Danes Coffee: Analyzing Market Selection and Entry Strategies

This project provides a strategic analysis for Danes Coffee's market entry, recommending Beijing as the optimal location due to its tourism and strong consumer market. The entry strategy should leverage a franchise model. The project outlines a competitive strategy focusing on quality, experience, and price differentiation, with specific pricing and promotional tactics like low prices and website promotions. Distribution strategies include direct selling and online platforms, with a recommendation to emphasize social media marketing and excellent customer service. The conclusion reinforces Beijing's potential and the importance of a comprehensive strategy including competitive advantages, pricing, promotion, and distribution channels.

Danes coffee

Market selection and entry strategy
The best market selection for Danes coffee would
be Beijing. Danes coffee should select Beijing
because of the following reasons:
 Tourism is an important part of Beijing as it is the
capital of china and it is rich for heritages. In
2017 it received around 3.93 million tourist
attractions
 The consumer market is strong In Beijing, the
power of purchasing is high.
 The entry strategy best for Danes coffee would
be franchise strategy.

Composition of Per Capita Expenditure of
Urban Households (%) 2017
Food, tobacco and liquor 19.8
Clothing 6.0
Household articles & services 6.5
Health care & medical services 7.7
Transportation & communications 13.4
Recreation, cultural & education 10.7
Source: Beijing Statistical Yearbook
2018

Competitive strategy
 Quality differentiation: Danes coffee should use unique
and different sources of products so that it does not
compete with the other coffee shops of china.
 Experience differentiation : Danes coffee should focus
on providing entertainment to the customers, by
providing good atmosphere, entertainment and theme
to the shop.
 Price differentiation: It is always seen that the lower
the price of basic coffee up the larger market it can
attract. Once the customers are attracted to the low
price of the coffees they won’t be able to distant from
the shop(Atwal & Williams, 2017).

Pricing strategy
 Pricing is one of the most important factors when a new
shop is opening is the market.
 Danes coffee should study demand of the consumers it
is going to target; income of the consumers of the
target market and lastly it should also study the prices
of the competitors. (Hultén, Broweus & Van Dijk, 2009).
 Danes coffee should study the above three factors
deeply in order to set the prices for the drinks (Kotler,
2011). Danes coffee should price its coffee and other
drinks at a less price in order to keep the customers
loyal to brand and it order to keep a competitive
advantage in the market (Fang, Chiu & Wang, 2011).

Promotion strategy:
 Unlimited coffee and refills
Customers easily get attracted to deals like refills and unlimited,
during the initial launch of the company; it can provide customers
with such deals in order to attract their attention to the brand, if
they try the drink once it won’t be difficult to convince them to
stay longer. (Hawkins, Mothersbaugh, D. L & Best, 2010).
 Website announcements and promos
This is one of the best ways to promote as nowadays all the
customers or people are more connected on social media and
hence Danes coffee should focus on social media and email
marketing. Danes coffee can easily attract customers by posting
about their new drinks and deals and this can help the customers
to know about the deals and product offerings from the
smartphone

Distribution strategy
 Direct selling: This includes manufacturer directly to the
consumer, under this the manufacturer makes the goods
and then sells them directly to the consumers (Goi,
2009). This type of distribution channel does not include
any mediator such as retailer, wholesaler or any agent.
The goods are directly sold from the manufacturer to the
customer or the user without the use of any
middlemen(Luan & Sudhir, 2010).
 Online: this is the new way of distribution channel that
Danes coffee can use. This distribution channel has
reduced the use of traditional distribution. This has
removed use of any middle men. This includes selling
the products online in the case of Danes coffee; it can
use food delivery apps as the second option for the
channel of distribution

Recommendation
 It should focus more on social media marketing as people nowadays are
more connected on social media and it is easier for them to look for all
the offers and new products of the company(Hoffman & Fodor, 2010).
 Danes should provide good customer service experience to the
customers as nowadays customers are more focused on the way they
are treated before after they buy the product and services(Block &
Block, 2014).
 Danes coffee should become a global company by investing and
participating in the local events such as helping the children in
education, helping in community activities as this will help in building
public relations with the international markets. (Ho & Dempsey, 2010).
 Customers can easily hop on to substitute it is important to know the
needs and wants of the products in order to keep the customers loyal to
the brand. Providing the services and products according to the needs
of the customers helps the company to gain competitive advantage
over the other brands.

Conclusion
 Through this it is concluded that Danes should chose
Beijing as the market for it expansion as Beijing is a tourist
attracting market and it has high purchasing power.
 Danes coffee should follow 3 competitive strategies which
are quality differentiation, experience differentiation and
pricing differentiation, for its pricing strategy.
 Danes should follow low pricing as it is a competitive
market and it needs to gain advantage in the market and
for the promotional strategy
 Danes coffee should use Website announcements and
promos and coffee refills strategy.
 Apart from this Danes coffee should use two ways of
distribution strategies which are online and direct selling.

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