Costa Coffee: Strategic Marketing Report for Romanian Market Entry

This report provides a comprehensive strategic marketing analysis for Costa Coffee's planned expansion into the Romanian market. The report begins with an introduction to strategic marketing and focuses on the adaptation of the marketing mix (7 P's) to suit the Romanian consumer preferences, highlighting the importance of adaptation over standardization. It then delves into the Customer-Based Brand Equity (CBBE) model, explaining its four stages (brand salience, brand performance & imagery, consumer reaction, and consumer brand resonance) and how Costa Coffee can build a strong brand. The report further explores integrated marketing communication, outlining effective communication methods like internet marketing, advertising, and sales promotion to reach the target market. Finally, the report discusses methods for measuring the success of the expansion, including setting specific targets. The report is based on Costa's plan to launch the AFFOGATO dessert coffee in Romania.

STRATEGIC MARKETING

Table of Content
INTRODUCTION...........................................................................................................................3
Adaption and standardization of marketing mix.........................................................................3
CBBE model...............................................................................................................................4
Integrated communication mix and methods..............................................................................7
Measurement of success..............................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic marketing can be defined as an activity or the process through which the
company carries on planning and developing for the purpose of differentiating from its
competitors by way of working and capitalizing its strengths and to provide its customers with
better value products (West, Ford and Ibrahim, 2015). The present report is based on company
Costa coffee. It is British multinational company founded in the year 1971 by Bruno Costa and
Sergio Costa. The company is a coffee house which is headquartered in Dunstable, Bedfordshire
in United Kingdom. Costa coffee is planning to expand in Romania by launching a new product
AFFOGATO which is a simple dessert coffee.
The report will start by outlining the general terms in adapting and standardizing the
marketing mix and demonstrating that is there need to market products according to the
customers. Further it will discuss Customer Based Brand Equity model to analyse how strong
brand can be build. Next it will highlight the concept of integrated marketing communication and
different communication methods to launch a new product to the target market. At last the report
will try to measure its success through setting up of various targets.
Adaption and standardization of marketing mix
Marketing mix can be defined as combination of different factors which are very
necessary for the development of product in to the market. The elements of marketing mix are
called 7 P's of marketing which includes components like price, place, promotion, product,
people, process and physical evidence.
Adapting to marketing mix is very necessary for the company in order to make its
product successful. This is because of the reason that marketing mix includes all the elements
which are necessary for the product or services to be successful. Adaption refers to as the
strategy wherein the company has to adapt to the marketing condition of the country where the
company wants to launch its products into that country. Whereas on the flip side standardization
means upgrading the products and services according to the needs and specifications of
consumers in that country. As Costa coffee is planning to expand in Romania so with the help of
PESTEL analysis of the country, the company came to know that the taste and preferences of the
people living in Romania is to have sweet and desserts very much (Moutinho and Vargas -
Sanchez, eds., 2018).

So Costa coffee house decided to adapt to this fact and that sweet and desserts are much
preferred by Romanian people so it decided to launch a new product keeping in mind the
preferences of people living in Romania (Felix, Rauschnabel and Hinsch, 2017). After adaption
to the preference of consumer Costa coffee launched a new product named AFFOGATO which
is a simple dessert coffee. This dessert coffee is made by adding one scoop of vanilla flavoured
ice cream to a tumbler of milk and adding either one or two shots of espresso. So with this
example it is clear that the company chose adaption rather than going for standardization.
Since the product have been adapted according to the taste and preference of the
consumers so the other elements of the marketing mix are also to be adapted according to the
trends currently going in the Romanian market. So for this it has to adopt all the changes in all
the elements of 7 P's in accordance with the trends and ways used by Romanians. In accordance
to this Costa coffee has to adapt to the pricing policy prevalent in the country which are being
used by similar other companies. Like most of the coffee companies uses the pricing policy of
penetration pricing which suggest companies to start with a low price and once the company get
established it increases the prices. So now Costa coffee also has to adapt to this pricing policy
only.
Similarly in case of place the company has to develop a place which is approved by the
government of Romania. The government of Romania has made certain specifications relating to
the atmosphere or the ambiance of the coffee house very decent and lively. The environment of
the coffee shop must be such that the customers coming here feels relaxed and rejuvenating. So
for this government has made some rules and regulations which are to be followed by Costa
coffee. For the another P that is promotion it has to follow the existing promotional strategies
which are followed by the existing similar companies. Like if the existing companies are using
social media advertising then Costa coffee house also has to use social media advertising. This is
similar in case of rest of the P' s that is process, people and physical evidence. For all these P's it
is very necessary for Costa coffee house to follow the existing rules and procedures which the
similar existing companies use (Štefko, Kiráľová and Mudrík, 2015).
CBBE model

(Source: What is CBBE model. 2019)
Just entering into the new market is not enough it is also very necessary and important to
maintain the brand image in front of the consumers so that the company runs successfully. For
building a strong brand in the market the company Costa coffee house is using model named
Customer Based Brand Equity model (CBBE model). The underlying concept behind applying
this model is to build a strong brand so that the consumer base increases (Hollebeek, Conduit and
Brodie, 2016). This model assist the company in knowing what the consumers will feel about the
products and services provided by the company and what the consumer experiences by using the
product or service. Also, this model helps in knowing the feelings, views, opinion, belief of the
consumer relating to the brand. This model proposes that if the company has a strong brand
equity then it will attract the consumers to buy more products or to consume more services and
this increases the customer loyalty and this gave a competitive advantage to Costa coffee house.
The model has four stages which are discussed in the connected points below-
Brand salience- the first stage of the model tries to find answer to the question that who
are you? The answer to this question is brand salience. It refers to the way through which
awareness for the brand can be created. This stage ensures that the company stands out
differently from its competitors and this thing the consumers should know.
For this the company can do a thorough market research with help of which company can
get knowledge and understanding that how the consumers look at the brand image of the
company. Also, with help of brand salience the company can get to know that how the consumer

differentiates between the product or the services of the company as compared to the
competitors.
Brand performance and brand imagery- this is the second stage which tries to find
solution to what are you? For answering to this question the company here discuss two aspects
that is the brand performance and imagery. The brand performance states that how well the
products and services of the company are in meeting to the expectations and needs of the
consumers. The performance of the company can be assessed on five different parameters which
are characteristics of product or service, the reliability of the product, durability of the product,
the efficiency, effectiveness and empathy of services, the style and design and at last the price of
the product or service.
On the other hand, imagery refers to as how well the brand meets the expectations of the
consumers on the social level, is the needs of the consumers are being catered by the company's
product and services or not (Kozlenkova, Samaha and Palmatier, 2014). By combining
performance and imagery the company can create its own unique brand personality which must
be communicated to the consumers so that they know what there brand is providing for the
consumers.
Consumer reaction- this is the third phase of the model where the company tries to find
what the consumers feel and think about the product or services offered by the company
(Morschett, Schramm - Klein and Zentes, 2015). Here the reactions of the customers can be
studied in two ways that is by feelings and other is by studying the judgement of the consumers
about the product. Feeling refers to the thinking about the product or the service relating to the
company and judgement refers to as the response of the consumer for the product or the service
after using it. This reaction can be any many forms like quality of the product or the service is
good or not, is the product or the service is trustworthy and likeable, whether the product or
service is fulfilling the needs and requirements of the consumers or not. The consumer will
respond for the brand in accordance with their experience which they get by using the product or
service.
Consumer brand resonance- this is the top most field of brand equity pyramid. This is
the toughest and most difficult and desired level which every company wishes to reach. Brand
resonance is achieved when the consumer feels a special, deep and strong psychological
attachment and bond with the company is called brand resonance. At this stage the consumers

build a very strong and loyal relation with the brand. For studying brand resonance can be sub-
divided into four categories that is attitudinal attachment, sense of community, active
engagement and behavioural loyalty. If the company wants to know the resonance then it has to
study these four aspects thoroughly.
Integrated communication mix and methods
Integrated marketing communication can be defined as a process or an activity which
ensures that all the different forms of communicating a message is closely and carefully linked
with one another. For marketing a product or service communication is the key because without
communication it is not at all possible to promote the product into the market. So it is very
necessary to have proper and clear communication.
For improving the marketing communication the company uses communication mix
(Amirkhanpour, Vrontis and Thrassou, 2014). A communication mix can be defined as a
combination of specific tools which are used to or medium which are used to communicate the
products and services within the market. The elements of communication mix are like
advertising, personal selling, internet marketing, public relations and many other ways (Gerritsen
and van Olderen, 2014).
Three different communication methods which are most effective in reaching to the target
market by Costa coffee for expanding in Romania are as follows-
Internet marketing- it can be defined as the process of marketing or promoting of
products and services of Costa with the help of internet. This is the most popular way of
promotion because of the major reason that most of the youth is busy on internet so it will be a
good option of promotion for a coffee house. It is a very broader and wider concept because it
has a wider reach of consumers that is it can be used to cover a large market proportion. With
help of internet marketing there are many options of marketing like Email marketing, web
marketing, search engine optimization, social media marketing and many other option.
Advertising- it is a type of communication mix element which Costa coffee can use in
order to communicate its products or services to the consumers and target market. Advertising is
a form of communication wherein the company employs a sponsor for making non- personal
messages in order to promote or sell the product or service of company. Advertisement can be in
form of print media advertising like advertisement in newspaper, magazines or advertisement in

television, radio, commercial ads, outdoor advertising and many other different types of
advertising.
Sales promotion- the another type of promotional activity which Costa coffee can
undertake is option of sales promotion. It is a method wherein the company tries to influence and
persuade the consumers so that they are attracted towards the products and services provided by
company. Sales promotion is a method used by companies wherein the company provides
different discounts, free gifts, samples, jackpots, and many other different types of discounts in
order to attract and influence consumers to come to the coffee stores.
Measurement of success
Just making plan and implementing it is not enough rather it is very necessary and crucial
that there are some measures through which the success can be measured. It is also applicable to
the case of Costa coffee house where it expanded in Romania by way of launching a new
product. But just launching the product is not enough (Lovelock and Patterson, 2015). It is the
duty of the company to make sure that the new product is a success. And for this the company
needs to have some success criteria on which the company can check that whether the company
has achieved what it wanted to achieve. For the purpose of measuring success the best method is
to set some target or standard and when the actual performance is done then to compare it with
the standard set and if there is deviation between actual and standard then corrective measures
can be taken.
Sales target- for measuring success the most important criteria is to set a sales target.
This is majorly because of the reason that sales tells that how much the company have sold its
products and services. So it is very necessary to set a target that at least this number of sales is
necessary to accomplish success (Morschett, Schramm - Klein and Zentes, 2015).
Market share- it is yet another way of measuring success. Market share is gained if the
company has good image and good customer base. So, if the market share is more than it is
evident that the company is successful.
Return on investment- the return on investment means the return which the company
gets on its investment done. Return on investment is a source of income and if this return on
investment is high then it indicates that the company is earning good amount of profits which
indicates that company is successful in its business.

CONCLUSION
On the completion of the report it was found that strategic marketing is very necessary
for the business to be successful. Strategic marketing can be defined as planning a marketing
strategy which is made in order to face the competition so that the company can avail a
competitive advantage over its customers. The report started by analysing the fact that whether
the company needs to adapt to the environment or needs to standardize its marketing mix. At this
time it was concluded that Costa coffee house needs to adapt to the marketing mix prevalent in
Romania.
Next it discussed that how it can use Consumer Based Brand Equity model in order to
understand and increase the base of the consumer. This model helped much because it answered
some questions like, Who are you?, What are you? What about you? What about you and me?
Further it highlighted integrated marketing communication and three different types of
communication channel like internet marketing, advertising and sales promotion. At last, the
report outlined some criteria for measuring success of the launch of new product like market
share, sales target, investments and many other different factors.

REFERENCES
Books and journals
Amirkhanpour, M., Vrontis, D. and Thrassou, A., 2014. Mobile marketing: a contemporary
strategic perspective. International Journal of Technology Marketing 5, 9(3), pp.252-
269.
Felix, R., Rauschnabel, P.A. and Hinsch, C., 2017. Elements of strategic social media marketing:
A holistic framework. Journal of Business Research, 70, pp.118-126.
Gerritsen, D. and van Olderen, R., 2014. Events as a strategic marketing tool. CABI.
Hollebeek, L.D., Conduit, J. and Brodie, R.J., 2016. Strategic drivers, anticipated and
unanticipated outcomes of customer engagement.
Kozlenkova, I.V., Samaha, S.A. and Palmatier, R.W., 2014. Resource-based theory in
marketing. Journal of the Academy of Marketing Science, 42(1), pp.1-21.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Morschett, D., Schramm - Klein, H. and Zentes, J., 2015. Strategic international
management (pp. 978-3658078836). Springer.
Moutinho, L. and Vargas - Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Štefko, R., Kiráľová, A. and Mudrík, M., 2015. Strategic marketing communication in
pilgrimage tourism. Procedia-Social and Behavioral Sciences, 175, pp.423-430.
West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage.
Oxford University Press, USA.
Online
What is CBBE model. 2019. [Online]. Available through:
<https://mybrandinggroup5mba15.wordpress.com/what-is-cbbe-model/>