Comprehensive Marketing Report: Luckin Coffee in Jordan's Market

This report presents a marketing plan for Luckin Coffee's expansion into the Jordanian market. It begins with an executive summary highlighting the importance of marketing plans for business success, particularly in the context of Jordan's evolving political and economic landscape. The report conducts a situational analysis, examining political, economic, social, technological, legal, and environmental factors, as well as consumer behavior. It then delves into the competitive environment using Porter's Five Forces. The report identifies the target market through segmentation, focusing on geographic, demographic, and psychographic variables. The marketing mix strategy, including product, price, place, and promotion, is discussed, with recommendations for adapting to the Jordanian market. Finally, the report covers implementation, control, and budget/sales projections, concluding with a summary of key findings and recommendations for Luckin Coffee's successful entry into Jordan. The report emphasizes the importance of technology, competitive pricing, and cultural sensitivity in its marketing approach.

MARKETING
& MANAGEMENT

1
Executive Summary
Marketing plans for any company has a very essential role in the success of business. This
report analyses the marketing environment of Jordan. The political and economic
environment in Jordan has not been positive but in the last few years, the situation has
become better. The competition in the coffee industry is high and the consumer behaviour of
Jordan suggests that people likes to spend money on different products. Company aims to
target the growing population of youngsters in Jordan. The industry condition is highly
competitive hence the threats are on higher side. This report suggests that prices needs to be
on the lower side and there must use of technologies in promotions.
Contents

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INTRODUCTION.................................................................................................................................2
Situational Analysis...............................................................................................................................2
Target Market/Segmentation.................................................................................................................4
Marketing mix strategy..........................................................................................................................5
Implementation and control...................................................................................................................6
Budget/Sales projections.......................................................................................................................7
Conclusion.............................................................................................................................................8
REFERENCES......................................................................................................................................9

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INTRODUCTION
Several advancements in the technology and the changing global business environment have
facilitated the companies to cross borders for operations. Companies that are doing well in
any particular nation are planning to expand their business in other parts of the world. This
expansion is planned through both online and offline mode of business. In such expansions
the role of marketing becomes very much crucial (Cnbc, 2019). Marketing plans for any
company must be designed as per the marketing situation in the country and the behaviour of
the consumers in that nation. Companies must target their customers based on the
segmentation that is done on the basis of different variables. Placing all the elements of
marketing mix at appropriate position can help company in making the expansion successful.
It is also crucial to properly implement the marketing plan at the same time enforce the
controls that helps in achieving success. For this proper budget allocation and sales
projections is very much necessary. This report highlights the marketing plan of Luckin
Coffee from China as it aims to enter into Jordan Market, which will help them in achieving
their objectives appropriately.
Situational Analysis
Before entering into Jordan market, it is crucial for the company to analyse the situation
present in that country. This is very much necessary for developing an effective marketing
plan. There are various factors which needs to be critically analysed for make their entry into
the Jordan market successful. Some of the factors that need to be focused are:
 Political: The government policies are also supporting any kind of investments made
in the country. The stability of the political environment is still under concern. They
have made a strong political relation with all the Asian and European countries and so
are with China. This bi-lateral relationship with China will help Luckin Coffee in
expanding their business in Jordan market. Since this country is still under the
kingship hence the political reforms have been slow which will have effect on the
growth of Luckin. With the increasing in stability in the political condition of Middle-
East region, it is getting difficult for the companies to expand their business in this
area.
 Economic: This country is highly affected by the global economic crisis. In spite of
the fact that this nation has a financial background and high per capita income still
there is weak business climate. This is having an effect on the GDP growth rate and

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hence the progress of the Jordan’s economy has been under question mark. This
company lack in terms of huge amount of natural resources and infrastructure. Due to
political tension in surrounding countries, there is large flow of refugees, which acts
as a burden on the country’s economic growth. This country has recovered from Euro
crisis and in the last few years, this country has improved its strong business
environment where the FDI inflow is high.
 Social: There is increase in the number of young people in the country and the
domestic demands of the people are also on the higher side. As compared to other
middle-east countries, they have a lower labour cost. There is increasing
unemployment in the market hence Luckin will not face challenges in availing low
cost labourers. This will have positive impact on the business operations of the firm.
Apart from this, increasing amount of young people will act as a major target segment
for the company. People of Jordan are highly attached with their cultural background
and local culture should be present in the business model along with the Chinese
culture.
 Technological: In terms of technological advancements, this country lags behind
many of its competitors. This country requires huge amount of capital investment in
terms of technology so as to ensure that optimum utilisation of resources is possible.
Technical training is a must requirement of the people in this country. For fast
expansion and better customer experience this is necessary.
 Legal: There is not much legal restriction in the country when it comes to company
coming to this country. The laws related to human resource and investments are not
so strong hence they can easily expand their business in the market.
 Environmental: Jordan does not have many natural resources. The environment
related concerns have also peaked in the last few years only hence the government has
become strict over the waste management. Company need to use all the best practices
from China so as to ensure environment sustainability while ensuring their growth.
 Consumer behaviour: Jordan people are traditionally price-sensitive but due to
increase in the income in the last few years, the spending power of the people has
increased. Jordan people on an average spend more than their income. Around 60% of
the total population are youngsters who like technological innovations and hence
Luckin will have to use more technology in their business operations. Most of the
Jordanian buyers understand a real and effective after-sales service as an essential part

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of selling products. Brand name does not matter a lot to the buyers in the country
(Wonder’s Travel & Tourism, 2019).
For understanding the industry environment, use of Porter’s five forces can be beneficial.
 Bargaining power of consumers: There are different kinds of options available with
the consumers in Jordan market. This is increasing the bargaining power of the
customers in the market. There are companies that are providing services at lower cost
which is directly benefitting consumers.
 Bargaining power of suppliers: There are large numbers of suppliers available in the
Jordan market. Apart from this, company has ties with international partners which
will help them in availing high quality coffee beans (Fang, 2018). This increased
competition among the suppliers has reduced their bargaining power.
 Competition: The competitive rivalry in the industry is high. With the bigger
competitors like Starbucks, which has a control over the larger part of the market, this
threat is on the higher side. There are many local brands and restaurants that offer
coffee at reasonable rates (Zeitun and Tian, 2014). This is making the competition
much intense.
 Threat of new entrants: Since the investment that is required in setting up the coffee
shop is not so high hence many investors like Luckin is trying to invest in this
business. The change in the business environment has made it easier for the
companies to invest in the country (Li and Jourdan, 2018). This has made the threat of
new entrants to be on the higher side.
 Threat of substitutes: There are large numbers of substitute products available in the
market. Tea and other types of hot drinks are replacing coffee business. Al-Qahwa is a
Jordanian coffee which is highly liked by the people. There is one Turkish coffee that
is also highly popular in the country (Al Muala and Al Qurneh, 2012). People are also
not opting for high priced coffee products. This has put the threat of substitutes to be
on the higher side.
Target Market/Segmentation
It is highly important for any company to have complete knowledge about the target market
they want to aim with their products. Segmentation is done on the basis of different variables
and the selection of most appropriate variables is very much essential (Pride and Ferrell,

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2016). This segmentation is done in any organisation on the basis of the product’s feature and
the problem they aim to counter with this product. Segmentation and targeting for Luckin is
provided below in the table:
Types of Segmentation Segmentation Criteria Luckin target segment
Geographic Region Oman
Density Urban
Demographic Age 16-50
Gender Male and female
Life-cycle Stage Married couples as well as
young bachelors
Income Middle, High and Low
Occupation Students, employees, owners
of business
Behavioural Benefits sought Cost efficient people
Degree of loyalty Switchers
User Status Regular and potential coffee
drinkers
Personality Easygoing and careless
Psychographic Lifestyle Luxury class people,
Strugglers and Mainstreamer
individuals.
Social Class Higher and middle class
people.
Marketing mix strategy
For making marketing effective, it is essential for any organisation to develop a marketing
mix that suits the features of the product. It should also be based on the consumer behaviour
in that market. Market mix consists of four major elements. They are as:
 Product: Luckin coffee has many types of products in their coffee stores. They
provide different taste in their coffee. In Oman they will have to add some more local
Arabian flavours so as to ensure that maximum possible customers are attracted

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towards the business. They arrange the best coffee beans from different parts of world
and hence provide high quality products to their customers.
 Price: Company is providing best of products at lowest of prices. They are providing
discounts that sometimes lead to losses. This is done by the company to increase their
attractiveness. This kind of pricing will be helpful for Luckin while expanding into
Jordan because of the present business environment in Jordan. At the initial stage of
expansion they need to put the prices at lowest of levels (Alrubaiee and Al-Nazer,
2010).
 Place: This Company can open their small coffee shops in different cities of Jordan.
For creating an impact in the market, it would be beneficial for the firm to open their
shops all at once. Their stores provide an excellent environment for all their
customers. They have designed their stores in such a manner that services can be
provided to their customers appropriately. They can use big malls and famous places
in Jordan so as to increase their visibility (Aburoub, Hersh and Aladwan, 2011).
 Promotions: While entering into the new market, promotion plays a very critical role.
Luckin will have to design their promotions in such a manner that they will be able to
reach to maximum possible customers. Promotions must be done with the help of
technical mediums. This is because digital promotions cost less and are able to attract
larger set of customers towards it. Promotional campaign must also include the
regional cultural aspects so that they can improve their brand name in the market
(Akroush, et al. 2013). They should continue with their discount strategy as it can
help the firm in managing the business operations.
Implementation and control
In any marketing process, the role of implementation and control becomes very much
important. The way in which marketing process will be implemented and the way in which
various factors of marketing plan is controlled plays an essential role in its success (Abbad,
Abbad and Saleh, 2011). The implementation of the plans must be done in three stages. First
the research must be done by the company about the ways in which companies will enter into
the market. In this stage, leaders will motivate employees and communicate with them so as
to ensure that each and every thing in marketing goes well. Second are the actual investments
that should be done for making the marketing plan successful. In this, the investors must be
taken into confidence before making any financial investments. Third stage is calculating the

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maturity of the marketing plan. Most of the marketing plan fails because at the initial stage of
the marketing process only, the success is declared. It is essential that initial success must not
be considered as a parameter to evaluate the success. All the five years annual performance
should be criteria for evaluating the performance of the organisation in Jordan.
Apart from this, Luckin marketing team must bring the control measures that will help in
evaluating the success of the marketing process. Marketing variables such as ROI, revenue,
profits etc. must be considered as a parameter to evaluate the success. There must be
controlling authority in any marketing process and it must include people that from different
units of the organisation (Masoud, 2013). Luckin can also take use of performance
measurement system. This will help in calculating the performance of the people in the
country.
Budget/Sales projections
Luckin Coffee
Profit & Loss Statement
Amount
($)
2019 2020 2021 2022 2023
Sales
$2,00,00
0
$3,00,00
0
$4,95,00
0
$6,10,00
0 $8,45,000
Miscellaneous income $0 $15,000 $25,000 $35,000 $45,000
A. Total
$2,00,00
0
$3,15,00
0
$5,20,00
0
$6,45,00
0 $8,90,000
B. Cost of Sales
$1,10,00
0
$1,65,00
0
$3,21,75
0
$3,96,50
0 $5,49,250
C. Gross Profit (A-B) $90,000
$1,50,00
0
$1,98,25
0
$2,48,50
0 $3,40,750
D. Operating Expenses
Salary $84,000 $92,400
$1,01,64
0
$1,11,80
4 $1,22,984
Rent $8,000 $9,200 $10,580 $12,167 $13,992

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Utilities $7,000 $8,050 $9,258 $10,646 $12,243
Insurance $150 $175 $201 $231 $266
Depreciation $8,000 $8,700 $9,744 $10,913 $12,223
Marketing $8,000 $8,960 $10,035 $11,239 $12,588
Maintenance & Repairs $1,500 $1,875 $2,045 $2,250 $2,474
Other $0 $500 $540 $675 $844
Total
$1,16,65
0
$1,29,86
0
$1,44,04
3
$1,59,92
6 $1,77,615
Operating profit -$26,650 $20,140 $54,207 $88,574 $1,63,135
Less: Interest $10,500 $12,500 $11,000 $11,500 $12,000
Profit before tax -$37,150 $7,640 $43,207 $77,074 $1,51,135
Less: Tax @ 25% -$9,288 $1,910 $10,802 $19,269 $37,784
Net Profit AT -$27,863 $5,730 $32,405 $57,806 $1,13,351
Conclusion
From the above based report, it can be concluded Luckin is one of the biggest competitors of
Starbucks in China. This company aims to expand its business in Jordan. The consumer
behaviour of Jordan suggests that it is a market where people love to spend more and they
have no particular high loyalty towards any brand name. The external environment of the
country is supportive and it is attracting large amount of FDI from different countries. The
internal environment of the industry suggests that there are more investors planning to come
in the coffee industry of Jordan which will add to the over competition in the industry. The
prices of the products need to kept on lower side and for promotions digital mediums can be
very much effective.

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REFERENCES
Abbad, M., Abbad, R. and Saleh, M., 2011. Limitations of e-commerce in developing
countries: Jordan case. Education, Business and Society: Contemporary Middle Eastern
Issues, 4(4), pp.280-291.
Aburoub, A.S., Hersh, A.M. and Aladwan, K., 2011. Relationship between internal marketing
and service quality with customers' satisfaction. International Journal of Marketing
Studies, 3(2), p.107.
Akroush, M.N., Abu-ElSamen, A.A., Samawi, G.A. and Odetallah, A.L., 2013. Internal
marketing and service quality in restaurants. Marketing Intelligence & Planning, 31(4),
pp.304-336.
Al Muala, A. and Al Qurneh, M., 2012. Assessing the relationship between marketing mix
and loyalty through tourists satisfaction in Jordan curative tourism. American Academic &
Scholarly Research Journal, 4(2), p.1.
Alrubaiee, L. and Al-Nazer, N., 2010. Investigate the impact of relationship marketing
orientation on customer loyalty: The customer's perspective. International Journal of
Marketing Studies, 2(1), p.155.
Cnbc, 2019. Coffee start-up Luckin plans to overtake Starbucks in China this year. [Online]
Available at: https://www.cnbc.com/2019/01/03/coffee-startup-luckin-plans-to-overtake-
starbucks-in-china-this-year.html. [Accessed on 21st February 2019]
Fang, T. 2018. How Luckin Coffee is reforming China’s coffee culture. [Online] Available
at: https://technode.com/2018/07/30/how-luckin-coffee-is-reforming-chinas-coffee-culture/.
[Accessed on 21st February 2019]
Li, P. and Jourdan, A. 2018. China’s caffeine war: Fast-growing Luckin brews up a threat to
Starbucks. [Online] Available at: https://www.reuters.com/article/us-china-coffee-focus-
idUSKBN1KE1C2. [Accessed on 21st February 2019]
Masoud, E.Y., 2013. The effect of perceived risk on online shopping in Jordan. European
Journal of Business and Management, 5(6), pp.76-87.

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Pride, W.M. and Ferrell, O.C., 2016. Foundations of marketing. Cengage Learning.
Wonder’s Travel & Tourism, 2019. Coffee in Jordan – Art and Culture. [Online] Available
at: https://wonderstourism.com/blog/coffee-in-jordan-art-and-culture/. [Accessed on 21st
February 2019]
Zeitun, R. and Tian, G.G., 2014. Capital structure and corporate performance: evidence from
Jordan. Australasian Accounting Business & Finance Journal, Forthcoming.