Meridian Coffee and Tea Strategic Marketing Strategies - Case Study Example

Meridian Coffee and Tea Strategic Marketing Plan Name Student Number Name of the Unit Name of the Unit Coordinator Word Count Executive Summary Meridian Coffee and Tea Lounge is a new business wherein the proprietors’ aims serve coffee, tea and assorted cookies and cakes. The coffee and tea industry is competitive and is faced by numerous challenges. However, the micro economic and macro economic factors indicate the business can operate effectively. In addition, Meridian Coffee and Tea Lounge are better placed to operate effectively provided the organisation manages its operation and managerial requirements effectively and efficiently. The aim of the marketing plan is to increase the market share, to increase amount of sales to equal 10% within six months and to serve more than 100 customers daily. To achieve this requirement, the promotional strategy and other components in the marketing mix will play an important role in engaging and convincing the consumers to purchase at Meridian Coffee and Tea Lounge. The targeted markets are individuals between the ages of 18-40 years and should be employed. This market segment is important because they can access the city centre were the lounge is located. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Industry Analysis: Five Competitive Forces 4 SMART Objectives 6 Hierarchy of Strategies 6 SWOT Analysis 7 Macro Analysis: PESTEL Analysis 9 Marketing Mix 11 Market Analysis 12 Conclusion 12 References 12 Introduction Strategic marketing plan is an important integral in ensuring success of a product or a service in the market. Marketing plans are utilised in different organisations and such a strategic marketing plan is Meridian Coffee and Tea Lounge. Meridian Coffee and Tea Longue is a café that offers a variety of drinks plus some accompaniments (Gilligan & Wilson, 2012). The aim of the marketing plan is to determine whether Meridian Coffee and Tea Longue can succeed in a market place where there are numerous competitors and different demands from consumers. Meridian Coffee and Tea Lounge is a proposed businesses approach to incorporate numerous products and services apart from only coffee and tea. Other products that will be offered include cookies, cakes, cold and hot beverages, and other types of beverages. Industry Analysis: Five Competitive Forces To understand the coffee and tea industry, and how the industry operates, it is important to use Porter’s Five Competitive Forces analysis. The following is five forces analysis of Meridian Coffee and Tea Lounge: Threat of new entrants – new entrants can enter the market easily business it does not require a lot of capital. However, the only problem is building the business brand and assuring the consumers the products offered are of high quality (McDonald, Payne & Frow, 2011). Bargaining power of buyers – the buyers have more bargaining powers because there are numerous competitors in which the consumers can access and purchase both tea and coffee (Drummond, Ensor & Ashford, 2013). Moreover, the consumers can sample large variety of products from the competitors and hence the buyers in the coffee and tea industry are better placed. Threat from substitutes – This is also a risky business because there are numerous substitutes in which the consumers can purchase (Ferrell, 2012). Some of these substitutes include soft drinks, smoothes and juices. In addition, the consumers have information on threats associated to coffee and tea and they may decide not to purchase the drinks rather choose to purchase the substitutes. Rivalry – the coffee and tea industry has numerous rivals business most of the businesses sells similar products. For example, there are numerous stores whether franchise or chains that offers the products (McDonald, 2007). Moreover, there are speciality tea and coffee stores that offer higher quality but expensive services and products. In addition, some stores offer both coffee and tea in addition to high quality foods. Bargaining power of suppliers – the marketing of supplying coffee and tea is over crowded because products come from different parts across the world (McLeish, 2010). In addition, the suppliers are facing challenges in instability of coffee and tea prices that may affect the suppliers and also the consumers. Moreover, some buyers choose suppliers based on the quality of the coffee beans and tealeaves and therefore some suppliers can be affected immensely. In addition, there are economic and environmental concerns whereby the buyers have to follow to determine whether the coffee and tea are acceptable. This means it is easier to access suppliers and Meridian Coffee and Tea Lounge can negotiate with the suppliers to purchase high quality products at a lower price. SMART Objectives In developing a marketing plan, it is important to state the objectives of the marketing plan. Some of the objectives of Meridian Coffee and Tea Lounge: Increase the market share by 5% within three months Aim to serve 100 customers daily for the first one week and the second and subsequent weeks should serve 50 more customers Revenues should account to 10% of sales after six months Hierarchy of Strategies Formulation of strategies usually takes three approaches and levels, which are at corporate level, business unit level and functional level. The aim of strategies is to champion both competitiveness and survival of the organisation. The following are the hierarchy of strategies of Meridian Coffee and Tea Lounge: Corporate level strategy – the aim of this level is selection of businesses in which the organisation will compete with and businesses portfolio (McDonald & Wilson, 2011). For example, the corporative level strategy of Meridian Coffee and Tea Lounge is provision of tea and coffee to the consumers. In addition, the businesses should be located at a busy point to increase the number of consumers who can access the shop (Baker, 2008). Moreover, Meridian Coffee and Tea Lounge ensure the different entities within the organisation such as employees, products and financial resources complements each other to fulfil the objectives of Meridian Coffee and Tea Lounge. Business unit level strategy – at Meridian Coffee and Tea Lounge, this is the level wherein the product line is managed. This level ensures that Meridian Coffee and Tea Lounge sustain the quality and efficiency of the services with the aim of championing competitive advantage for the products and services offered. Therefore, the business positions itself against competitors, anticipation of changes and influencing competition through effective strategic actions. Functional level strategy – Meridian Coffee and Tea Lounge ensures the finance, human resource, marketing and R&D work together with the aim of retaining the consumers. This level entails value chain and business processes to ensure effective operations within the organisation. SWOT Analysis SWOT Analysis is important in determining the capability and capacity of an organisation towards fulfilling its objectives. The aim of SWOT analysis is for Meridian Coffee and Tea Lounge to maximise on strengths and opportunities while strategising on threats and weaknesses. The following are the SWOT analysis of Meridian Coffee and Tea Lounge: Strengths Experienced staff and employees Access to high quality and cheap coffee beans Weaknesses Lack of enough capital Lack of enough managerial time Lack of healthy products Opportunities Technological advancement Diversification on products Large consumer base and changing populations Threats Political and cultural problems in foreign countries Volatility in coffee process Consumer trends to healthy products Increased competition Macro Analysis: PESTEL Analysis PESTEL analysis identifies the external factors that affect an organisation. PESTEL analysis brings into consideration political, economic, and social, technology, environmental and legal factors. The following is PESTEL analysis of Coffee and Tea Lounge: Political – The political system defines regulations and rules that determines how the industry operates. Currently there are no major regulations that may inhibit operation of such business provided local legislations and permits requirements have been fulfilled (Blythe & Megicks, 2010). Moreover, the Australia government is stable politically and therefore provides background and avenue wherein businesses can be sustained. Nevertheless, it is important for the Australian government to cultivate positive relationship with those countries that produce both tea and coffee. Economic – The local economy in Australia is positive and businesses operating within the environment have recorded good economic review. Moreover, the level of taxation plus other revenue challenges by the government is favourable. In addition, the local currency fares well other currencies. The consumers on the other hand have disposal income and thus the consumers have buying power. Social – The consumer preferences and work pattern as reported in working classes in Australia affects immensely the way consumer consumers Meridian Coffee and Tea Lounge products. In addition, the changing lifestyle of the population dictates the type of products and services that consumer can access (Blythe & Megicks, 2010). This means the occupation and lifestyle patterns have increased the positive perception of accessing coffee and teashops to accomplish business transactions. However, the consumer population are championing health wise living meaning some consumers tend to stay away from tea and coffee rather concentrating on substitute products such as juicy. Technology – technology has played an important role in this industry. The consumers have access numerous means of paying for their bills and access of funds. This means it is easier for consumers to purchase for products. Moreover, innovative technology and biotechnology developments have created means in which high quality coffee beans and tealeaves can be produced. Development in agriculture may result in reduction of purchase cost of coffee beans and tealeaves resulting in better revenues for the organisation. Environmental- the environment is a major concern whereby numerous organisations are advocating for better cultivation methods because of global warming (Blythe & Megicks, 2010). Moreover, global warming and other environmental disasters have affected those countries producing these raw materials and thus increasing the costs. In addition, environmental regulations and rules are becoming more conscious towards sustaining the environment. Legal – changes in legal requirements such as tougher trade regulations and customs affects the way the business operates. Moreover, health organisations have started to understand the threats on health related problems; therefore, health organisations and lobbyist are advocating for taking legal actions to control consumption of these beverages. Marketing Mix Marketing mix is a crucial framework to understand how services and products will be offered to the customers. The marketing mix of Meridian Coffee and Tea Lounge are: Product – Tea and coffee remains the main product and focus of Meridian Coffee and Tea Lounge but the product portfolio would be expand to fulfil the requirements of different consumers. Apart from the physical products, the employees would be pushed to offer customer care and customer services that are exemplary and competitive. Price – Pricing is an important component in determining the success of an organisation or products/services. Penetration and mark up strategies will be utilised to attract and maintain consumers while also making the business to make profits. Therefore, the prices will be lower or at par with competitors to ensure both the market share and revenues are increased. Place – The traditional placement methods will be used to provide the products and services to the consumers. A shop will be leased and the shop customised to ensure both convenience and luxury is encouraged to ensure the consumers are satisfied with the products and services that are offered. Promotion – Promotion is important in engaging consumers and it is important in determine whether consumer behaviour can be addressed to convince the consumers to purchase the Meridian Coffee and Tea Lounge’s products (Reed, 2006). Some of the promotional strategies to be used are television advertisements, Internet based marketing and branding. Consumers who will visit the store will be handed gifts in gift packs that are branded with the company logo and products offered. Market Analysis Segmentation – market segmentation is dividing the entire market with the aim of creating smaller parts whereby the minimal organisation resources can be maximised on (McLeish, 2010). The segmentation process will be based on demographics and geographic location. Target market – the targeted market is the age between 18 – 40 years. Moreover, these individuals should be working. Moreover, the business should be located at the city centre whereby consumers can access the services and products easily. Conclusion Marketing plan is an important requirement for a business that aims to succeed in its operations. The marketing plan of Meridian Coffee and Tea Lounge aims to supply tea, coffee and other products to the consumers. The aim of the marketing plan is to increase the market share and to increase organisational revenues. The coffee and tea industry is competitive and therefore the proposed marketing mix is important in ensuring the business becomes successful. Moreover, introducing new technologies and diversification may result in success of Meridian Coffee and Tea Lounge. References Baker, M. (2008). The strategic marketing plan audit, 2nd Ed. Cambridge: Cambridge Strategy Publications Limited Blythe, J., & Megicks, P. (2010). Marketing planning: Strategy, environment and context. London: Financial Times Prentice Hall Drummond, G., Ensor, J., & Ashford, R. (2013). Strategic marketing: Planning and control, 2nd Ed. London: Routledge Publishers Ferrell, O. (2012). Marketing strategy text and cases, 6th Ed. London: Cengage Learning Gilligan, C., & Wilson, R. (2012). Strategic marketing plan. London: Routledge Publishers McDonald, M. (2007). Malcolm McDonald on marketing planning: Understanding marketing plans and strategy. New York: Kogan Page Publishers McDonald, M., & Wilson, H. (2011). Marketing plans: How to prepare them, how to use them, 7th Ed. New York: John Wiley & Sons McDonald, M., Payne, A., & Frow, P. (2011). Marketing plans for services: A complete guide. New York: John Wiley & Sons McLeish, B. (2010). Successful marketing strategies for nonprofit organizations: Winning in the age of the elusive donor, 2nd Ed. New York: John Wiley & Sons Reed, P. (2006). Strategic marketing planning, 2nd Ed. Sydney: Cengage Learning Australia Read More