Marketing Assignment: Business Case Analysis of Costa Coffee

Question

Task: Write a portfolio report on marketing assignment briefly discussing about the Costa Coffee company and its journey in the market.

Answer

1. Introduction to the company selected for marketing assignment
Costa Coffee is a premium brand, the largest coffeehouse chain in the UK, and considered to be as the 2ndlargest in terms of coffeehouse chain in the world. Brothers Sergio and Bruno Costa founded Costa Coffee in 1971 in the country London. It was founded by the brothers as the wholesale operation that used to supply the roasted coffee to specialists and caterers in the Italian shops. In the year 1995, Whitbread acquired this and sold to the company Coca-Cola in 2019 and after that, it grew its 3401 stores in the almost thirty-one countries and it gave employment to 18,412 workers (Maamoun 2020). Since the year 1971, they have listed their name in the list of best quality coffee servers using the most-finest beans of coffee. Also, with coffee, they had also created a unique story.

The Costa brothers started costa coffee when an idea struck to their mind regarding coffee. The idea was to make coffee as the basic and everyday need for all the people of London.
When entering another millennium after the 70s, the demand for the coffee of artisan coffee increased rapidly. So many shops were opened in London and from the last ten years, it is known as the best and favorite coffee shop in the United Kingdom. The vision of Costa Coffee is to provide generosity to every single customer of Costa Coffee since its different generosity services and products, variety contains hotels, leisure clubs, and restaurants.

Fig: Costa Coffee in UK
(Source: Created by author)

1.1 PURPOSE OF THE PORTFOLIO:-
The aim of the portfolio is to letreadersaware of the costa coffee company and its journey.
The objective of the business costa coffee is to know as the best coffee shop of the world and they want this objective to achieve with a personal touch. Its vision is to make the customers order from their Costa Coffee application and they want to make their order complete and hand over the product when they come to store.

There is a maximum number of customers of Costa Coffee lies in the age between fifteen to forty-five as they desire to experience the blended and new beverages provided by Costa Coffee.

They have some Values ie:-
Accountability - They focus on the positive result by being in their commitments.

Integrity –they act honestly, boldly, responsibly, and openly manner. Passion –They challenge their status with full enthusiasm and energy.

Dedication - They act urgently and decisively. And of course;
"Respect"

2. Positioning of the Company
The position of Costa Coffee for its product as premium and good quality coffee and other products at affordable prices.Its positioning is in agreement with its standard of its main product is coffee and similar things, beverages, and services provided by it are the advantages of competition of Costa Coffee. Costa Coffee's position is its EXCLUSIVE coffee. Quality coffee in a reasonable and affordable price is the position of the Costa Coffee.

3.1 Promotional Activities
Advertising –This is globally recognized brand that has no close relationship with printed advertisement, TV, and another source of advertisement. They attract their customers by giving some attractive messages in the public domain using social media platforms. The senior digital and social media marketing manager Adam Deal stated, “We love this fun, clever, unique way to enhance customer’s dynamic lifestyles, staying one step ahead of their needs. There is the belief of Costa Coffee that “we don’t mind who the customer is and what the customer is in to, we the Costa Coffee is always there for you with our services and a huge choice of products. Both females and males of age eighteen to forty-five years old are their product’s main target. Although their preference is young adults they make sure they satisfy everyone’s needs because their product best suits the adults (businesswomen and men). The excellent quality of the coffee at a reasonable price is the position of Costa Coffee. There is a palette whose is burgundy is Costa Coffee’s visual identity and it reflects confidence and patroon, arousing a sense of friendliness and warmth that makes a customer feel the smell of coffee (Chou 2020).

Fig: Target points of Costa Coffee
(Source: Created by author)

Social Media Marketing –Coffee Costa uses different social media platforms to reinforce its brand personality and positioning (Begum et al. 2020). We can see some brand building and true interaction in Coffee Costa’s UK Twitter account. The background of the profile introduces its tweeters team with photos. To maintain an effective relationship with its followers on Twitter Costa mix retweet promotions and Tweeter Hashtag(Coleman 2018). There is a story in the YouTube channel of Costa Coffee that tells us about a world that is away from monkeys brewing up, it is a blending of the features from the sports team sponsored by Costa and coffee infomercials. The annual Costa Ice Tour that takes place in summer combines a sequence of events that are based on real-life with the full incorporation of social media interactivity.

Costa Coffee has a different approach over Facebook which is different from its competitor Starbucks. The Facebook page of Starbucks looks like a corporate magazine whereas the Facebook page of Costa Coffee is socially attractive and is full of fun and joy. Costa uses the rare used notes and history features and integrates its posts with Pinterest. Costa demonstrates its commitment to give a consistent experience to its followers and to make sure the content it provides on social media is unique. The Costa organizes regular photo competitions for its followers, followers are encouraged to click pictures of their beloved beverages and themselves, win a prize by sharing them online. The social media campaign of Costa is simple but very attractive and effective; it gets a good amount of attention from followers on social media platforms.

Word of Mouth Marketing – Costa Coffee is a global and premium brand that does not depend much on print media and TV. They mostly follow the word-of-mouth strategy to promote their products. They make their customers their promoters (Hanet al. 2018). They not just try to serve coffee to their customers but also provide a good experience.
Public Relations and Publicity – Costa does not rely much on print media and TV. Costa Coffee is a premium brand and that’s why it often gets highlighted by the mainstream media whenever there is a rise in sales or decline in sales.

Sales Promotions – to promote its sales it offers free samples to its consumers to get feedback about the product and make customers purchase more. They try to offer a quality product at an affordable and acceptable price. They sometimes attract customers by offering discounts on certain products.

Direct Marketing – Costa Coffee emails, texts directly to their regular or registered customers. They make sure that their customers are aware of every new product of the Costa. They wish people on special occasions through emails and texts. Events and Experiences – Costa Coffee encourages sports events for example the Tokyo 2020 Olympic Games was also sponsored by Costa Coffee. They focus on social themes such as loneliness, food waste, and litter. They believe in corporate social responsibility (CSR) which is why they have set up the Costa foundation which is established for school projects and schools in communities which are specialized in coffee-growing.

3.2 Product
The product is the main part in terms of the marketing mix mechanism. Costa Coffee is famous for the tastes and quality of its products. The focal point of Costa is its coffee. The products of the Costa are awesome: Mocha Coffee, Latte Coffee, Cappuccino, Expresses, White, Flat, and Americano, are some delicious products of Costa. Also, it is worth talking about the cold coffees of Costa; Coffee cream coffee, Frsotino coffee, Mocha cream coffee, and Lemonade coffee are some examples of delicious cold coffees of Costa.

Fig: Different product offered by Costa
(Source: created by author)

3.3 Place
Costa Coffee has outlets in 31 countries. The Costa has 2,467 outlets in the UK. Their operation has extended to different zones of Africa and Asia. They chose attractive areas like office sites, corporate areas, and shopping malls to boost their business. Building a relationship with the customer is the topmost priority of Costa. They take into cognizance different aspects before selecting distribution and placement strategies. They select the placement of distribution keeping in the mind the comfort and time-consuming aspect. Rich people and the upper-middle class are their priority when they choose the place for establishing Costa Coffee. Good-looking theaters, famous shopping malls, and busy corporate areas are preferred by Costa.

Fig: increasing number of costa coffee shops in UK
(Source: created by author)

3.4 People
Costa mainly focuses on its customers and employees. More than twenty thousand employees work for Costa Coffee. Costa’s employees are well trained to maintain highly polite and professional behavior. They treat every single customer with dignity and try to provide a pleasant experience to the customer. As there is a variety of customers so, they make sure that their employees have good communications skills to deal with such a variety of customers. The employees along with English also speak regional languages to make the customers feel more familiar and comfortable. They have a uniform dress code for their employees all over the world. 4. Impact of their relevant taught theories and strategic decisions on its success After going through all their strategies of the marketing mix, we can say that Costa Coffee has been successful in getting publicity and attention. They were able to attract customers by using simple and effective strategies. It can be found that they have utilized the platform of social media to its fullest have made a good impact on their success. In the first P that is Promotional mixed activity; the cost has not focused much on mainstream media instead it has relied much on the word of mouth marketing. I think their belief is that people are the main agent who can promote their brand and that is why they treat every customer with dignity and make sure the customer gets a pleasant experience. They have used the social media platform beautifully; nowadays social media has become the home of the people and they spend most of their time in social media that is why Costa is very active in social media platforms; be it Twitter, Facebook, Instagram, Youtube, etc. Most people love discounts so they occasionally offer discounts on certain products to increase their sales as well as increase the numbers of customers. The second P is Product; Costa is known for its products' taste and quality. Other big players most of the time get diverted from its main product but in the case of Costa; coffee is still its main product. The third P that is Place: Costa is very careful regarding selection of distribution and placement. Customer’s comfort and time are important aspects that are taken into cognizance before selecting a place for establishing the Coffee Costa. They prefer areas where you get famous shopping malls, theatres, corporate areas, and such to establish Costa Coffee. The Fourth P is People; Costa cares for their employees and customer. They make sure that their employees go under certain pieces of training to make themselves more capable to handle a variety of customers. They are well trained to communicate softly with the customers. Maintaining professionalism is very important on the part of the employees of Costa. As they operate in different countries; their employees speak regional languages to make sure the customers feel familiar and comfortable. They used all of these marketing mix to maintain their brand, to spread the brand, to increase the number of customers, and to be known as the best coffee seller in the world.

Fig: revenue increment of Costa Coffee
(Source: Created by Author)

5 Effective ways that can assist the company in evaluating the effectiveness of its marketing efforts There are many KPIs that can help the Costa Coffee evaluate the effectiveness of their marketing strategies (Li 2020). Operational KPIs – this type of key performance indicator KPI can assist the Costa Coffee to measure the level of satisfaction that employees of their company have. If more number of employees are dissatisfied then the employee turnover rate will become higher and the company will have to spend more money on the training of the employees. Customer KPIs – this type of key indicator performance KPI can help the Costa Coffee in evaluating the relationship of their company and their customers. Customer retention is an example of customer KPI, that helps in tuning existing or current customers into regular customers who will keep purchasing from your company and not from your competitors. There is a another tool, net promoter scores that evaluate a number of customers and see how likely these customers can promote your business by recommending your business to others.

Sales KPIs – this type of key performance indicators KPIs will assist the Costa Coffee’s sales teams in measuring the efficiency and effectiveness, with the ultimate aim of improving processes and methodologies to boost sales. So, it is a key performance indicator that tells you how productively your sales channel is working. Key performance indicator like customer life time value can provide a general perception of the amount of money a customer is supposed to spend in their lifetime with your business.

Financial KPIs – this type of Key performance indicator KPI can assist the Costa Coffee measure the financial health or profitability of their respective business. Gross profit margins, net profit margins, inventory turnover rate, and accounts receivable are some good key performance indicators KPIs that study how your business is utilizing the resources; leads to a smarter and proper management of money.

Other than Key performance Indicators there are some good social media analytics tools that can help the Costa Coffee in making their marketing strategies more effective (Lee 2018).

1. Sprout Social – it will help the Coffee Costa evaluate LinkedIn engagement, tally up Twitter link clicks, track Facebook page impressions, assess your content performance on Pinterest, all from a single location. After then it quickly share and organize your data presentation-ready and comprehensive reports.

2. Taplnfluence – it is an analytical type of platform which pulls out many of the ‘what-ifs’ associated to influencer marketing. This comprises of metrics like the potential price tag, engagement rate behind any influencer. There are other social media analytics tools like Hubspot, SHIELDApp, SHORTStack, Google Analytics, Keyhole Curalate, Snaplytics, BuzzSumo.

Conclusion
From the above points it can be said that the Costa Coffee is a premium brand, largest coffehouse chain in the United Kingdom and second largest in terms of coffeehouse chain in the world. It was not easy for the founders of Costa Coffee to maintain the brand and to be called as the world’s number one coffee shop. Be it the marketing strategies or maintaining the quality of their coffee and other products; they have stood up in all these aspects. They achieved the vision of the Costa Coffee by providing generosity to every single customer of the Costa Coffee since its different generosity services and products, variety contains hotels, leisure clubs, and restaurants.

References
Coleman, A., How Costa Coffee uses twitter to establish a corporate identity.
Maamoun, A., 2020. Coca-Cola Brews a Hot Acquisition: Costa Coffee. SAGE Publications: SAGE Business Cases Originals. Begum, E.A., Yavuz, K. and Piotr, K., 2020. Impact of Social Media in Coffee Retail Business. Journal of Business and Economic Development, 5(1), pp.44-55.

Han, H., Nguyen, H.N., Song, H., Chua, B.L., Lee, S. and Kim, W., 2018. Drivers of brand loyalty in the chain coffee shop industry. Marketing assignment International Journal of Hospitality Management, 72, pp.86-97. Chou, S.F., Horng, J.S., Liu, C.H.S. and Lin, J.Y., 2020. Identifying the critical factors of customer behavior: An integration perspective of marketing strategy and components of attitudes. Journal of Retailing and Consumer Services, 55, p.102113. Li, H., Hong, T., Lee, S.H. and Sofos, M., 2020. System-level key performance indicators for building performance evaluation. Energy and Buildings, 209, p.109703.

Lee, I., 2018. Social media analytics for enterprises: Typology, methods, and processes. Business Horizons, 61(2), pp.199-210.