Taste Trends of the Coffee Industry - Coursework Example

Taste Trends of the Coffee Industry Challenges that face players in the coffee industry More than 90% of coffee production occursin the developing countries in mostly in Africa while the market for the product is rife in the developed countries. The industry is worth billions of dollars with some of the leading coffee markets being Brazil, India and the Philippines. Europe and the United States are equally vital markets. operation in the industry requires effective understanding of the different features of the market. Management of resources is a fundamental aspect of institutional management. The management of a firm must utilize the different resources effectively with the view of discovering new markets thereby expanding a product or service’s market share. Resource based view to management asserts that the management must prioritize the effective management of both tangible and intangible assets at the firm thereby optimizing productivity. The production of agricultural products is seasonal a feature that influences the patterns of both the supply and demand of such products including coffee. Such factors present marketers with numerous operational challenges as they seek to develop competitive brands in such markets. Among the leading coffee markets in the world are Brazil, Philippines, India and Europe. The availability of the products in the market especially during particular seasons results in increased supply of the product thereby resulting in reduction of the prices of the product. Introducing a new product in such a market therefore requires effective analysis of the industry with the view of understanding the intricate feature of the industry. Marketing is a function of the management mandated with the establishing, anticipating and satisfying customer demands. Marketers of coffee brands thus face myriad challenges arising from the structure of the market. Key among the challenges is competition. As one of the oldest industries in the world, the industry attracted numerous entrepreneurs who specialize in similar functions thereby competing for the same markets in South America, Europe and parts of Asia. Competition influences the demand and supply thereby influencing the productivity of the industry as the numerous players target the same market. The players must therefore develop effective strategies in order to position their products effectively thereby safeguarding their profitability. While the size of the market has remained constant throughout, the supply changes depending on the prevailing factors thereby influencing the number of marketers who operate in the industry. The price of coffee varies depending on the prevailing market factors that affect the production and marketing of the product key among which is the seasonality. Brazil and Europe for example are the largest coffee markets in the world that affect the prices of coffee globally. A fluctuation in the price of coffee in such markets affects the price and demand of the same product in different parts of the world. However, fluctuation in the supply of coffee especially by the farmers influence the price of the product a fracture that compels marketers to stay vigilant to that trends in the farming, processing and marketing of the product. Concerns of farmer exploitation in the poor parts of Africa led to the development of a social movement, which seeks to cushion coffee farmers from exploitation. The development of the free trade movement affected the coffee industry as it seeks to cushion the coffee farmers from exploitative intermediaries. Companies that manufacture coffee products such as drinking chocolates exploited the poor farmers thereby limiting the benefits that such farmers obtained from their hard labor. Such manufacturer developed their manufacturing plants within the rich coffee plantations in different parts of West Africa thereby developing a personal interaction with the farmers. However, the manufacturers sustained exploitation and poor relations with the societies. Additionally the companies recruited children to work in the companies thereby minimizing the cost of operation. This way, the societies remained poor and under developed for long. The fair trade movement thus sought to eradicate child labor and the exploitation of farmers in such regions. The social group influences the production and consumption of coffee products since it labels the products specifically thereby promoting the appeal of the products. The intensive operation of the movement succeeded in mitigating the exploitation by drawing the attention of coffee consumers in the leading markets. The movement affected the market thereby influencing the operations of the players in the industry. Considering such factors thus becomes fundamental for any new player since maintaining ethical operation is fundamental in accessing the market. Scholarly argument Success in marketing relies on the ability of the market to win over a substantial size of the market that will ensure the profitability of a product. This requires marketers to consider all the factors in the industry that are likely to affect the performance of a new product. Additionally, marketers must exhibit opportunistic traits and therefore investigate the prevailing marketer features with the view of capitalizing on some of the features that other marketers may not observe in time. The coffee is one such precarious but equally large industry that requires effective marketers to determine opportunities that will sustain the operation of a new brand. Such factors as the price and the quality of the product are viral factors that will influence the performance of a new brand thereby compelling effective analysis of such factors in the process of developing a captive brand. Most of the consumer countries such as Brazil, India and the Philippines have coffee boards that determine the prices of coffee. Among the factors that such bards consider in the determination of the prices of the products are the patterns of demand and supply and the quality of the products among many other intricate features of the products. A marketer of the new coffee brand must therefore consider and understand the prevalence of the factors thereby influencing the production department in order to the company to sustain the production of desirable products. In addition to the mandatory consideration of the factors that influence the demand and supply of the products, the marketer must carry out extensive media production of the new product in order to increase the brand awareness. Promotion is an essential element of the marketing mix that compels marketers to use effective media in increasing the brand awareness within the target market thereby increasing the possibilities of the sale of the new brand. Ethical factors are equally important especially in such a precarious industry. Coffee consumers have increasingly become conscious of the operations of the producers of the products owing to the extensive campaigns by the fair trade movement coupled with the news coverage of the misery that coffee farmers face in different parts of the world. Marketers must therefore ensure that the company operates ethically thereby minimizing harm to the society. Ethical operations safeguard the interests of the company by acquiring desirable reputation for the company. Additionally, ethical requirements will compel the company to abide by the laws governing the operation of companies in the different countries. Review of related literature Barney, (1991) explains that an effective brand of coffee must develop progressively. This implies that the marketers must employ effective strategies that will sustain the profitability of the brands. This implies that the new brand of coffee must grow its market share a feature that will result in the growth of the product as it increases its market share progressively. Additionally, every marketer seeks to sustain the longevity of a brand. This requirement dictates that companies must survive for long while making profits. Such are vital requirements that will influence the undertakings of the marketing department as they strive to position the new brand of coffee in the already developed industry. Effective marketers must therefore always develop appropriate solutions to the marketing challenges that the new brand is likely to face. Such will include increased media campaigns in order to increases the awareness of the product. Additionally the company must carry out other strategic and cost effective marketing in order to minimize the operating capital while maximizing profitability. As a function of the management, marketing influences the operations of a company. The marketing department carries out extensive market research and analysis thereby influencing he production process in order to cushion the company from incurring loses. The coffee industry, one of the oldest industries in the world has its intricate features that marketers must consider before introducing any new product. Among the features, that marketers investigate is the viability of a new product (Ahuja & Lamper, 2001). The established coffee industry has numerous operators but this does not deter the introduction of yet another new brand. However, the introduction of such new products requires effective marketing strategies that will succeed in winning a substantial share of the market for the new product. Effective management of resources in an organization relies in the ability of the management to observing the prevailing trends thereby determining the strengths and weaknesses of the brand. Additionally, the management requires the management to carry out extensive market researches thereby determining the prevailing opportunities and threats that the market presents the product. This way, it becomes possible for the management to strategize the company’s operations thereby succeeding in positioning timely products. Strengths and weaknesses are feature of the product that the company influences depending on the advice of the marketer. Among the possible strengths of a new coffee brand may include its high quality and the diversification of its brands in terms of coffee grades. This way, the new product increases its market share thereby ascertaining profitability. Opportunities and threats on the other hand are factors of the market that a marketer may not influence. However, the marketer must synchronize the operations of the manufacture to the dictates of such factors. Recommendations The introduction of new brand in an already established industry is difficult just as the discussion above portrays. An established industry has its leading players who understand the intrigues of the industry. Such contribute to the frustration of a new player who seeks to introduce a new brand of the same product. However, just as is the case in the sale and marketing of any product, success in the coffee industry relies on ability of a marketer to introduce an appropriate brand strategically thereby benefiting from the prevailing market factors. Among the ways that will earn a marketer success in the coffee industry, include: Ethical production of the coffee products, as the discussion above portrays the use of child labor and exploitation of farmers in poor African countries is a major concern in the industry. The extensive campaigns by the proponents of fair trade influence the market thereby increasing the consumer awareness. Maintain ethical production and supporting the development of poor countries, helps improve the reputation of the new brand. Social corporate responsibility is yet another cost effective way of marketing for a product hereby increasing both the brand awareness and the reputation of the entrepreneurship. The type of investing dictates that an entrepreneur runs parallel projects that benefit the society thereby contributing to the sustenance of the society. In the coffee industry, such projects may include the construction of schools in the poor African societies and the provisions of scholarship to the children thereby improving the quality of their lives. This way, the brand improves its reputation thereby increasing its market share. Diversification is yet another marketing strategy that will improve the success rates of a new brand of coffee in the market. An entrepreneur must present different categories of the product thereby succeeding in targeting different classes of the target market. By introducing different grades of coffee for example, an entrepreneur increases the brands market share owing to the fact that a large group of the target market can afford the product. Benefits of proposed recommendations The report seeks to improve the brand awareness and the reputation of a product thereby increasing the profitability of the product as mormme people purchase the product. In the coffee industry just as in any other industry, the marketer must understand the industry thereby developing appropriate marketing strategies that will succeed in positioning the products appropriately within the markets. The above recommendations therefore seek to improve a product’s market share of a product in the coffee industry. An effective corporate responsibility initiative has diverse benefits to brand. Key among the benefits is the fact that such are cost effective ways of advertising the brand. Marketers invest millions of dollars in running extensive media adverts with the view of increasing the reputation and the awareness of a product. However, this is not the case in corporate responsibility initiatives. The launch of scholarships and the development of schools for example are major human-interest newsworthy events that the general media both in the local and in the international societies will run without the marketer influencing them. Additionally, the different media will naturally run extensive public relations as they run the news items thereby earning the new brand free and equally effective opportunity to advertise its products. The same applies to the employment of ethical means of production. The coffee industry has faced myriad challenges with the players in the industry facing intense criticism for the manifestation of poverty and poor living standards in African countries that produce coffee. An increase in complains of such exploitations resulted in the development of free trade, a social movement that seeks to discourage the consumption of products that face criticism of exploiting the coffee farmers. A new player in the industry must therefore maintain ethical operations by ensuring that they do not encourage child labor and do not exploit the farmers. This way, it becomes possible to advertise the new products as part of the fair trade movement a feature that will not only increase the price of the product but also increase the reputation of the new brands. Diversification on the other hand is a strategic marketing strategy that promises an increased market share within the shortest time. Diversification refers to the introduction of myriad categories of the product in the same market. Grading of coffee ensures that different categories of coffee fetch varying prices thereby targeting different markets. By introducing different grades within the same market, the new brand will enjoy and increased market owing to the fact that coffee is a favored product in such regions as Brazil and the Europe. Diversification also commands that a marketer tries other new markets. Parts of Asia and the parts of South America constitute new markets that a marketer may possibly introduce the product. Such initiatives may have varied results but the risks involved in a business often influence the lucrativeness of the market in case the market appreciates the new product. Call to action In a summary, the coffee industry is viable and can therefore accommodate any new product. However, the introduction of such new product requires effective marketing strategies in order to earn the product and appropriate market share. Among the leading coffee markets in the world are Brazil, India, the Philippines and Europe. The markets are elitist in nature and feature that therefore influences the operation of marketers in order to develop appropriate products and position them strategically in order to earn a substantial market share. The process of positioning the new product requires an effective evaluation of the product coupled with an extensive analysis of both the new brand and the target market before positioning it in the market. Effective marketing requires the utilization of such marketing tools as the marketing mix that provides marketers with elaborate understanding of the industry. As explained, the coffee industry is precarious and requires strategic operations in order for a product to achieve increased profitability. This requires marketers to have information on the prevailing market factors and trends. Among the leading trends in the market currently is the push for the abolition of exploitation of the coffee farmers in different parts of the world. Most governments in the coffee producing countries currently protect coffee farmers from exploitation and ban child labor. A marketer for a new brand must therefore observe such trends in order to earn the new brand an appropriate reputation in the market thereby possibly increasing the brands market share. Among the fundamental elements of the marketing mix that influences the operations of any new marketer in the coffee industry include the prevailing price of coffee which just as the prices of any other products relies on the volume of both demand and supply. A marketer must therefore observe such market factors as the fluctuating patterns of both demand and supply thereby developing appropriate prices of the products. This way, the brand increases its likelihood of winning substantial shares of the market. References Ahuja, G. & Morris, C. L. ( 2001). Entrepreneurship in large corporations: A longitudinal study of how established firms create breakthrough inventions. Strategic management journal 22: 521-543. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management 1: 99-122. Sharon, A., A and Busenitz, L. W. (2001). The entrepreneurship of resource-based theory. Journal of Management 27: 755–775. Read More