Marketing Strategies of Starbucks Coffee Company and Caff Nero Group Ltd - Essay Example

Marketing Strategies of Starbucks Coffee Company and Caffe Nero Group Ltd Brief Information about Marketing Strategies Marketing strategy is an important nexus between the products that are constantly produced and the final consumers of the products. Marketing strategy is a process that integrates many aspects including the impending competition from other alternative products, targeted population, the societal beliefs and many other more depending on the product to be marketed (Egan 157). The main aim of marketing strategy is to enhance and maintain the scope or the pool of customers who are aware of the product and subsequently develop a brand loyalty for the product. In marketing strategy, the driving force is the customer satisfaction, in this sense, the aspect of marketing research always precedes marketing research such that the reaction of the consumers is known with regard to the product (Naude, & Ivy 13). In this regard, the business of marketing strategy is to influence the decision of the customers towards a product. Marketing strategy therefore focuses much on building a strong customer base that eventually translates into increased profit margin for the customers. Having conducted a proper marketing research and conceiving the findings, marketing strategy then take effects (Egan 111). At this stage, the precursor of marketing strategy is the marketing plan which gives a structural breakdown of how the strategy will be rolled and the avenues to be explored when reaching the prospective customers effectively and efficiently with the least cost possible (Brennan 114). A marketing plan considers what is popularly known as four Ps i.e. product, price, place, and promotion. This information assists in devising a proper marketing strategy. Marketing strategy is one of the most important inputs any business should endeavor to engage in however big or small the business may be. Unfortunately, most businesses are always hesitant to actively do appropriate marketing strategy simply because they do not understand the contribution of the same in business (Brennan 146). It is obvious that for a business to thrive and grow exponentially in terms of building and restoring the customer base there has to be an aggressive marketing strategy that will be beneficial to the business. Brief Information about Both Companies Starbucks Coffee Company This coffee company was started in 1971 by three businessmen; it was situated in Seattle, Washington. The commencement of the coffee company was a brainchild of Gordon Bowker, Jerry Baldwin, and Zev Siegl (Brennan 77). It is said that the three had a burning passion for coffee and extended the same to starting the business so that the whole of Seattle can enjoy quality coffee made of the dark Arabica bean. The company growth rate could be said to have dwindled until 1981 when it established four retail stores (Gilbert 133). The proprietors of the company then delegated themselves roles and within the two months they were able to provide coffee to about 800 customers (Gilbert 142). Today, it can be said with reference that Starbucks Coffee Company is ahead of the park as retailer, roaster, and a professional specialty in the provision of best quality coffee in the world. There are a total of over 6000 retailing centers in the wider North and Latin America (Gilbert 98). They are also in Europe, Middle East and the area of Pacific Rim. The company is obliged in providing their customers with the best quality of coffee and at the same time doing their business such that they be compatible socially, economically and environmentally beneficial to the community where they conduct the business. This is in pursuit of there motto that ‘we believe it’s possible to do well and do good at the same time’. Caffe Nero Group Ltd It is rated that Caffe Nero Group Ltd is position three in UK this is after Whitbread Group's Costa Coffee and Starbucks. The company enjoys a significant number of outlets to the tune of 420 which has spread to countries like Turkey and the robust business zone of the United Arabs Emirates (UAE). Quite a number brands are offered in the company which includes panini sandwiches, pastas, soups, and Italian-style espresso drinks. The company also operates in the prestigious London's Heathrow airport courtesy of a partnership between the company and BAA. The company is under the stewardship of Gerry Ford as the CEO (Brennan 165). Marketing Strategies for the Companies Starbucks Coffee Company Being in the top three best coffee providers in the UK, Starbucks Coffee Company has thrived in the service by what is known to be unconventional methods of marketing. It is usual not to notice the company’s adverts in the newspapers, billboards, and other known marketing strategies areas. In fact, most business do wonder how the conventional strategies do work for the company and most them have made it a tendency to take notes whenever the company coils another strategy and would always mimic the company (Pendergrast 176). Some of the marketing strategies employed by the company includes; a perfect coffee cup- even though the prices of the company are a bit higher than the competing ones, the quality of the coffee the company provides is commensurate to the charges and the customers are notoriously satisfied with the quality of coffee and this has become the nature of the company, satisfaction of the customers is the priority of the company. Third place; the company through their services has convinced any of the customers who set into the place that it is the right place between home and work. The atmosphere is serene and provides the best relaxing atmosphere that is rejuvenating after tedious day (Pendergrast 201). Customer satisfaction is one of the greatest issues that the company relies on as a tool to attract and retain customers. From the entrance of the store to the final drop of the coffee, the company endeavors to have the customer satisfied Starbucks Community creation is one of the most strategy that has made the company realizes its objectives as such, the company has on their website a forum in which every customer who has ever been to any of the stores is able to give and express their views regarding any issue in the company and the company management also strives to respond and be directly engaged in the chat. This has culminated into the creation of a customer loyalty brand thus maintaining the pool of their customers (Behar, Howard, and Janet 143(Behar, Howard, and Janet). The company is also known to have thrived through the aspect of smart partnerships and continuous innovations which entails consistent improvement of the coffee taste by addition of the ingredients and widening the scope of the menu. The company has also engaged in the aspect of brand marketing to retain the customers. They believe in the ‘word of mouth’. This advertisement they believe is the best as they let the rest for the quality products and services to ascertain. To ensure dominance in the provision of coffee in the UK, the three competing coffee companies have devised unique methods of ensuring rapid expansion and proper satisfaction of the customers. In this case the coffee company Caffe Nero Group Ltd has employed the se of several strategies to cut itself a niche in the highly competitive market in the UK. The need for competitive marketing strategies became a necessity for the company following mushrooming of other coffee companies in the city of London by 1990. By May 1999, the company under the leadership of Ford explored the possibility of extending their operations outside the city of London (Behar, Howard, and Janet 154). In there expansion program, the company outlets rapidly increased from 13 to 30 within a record speed of 1 year. In the same breadth, the company intended to have 250 outlets by 2004 as documented in there plan of action. To achieve this vision, the company made in 2001 their first Initial Public Offerings (IPO) in which they were able to accrue 9 million pounds from London Stock Exchange (Kerin, Steven, and William 174). To there actual foresight, the company after their initial IPO had 53 outlets by the end of 2001and by May, the company had a total of 75 outlets (Kerin, Steven, and William 183). The IPO marketing strategy worked for the company and enabled them to have more outlets outside London. Having exhausted the potential of their first strategy, the company embarked on another strategy that involved the acquisition of other smaller firms that were initially established to provide some leverage for there development and expansion. In this regard, the company was able to make several acquisitions. For instance in 2002, the company acquired Aroma Limited and a series of other coffee shops formerly owned by McDonald's Corporation. The company in return paid ?2.3 million for acquiring Aroma shops and in the effect, the company outlets shot to 108 and positioning itself third in UK as a larger coffee provider (Milligan 112). The presence of the company has also extended to England, Brighton, Scotland to Glasgow. The company in 2003 disposed some of its units it acquired that were not performing to the expectation. The company then used a strategy of clustering its outlets in the metropolitan and other smaller regional cities. In pursuit of these, the company opened four more braches in Manchester totaling the Manchester outlets to be 9 (Milligan 74). Birmingham and other towns in this regard became the target of the cluster strategy. The company’s long-term strategy is to be able to achieve financial independence that will enable them to open at least 35-40 outlets every year without sourcing for funds from external proxies. Conclusion The two companies provide the same services and are all in the business of greatly expanding dominating the market which is normal in any business. The companies also have different marketing strategies which they believe can best echo their presence into the outside world. Moreover, all the two companies now operate beyond the scope of one nation; in this regard the companies are faced with formulating different policies for marketing in the different areas. It s also salient that the two companies have opted for completely different strategies to market their products as Starbucks rides on the customer satisfaction while Caffe Nero Group is boosting of making severe inroads as a perfect strategy to reach the people. From the two companies methods of marketing one can construe that marketing strategy requires a constant and dynamic innovation without relenting to achieve the status of customer’s loyalty. Works Cited Behar, Howard, and Janet Goldstein. It's not about the coffee: leadership principles from a life at Starbucks. New York, N.Y.: Portfolio, 2007. Print. Brennan, Ross. Contemporary strategic marketing. 2nd ed. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan, 2008. Print. Egan, John. Relationship Marketing: Exploring relational strategies in marketing.. 2. ed. Harlow: Pearson Education, 2004. Print. Gilbert, Sara. The story of Starbucks. Collingwood, ON: Saunders, 2009. Print. Kerin, Roger A., Steven William Hartley, and William Rudelius. Marketing. 9/e [9th ed. Boston: McGraw-Hill/Irwin, 2009. Print. Marketing revolution ? the changes and challenges of marketing in the UK.. London: Wiley, 2006. Print. Milligan, Shayne. Marketing strategies. London: Research World, 2012. Print. .Naude, P., and J. Ivy. The marketing strategies of universities in the UK. London: John Wiley & Sons, 1997. Print. Pendergrast, Mark. Uncommon grounds: the history of coffee and how it transformed our world. Rev. ed. New York: Basic Books, 2010. Print. Read More