in monitoring impact of marketing efforts being done for influencing consumers for purchasing
products at estimated prices.
Consumer loyalty and retain rates: This tool will helps in finding the loyal consumers
for the costa coffee and helps in formulating strategies for retaining those loyal consumers for
maintaining the competitive position in market by the company.
Social media marketing effectiveness : By measuring the social media marketing
effectiveness helps in identifying the efforts and marketing strategies used by company as of,
converting the webpages into more attractive manner. Also, introducing card based systems for
consumers to purchase products from costa coffee. Also, evaluating companies product
marketing as for providing quality of products at premium prices at online as well as on offline
stores (Thabit and Raewf, 2018). The social media marketing efforts acne also be tracked by
reports and shares also comments being generated at website for costa coffee, this will give
effective feedback for the marketing strategy adopted for increasing sales of company.
Evaluating marketing mix strategies adopted by company : By conducting market
research for the strategies adopted by the company. Also taking feedback from the potential and
loyal consumers will helps in analysis and evaluating strategies adopted by the firm ais
establishing competitiveness. As by analysing the companies new products range sales, as the
reduces strategy adopted by the company for encouraging various opinions and designing the
products with the opinion of the customers is working in the market or not. also, for pricing

establishing higher prices for products for selling quality products to premium consumers
market, taking reviews on prices will helps in establishing competitive position for company.
Furthermore, company key strategy is to produce good quality of products at fair prices,
as costa coffee is producing two variants into coffee as small and large the variants being sold at
equally proportional to the quantity produced for the company. As company is holding 29 % of
the total coffee market chain. At this point the company is measuring the behaviour of the
consumers by using consumer decision-making process theory which helps in identifying
satisfaction of consumers being obtained form coffee products sold by company. As the key
strategy used by company is producing quality products at premium prices, for this most
important costa coffee must create value by building its largest network and fulfils consumers
demand and satisfy them by creating new tastes and launching new products into market. As by
adopting the marketing strategy by selling various raw materials as of beans, tea leaves, from
various rainforest farms helps in establishing competitive advantage for company and aids in
achieving long term goals. This helps in improving portability which increasing sales revenue by
fulfilling all the caffeine standards.
CONCLUSION
From the above report it can be concluded that by using four marketing mix into
establishing business and marketing products of costa coffee and helped in increasing sales of
companies products. As by taking strategic decisions of the company and formulating various
products, price place an promotional strategies for selling various products to consumers in
market. By using consumer decisions making theory and porter five forces helps in making
effective strategic decisions for achieving growth and better performance for positioning
company products. Costa coffee uses KPI for evaluating marketing efforts which is being done
by company for raising companies sales and revenues. Furthermore, it also uses retain rates,
average sales cycle tools and bouncing / clicking through rates which helps company in
evaluating marketing efforts.

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Online
Costa Coffee Case Study Solution & Analysis. 2022. [Online]. Available through:
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