Companies with smaller profit margins must create a larger following of loyal customers because they need to rely on the quantity of customers, not the markup, for their profits. Caffe Umbria will charge $2.00 per 16oz cup of coffee to keep it below the national average cost while not compromising quality of the product. Packaging needs to stay small for purchase in store and online for home brewers so that the customer still gets the same fresh taste at home as they do in the cafes and extra care should be taken to ensure the freshness of the coffee, safety of the packaging, and the shrink in the packaging process. The lower the costs in shrink of packaging and
Additionally, Starbucks has distribution agreements with office coffee supplier, hotels, and airlines. Using a variety of distribution channels allows the company to reach a wider market, however the company needs to be careful with this approach due to the potential channel of conflict. Implementation of Pricing Strategy Starbucks is the leader of the coffee market. As an individual company, it controls several times more market than any of its competitors. More than just a high priced coffee shop, Starbucks offers a combination of quality, authority, and relative value.
And the customer will assume since the other coffee maker was on sale and such a low price that this coffee maker must be a good deal as well and chances are buy it. But again looking at the prices end of this, food is cheaper at Wal-mart. You can buy the name brand name products or you can buy the greater value products which are Wal-mart's brand products for even cheaper. Wal-mart also has a convince factor, I find myself going to Wal-mart for say car speakers and I end up buy speakers, movies, and food. The fact that it is all in one building
Liberty University Final Group Paper BUSI520 –B21 Jeffrey Wietholter, Nathaniel Martin, Richard Oros, John Rafoss, Kevin Staples March 7, 2012 Executive Summary Keurig is today’s fastest growing home and business single cup coffee maker. Their invention of the single K-Cup coffee roasting product has revolutionized the coffee industry. Keurig today is a subsidiary of Green Mountain Coffee Roasters (GMCR). GMCR prides itself on producing premium all natural coffee beans and is now providing the coffee for Keurig’s K-Cups. Written below is an integrated marketing analysis of Keurig’s current business.
Not only is this changing its economic strategy, as coffee gets more expensive to buy for the company, but it more importantly improves the image of the brand on the social stage. Indeed, this presents Starbucks as a company which is concerned with the quality of the production, which employment conditions etc. Be careful! This marketing strategy tends to be misleading: Starbucks is not a fair-trade company! Only the majority of the coffee it purchases comes from fair-trade
Bargaining power : Customers have low bargaining power since they typically can't bargain for the price of their coffee. Customers also have more options due to the large variety of products offered by number of competitors Switching cost : Based upon the low switching cost, buyers are extremely powerful in this situation. There are several coffee shops/cafes in our area, all offering similar products to customers. Discount reusable thermos and/or mug : By giving a discount to those who bring in their reusable thermos and/or mug into the store (aim to be as eco-friendly as possible) Complimentary products and services: These range from merchandise sold at our cafe to different types of good that are offered • Mugs/thermos with our logo • Paper Cups • Coffee beans/Coffee grounds • Sugar • Cream Loyalty program : The café rewards customers based on their spending.This is aimed at attracting and maintaining customers at Broadway Cafe. Through this program we will develop a competitive advantage by implementing an IT solution specializing in customer relationship management as well as other databases and interfaces that ultimately increase efficiencies, while optimizing operations Loyalty programs reduce
The customers can be classified into two kinds: the long-standing customers like residents and faculties, and temporary customers like students and visitors. In September 2009, Tim Hortons will open up its first store in the West Mall Complex (WMX) of SFU, replacing Raven's Cafe and Chartwells. Tim Hortons is a fast-serve coffee franchise that serves coffee, espresso products, cold beverages, sweets such as donuts, and breakfast, lunch and dinner meals. The company’s quality products, combined with a strong reputation for service and reliability, allow them to attract and maintain a large and loyal customer base nationwide. Although Tim Hortons and Renaissance Coffee operate in different segments of the coffee market, and differ strongly from atmosphere and business structure, to product quality and product pricing, Renaissance's sales level may still be strongly affected by this opening.
They have different types of warm and cold coffee, lemonade, sandwiches, salads, pastry, candy and they also sell cups that they designed. Starbucks Activities. Starbucks believes that they should have a positive impact on the community they serve. Since that they have grown into a big international business which has over 20000 stores over 62 countries they have a lot of activities. From helping the community with their services, offering more work for the neighborhood, and helping with the gardening of their parks, supporting foundation etc.
Starbucks provides a variety of coffees and es pres s os as well as fres h food items including pas tries , s andwiches , s alads , and other items . Additionally, it s ells branded bottled co ffees and ice cream. Starbucks als o owns s everal brands including Seattle’s Bes t Coffee and Tazo tea. Starbucks Corporation was given a weighting of 20% becaus e of its brand image and appeal to its target market. Starbucks offers a s imilar fres h ingredien t environment and values its employees highly.
Does one rival have a somewhat weaker strategy than the other two? • No, Costco, Sam’s, and BJ’s Wholesale do not have the highly similar strategies. All of there are different in many ways, Costco prefer to offer their customers items in bulk and reasonable prices. By doing that Costco believe they could generate more customers because they are providing more products at a discounted price so the customers would feel like they are getting more for their money. BJ’s strategy focuses on providing their shoppers more groceries and packaged goods in small portions.