Strategic Marketing Report: Cafe Nero's Romanian Market Expansion Plan

This report provides a strategic marketing analysis for Cafe Nero's potential expansion into the Romanian coffee market. It begins with an introduction to strategic marketing and its importance, followed by a recommendation to expand into Romania due to its growing economy and increasing demand for coffee, particularly sugar-free options. The report suggests the introduction of Expresso Italian sugar-free coffee and highlights the need for thorough market research. A PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors influencing the market. The report also explores market entry options, including direct exporting, and discusses market segmentation strategies. The overall objective is to increase market share and sales through a well-defined marketing plan. The report emphasizes the importance of adapting to cultural changes, maintaining high-quality standards, and leveraging technology for marketing and customer service. It concludes by highlighting the opportunities and threats associated with market entry, providing a comprehensive overview of the strategic considerations for Cafe Nero's expansion into Romania.

STRATEGIC
MARKETING

EXECUTIVE SUMMARY
Strategic marketing is basically a plan which is created by manager in an organization for
supporting firm in gaining the competitive advantage in new market. Cafe Nero is basically an
international brand which specializes in selling European style coffee to customers. Report
includes the suggestions related to the nation where firm can expand business. The different
market options which an organization can adopt has been highlighted in the report.

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Suggestions for products or service and country........................................................................4
Pestle analysis ............................................................................................................................5
Market entry options...................................................................................................................8
Market segmentation...................................................................................................................9
CONCLUSION..............................................................................................................................11
References........................................................................................................................................2

INTRODUCTION
Strategic marketing can be referred to as a way an organization effectively differentiate
itself from its competitors by capitalizing strengths. It can also be defined as process of planning,
developing and implementing promotional strategies for gaining the competitive advantage. The
main purpose of strategic marketing is to provide high value proposition to customers. In
addition to this, purpose of strategic marketing is to help an enterprise in maximizing an
organizational positive differentiation. Strategic marketing is very much crucial to be performed
by firm sin order to provide an appropriate response to continuous changing market situations
(Adhikari, A. ed., 2018.). Development of effective marketing plan is very much essential for
driving am organization towards success.
Report will include recommendations related to the products which new cafe will be
launching in Romania in context cafe Nero. It is basically a London based coffee house which
serves European style coffee to its customers. Study will have focus on addressing the different
factors which can have different effect of firm business in Romania. The main aim of the report
is to analyse the business environment as well as market situation in Romania.
MAIN BODY.
Cafe Nero is basically a coffee house which offers customers with European style coffee.
It is basically an international brand which has its outlets in many of the countries. Presently, an
organization is planning to expand business in the market. Cafe Nero is provided with suggestion
to expand business in Romania. It is the nation in which cafe Nero company can expand
business, as among different nation in Europe, Romania is the fastest growing economy. In
addition to this, coffee industry in particular sector is growing at very rapid rate. Cafe Nero
company by expanding its business operations in Romania can easily achieve its objectives of
earning high revenue and profit (Kasemsap, 2018. ). Romania is the country which has been
suggested for expanding business as culture in Romania is changing and there has been
significant increase in the demand for sugar free coffee by people in the market.
In context of the cafe Nero will introduce Expresso Italian sugar free coffee. It is the
product which has been suggested to be launched in the market of Romania, as many of the
Romanian people are heath conscious and love to drink black express coffee. Launching of the

Express Italian sugar free will provide business entity an ease in generating the demand for
specific product in Romanian market. The objective of expansion of Romania marker is to
increase market share and also sale of the specific products. It has also been recommended that
manger bin cafe Nero company should conduct depth analysis of the market bin Romania before
expanding business, as it is the technique which will assist them in addressing the risk associated
with launch of the particular product in the market of Romina. Market research strategy will also
assist an organization in addressing those factors which might have significant influence on the
introduction of new product in the market (Chernev, 2018.). Cafe Nero company by expanding
business in Romania can achieve success, the nation has positive economic growth there are lot
of business opportunities awaiting firm especially those organisations which are operating
business in food and beverage sector,
Pestle analysis
It is basically a strategic technique which is generally utilized for analysing the issues
that an enterprise might have to face due to changes in external business environment. In relation
to the Cafe Nero company, manager in an enterprise can applied the pestle analysis techniques
for identifying the external variables in business environment of Romania market which can
have effect on its product launch in specific market. Pestle analysis is the technique which will
provide manager in developing an effective plan for providing an appropriate response to
changes in macro environmental factors in Romania market (Chernev, 2018).
In context of Romania, during the year 2013, here re more that 50 coffee house selling
the speciality coffee across the country. The coffee companies in Romania is earning approx.
18219 million US dollar on yearly basis. During the year 2019 it has been expected that the
growth rate of enterprise in coffee industry in Romina will be 4.4 percent (Kasemsap, 2018 ). It
has been expected that there will approx. 59.3 increase in the volume of coffee segment by the
year 2023.
In relation to Romina, the market volume of roasted coffee is too high that is 1658 US a
million dollar. In relation to Cafe Nero company, an organization has been provided with
suggestion to launch new product that is Expresso Italian sugar free coffee, as it will provide
business entity an ease in attracting the customers in market of Romania. By launching new
product an enterprise will able to easily generate the demand for product.

Different variables which can have effect on the product launch by Cafe Nero company
in market of Romania are :
Political factors: These variables includes trade relationship between the coffee producing
nations as well as regulation related to the industry. It also includes the attitude of political
parties towards coffee industry. Due to the political instability in nation, coffee companies such
as cafe Nero might have to face difficulty in delivering the products or services. Changes in the
regulation related to specific sector has significant influence on the business plans as well as
policies and strategies of cafe Nero or other firm in coffee industry (Adhikari, 2018.). In relation
to Romania, nation has stable political conditions, Cafe Nero company can easily promote the
newly launched product in the market. It is required by marketing manager in Cafe Nero
company to develop promotional plan, considering the regulation implemented by political
parties.
Economic factors: It includes economic condition of nation, inflation, increase or decrease in
tax rate etc. Changes in the economic conditions in the nations has significant influence on the
profitability of companies in coffee industry. This is the external variable which also have great
influence on the purchasing capability of organization. Manager in Cafe company should
conduct cost benefit analysis before implementing the plan of launching new product in the
market of Romania, as it is the strategy which will provide them an ease in making suitable
business decision.
Social factors: this variable includes changes in the culture, trends, demand, taste and preference
of customers. In context of Romania, the culture is changing there has been increase ion the
demand for Express coffee, which is positive for organization. Cafe Nero company will need to
have more concentration on the quality of their newly launched product, as in market of
Romania, customers in the market are more conscious about quality rather then price.
Maintenance of high quality standard of newly launched product that is Expresso Italian sugar
free coffee an organization can easily attract customers. It is the tactics which will also assist
business entity in gaining the loyalty of customers which is very much crucial for maintaining
the long term business sustainability in the Romania market. In context of cafe Nero, an
organization can implement the personalized marketing strategy for promoting the product to be

launched, as it is the strategy which will assist an enterprise in positively influencing people to
buy specific item.,
Technological factors: It includes emergence of technology and utilization of the same by the
other firms in industry. Advancement in the technology has both positive as well a negative
effect on the organizations in coffee sector. In context of Romania, use of the advance
technology by other companies in industry has created the threat of cafe coffee company. In
simple words, utilization of advance technology by other firm in coffee sector has increases the
level of competition in the market because of which Cafe Nero company might have to face issue
in concentrating on core business operations. At the same time, advance technology can provide
cafe Nero companies with an opportunity to improve its customers services. In context of cafe
Nero organization, business entity should implement the advance technology and using the same
can develop the innovative products that can be useful for attracting the more number of
customers in Romania market (Ozuem, Limb and Lancaster, 2018). An enterprise can also utilize
the advance technology such as social media for the purpose of marketing, as it is the tactics
which will help firm in promoting the newly launch products ta large scale. Digital marketing
strategy will help an enterprise in increasing the customer base in the market of Romania.
Cafe Nero company can also use social media for communicating with customers in
Romina, as it will provide enterprise an ease in developing the strong relation with Romania
people. As building the strong relationship people is very much essential for successful launch of
new product.
Legal factors: This variable includes changes in the laws related to the coffee industry. It is the
factor which has significant effect on the business operations of firms operating business in
coffee sector. In relation to Romania, cafe Nero company is required to seek permission as well
as licence from the food commission before establishing business. In additional to this the
different norms that are need to be complied by Cafe Nero company in Romania include
company law, employment law etc. As due to failure in complying with legislation related to the
industry am enterprise might have to face the legal issues that can gave adverse effect on the
performance of cafe Nero organization in the market of Romania (Chomvilailuk and Butcher,
2018).
Environmental factors : It includes the changes in the weather conditions which can have great
effect on the production of coffee. In context of Romania, nation has continental climate which

is good for the production of coffee. Cafe Nero company by expanding the business in Romania
can have access to resources that are required for providing the goods or services to customers.
Cafe company is required to develop strong distribution network in Romania, as it will provide
firm an ease in making the timely delivery of goods or services to customers.
Opportunities :In Context of Romania, the economy of the nation is growing at very fast rate,
Cafe Nero company can easily earn high profit by selling the specific products in the market.
Labour rate as well as costs of raw material is also low in the market of Romina therefore, the
Cafe Nero company by expanding business in Romania can achieve is business objective of
reducing the cost of operation and increasing profit margin. Cafe Nero by expanding business in
Romania can increase its market share.
Threats : Increase in the level of competition is the biggest threat which Cafe nero have to face
in Market of Romania. In addition to this there is also threat of entry of new firm in the market.
Market entry options
The different market entry strategies which can be utilized by cafe Nero for entry into
market of Romania are ;
Direct exporting: It is the strategy in which companies sell their goods or services to customers
belonging to other nation. Few firms appoints distributors or agents for exporting products or
services. According to the direct marketing strategy, an organization is responsible for
performing market research, logistics of shipment etc. The main benefit of direct exporting as
market entry strategy is that it assist companies in avoiding the extra expenses. In addition to
this, direct exporting market option enables business entities to retain control on their sales.
Major drawback of direct exporting is that it requires high capital investment.
Licensing: It is the strategy where particular organization provide other firm with right to utilize
products or services. In context of Cafe Nero, an organization can provide those enterprises with
right to sell products or services which already has wide market share. As it is the market entry
will assist an enterprise in increasing the sale of particular product (Grewal, 2018). Cafe Nero
company can provide other companies in Romania with to promote their new launch goods, as
this tactic will help them in generating brand awareness at large scale.

The biggest benefit of the licensing as marketing strategy is that it assist firm in
minimizing the risk associated with launching innovative product into new market. Major
disadvantages of licensing as market entry option is that it increases the chances of fraud due to
which enterprise might haver to face loss.
Franchising : It is the market strategy which is generally adopted by companies for rapid
expansion of business. Franchising as a market entry are generally implemented by those firms
which has repeatable business model. In context of Cafe Nero company, manager while
selecting the franchising options for entering into the market of Romania need to considered that
the business model of firm is unique. In addition to this, other factor which are need to be kept in
mind by manager in cafe Nero when choosing the franchising option is threat of competition
from franchisee.
The biggest benefit which can be gained by companies by opting for the franchising as
market entry strategy is reduction in risk to the chances of business failure. Increase in the
competitive strength of company is the other biggest advantage of franchising as market entry
strategy (Lockett, 2018). Disadvantages of franchising as a market entry strategy is that it could
increase the costs. It also includes high level of restriction.
Partnering : It includes forming one organization is forming strategic alliance with other firm in
order to enter into new market. Partnering is considered to be as one of an appropriate strategy
which can be utilized by firm when the market and culture is totally different. Advantage of
partnering as market entry strategy is that it enables organisation to share risk. The drawback of
partnering is that here are high chances of conflicts which can have adverse effect of firm in
other market.
Joint venture: It is a type of partnership where two organizations joined to firm new firm .
Biggest benefit of joint venture business is that it enables business entity to increase its capacity
to facilitate innovation. Clash of culture ass well as limited external opportunities are considered
to be as biggest drawback of joint venture business (Achola and Were, 2018.).
In context of cafe Nero, as business entity is planning to launch new product in the
market of Romania, Cafe Nero can choose to adopt the Joint venture strategy. Reason for
suggesting the Joint venture strategy is that by entering into a JV cafe Nero company can easy

access to the information about market which is very much essential for introduction of new
product in successful manner.
Market segmentation
Marketing segmentation can be referred to as categorizing the wide market into small
segments on the basis of different characteristics.. It required by Cafe Nero to implement the
market segmentation strategy, as this tactic will assist an organization in fulfilling the needs and
expectations of customers in the market of Romania. The different type of market segmentation
strategy are :
Demographic : It is the marketing strategy where customer are segmented on the basis of
gender, age, education level etc.
Psychographic : Such type of market segmentation strategy mainly emphasizes on segmenting
the customer on the basis of their intrinsic characteristics or qualities.
Behavioural: In this type of market segmentation strategy the market segmentation is customers
attitude towards brand.
Geographic: Customers are segmented into small group on the basis of nation, region etc.
In relation to Cafe Nero, an organization can categorize market using the demographic
market segmentation strategy (Heggde and Shainesh, 2018). Reason for suggesting the
demographic marketing strategy to cafe Nero firm is that it is the market segmentation strategy
which will provide enterprise an ease in concentrating on those customers those who will mostly
buy specific product or services offered by enterprise.
Targeting in context of marketing is basically a selecting particular customer segment for
selling products or services. In context of cafe Nero, company can target both young as well as
adult people for selling the espresso sugar free Italian coffee. Firm can conduct marketing
campaign in Romania for informing people about launch of new coffee. Marketing campaign
strategy will provide business entity an ease in reaching to the target customer group. It will also
help an enterprise in influencing people to taste newly launched coffee. Discounts and combo
offers can be launched for attracting the target customer customers.
Porter Generic strategy
The different types of strategies which can be utilized by Cafe Nero for gaining the
competitive advantage in the market of Romania these are :

Cost leadership : It is the strategy in which companies target large market and sell their
products or services at low price to customers. The main benefit of cost leadership strategy is
that it can help business entity n increasing sales and profitability. In context of Cafe Nero, an
enterprise can adopt the cost leadership strategy at the time of initial launch of product in
Romania, as this tactic will help an enterprise in increasing market share. According to the cost
leadership strategy Cafe Nero can keep the price of the expresso sugar free Italian coffee low at
the time of launch, as it will help business entity in attracting customers (Rathnayaka, 2018.).
Major drawback which is required to be considered by manager before taking final
decision is that implementation of the cost leadership strategy might limit the product innovation.
Cost focus: An enterprise with cost focus strategy generally target niche market for selling their
products or services. In addition to this, an enterprise sell goods or services at lower price. In
addition this, Cafe Nero by lowering the price of products or services can provide high value
proposition to client. It is the strategy which will help Cafe Nero in maintaining the long term
sustainability in the market of Romania. By lowering the price of its products, cafe Nero can
differentiate itself from its competitors.
Differentiation: Firm with this type of strategy generally concentrate on launching the new
products. Cafe NERo can attempt to become unique in the industry, by offering those products
and services, which have value to the customers. Cafe NERO can provide hbigh qulaity of
products or services to customers at reasonable price.
Differentiation focus: Company with this type of strategy target a niche market and services or
products offered by such organization generality have different features. In context of market in
Romania, Cafe Nero can target small group of people with differentiated products. It is required
by the cafe Nero to adopt the innovation strategy as this tactic will assist them in gaining the
competitive advantage in Romina market.
CONCLUSION
From the above study it has been concluded that selection of the right market is very
much essential in order to achieve success, The other fact which has been discovered is that
strategic marketing plays very crucial role in driving an enterprise towards accomplishment of
desired business objectives. Joint venture as well as strategic alliance are two strategies which
can be utilized by organization for entering into global market. The other fact which has been
discovered from that by segmenting the large market into small segment an organization can

easily fulfil customers needs and meet their expectations. It has also been concluded from the
report that proper planning for business expansion is very much essential in order to achieve
desired objectives.
There are different options has been suggested which can be adopted by an organization
for entering into new market. The various strategies has been highlighted in the assignment that
can be used by company as it will help them in achieving success in international market.