Dsicuss about the Strategic Marketing of Coffee Bean and Tea Leaf.
In today’s competitive business environment, each and every organization needs to create a marketing plan to get more business opportunities in the market. It is an important document that includes all the aspects of marketing and promotion of company’s products. This report prepares a marketing plan proposal for a well-established organization Singapore i.e. Coffee Beans and Tea Leaf (The Coffee Bean & Tea Leaf, 2018). This marketing plan proposal is created to resolve the business issues which are faced by the organization in competitive beverages industry. One of the major issues of this organization is its prices which are higher than its competitors. Considering this issue, the organization needs to create effective marketing and pricing strategies. This marketing plan proposal includes the micro environmental analysis of Coffee Bean and Tea Leaf organization. Moreover, target market and audiences are identified with the help of market segmentation characteristics. At the end, the proposal includes the time frame that details the steps which are involved in developing marketing plan report.
The Coffee Bean & Tea Leaf is a well-established organization that was founded in America in the year 1963. The company is operated and owned by International Coffee & Tea, LLC that has its headquarters in Los Angeles, California. Till 2017, it has more than 1000 owned and franchised stores in the United States and over 30 other nations. In the year 1996, the founder of this organization Herbert Hymans sold its franchise rights to Victor Sassoon and Sunny Sassoon in Singapore. They quickly expanded the business internationally and opened the first outlet in Singapore in the same year (The Coffee Bean & Tea Leaf, 2018). Within two years of this, the organization was able to open its 29 stores in Malaysia and Singapore. The stores in Singapore also offer the similar products which are offered by other stores. In Singapore, all the products can be ordered on online applications and they can deliver the products to customers’ office or home. The organization has positioned itself as a rarest and finest loose-leaf teas and premium coffees. Despite of its higher prices, people prefer to drink the beverages offered by Coffee Bean & Tea Leaf. The below-given table shows the customer awareness of Coffee Bean and Tea Leaf along with its competing brands (Henderson, 2016). The current position can be analyzed from the below-table:
The mission statement of The Coffee Bean & Tea Leaf is to provide its customers the best coffee and tea products all over the world. The organization is working with the mission to develop a spirit within the organization which inspires the staff to offer the customers with Service Quality Experience, comfortable environment and product quality. It aims to serve Singaporean population and provide a destination and better quality experience.
On the other side, The Coffee Bean & Tea Leaf has stayed true to its vision for over 40 years that is to bring its customers the most unexpected collection of coffees and teas from the most growing estates of the world. At Coffee Bean & Tea Leaf, it has a great desire for coffee business and has a customer friendly attitude to provide the best experience of coffee and tea (The Coffee Bean & Tea Leaf, 2018).
Resources play an important role in the success of business operations of an organization. It needs to develop and manage the resources for overall growth of company. The Coffee Bean & Tea Leaf owns different types of resources such as human resources, intangible resources and physical resources. The organization has hired a well-trained and experienced staff that provides a better hospitality experience to its potential customers. Most of the employees at Coffee Bean and Tea Leaf are young in the age and intelligent. The company conducts a training and development program for the employees. This training gives them information about different kitchen equipment and cooking procedures. In addition to this, they are very customer-friendly so that they can meet the guests’ expectations. Physical resources of the organization include the building of store outlet, ambience, location of stores etc. The organization has chosen its location strategically and located its stores in shopping centers of Singapore (West, Ford, & Ibrahim, 2015). It has enough sitting capacity so that customers can feel comfortable. Intangible resources of this café are its well-established brand image and innovative practices which are implemented by this organization.
Competition (High)
In Singaporean Coffee and beverages industry, The Coffee Bean and Tea Leaf Organization is facing intense competition from some well-established players like Starbucks, Spinelli, KPT Drinks, Barista, Coffee House etc. From them, two major competitors are Starbucks and Spinelli. In this industry, Starbucks Corporation is leading with a higher value in comparison to other coffee stores. Spinelli’s is another major competitor of Coffee Bean and Tea Leaf. It is more noticeable as a coffee shop and serving tea and coffee to potential customers (Harrington, Ottenbacher, & Fauser, 2017).
Bargaining Power of Buyers (High)
Bargaining power of buyers is significantly high in this industry as people can easily shift to other competitors of Coffee Bean and Tea Leaf. The prices of its products are higher than other competitors so customers can purchase the same products from others. In this way, the switching cost is very low in this industry and there are various players with similar taste and quality of coffee products (Barney, 2014).
Bargaining Power of Suppliers (Low)
The bargaining power of suppliers is very low in this industry as it does not have large impact on the business of Coffee Bean and Tea Leaf. There are number of supplier in the industry so organization can negotiate for the prices of raw materials. Looking at this fact, this organization has implemented a diversified supply chain policy (Yang, 2013).
Threats of New Entrants (Moderate)
The Coffee Bean and Tea Leaf is facing moderate force from new entrants in the industry. It has a significant but not powerful impact on business of this organization. However, it is very easy to establish a new coffee shop business but they can find it very difficult to compete against already settled brands like Coffee Bean and Tea Leaf.
Threat of Substitutes (High)
In this industry, threat of substitutes is high as people can drink other products such as bottled beverages, cold drinks, instant beverages from grocery stores etc. This force is strong in the industry as it has adverse impact on the business operations of Coffee Bean and Tea Leaf (Dobbs, 2014).
Thus, the above micro-environmental analysis of Coffee Bean and Tea Leaf indicates that the organization needs to implement effective strategies to deal with the increased competition in the industry.
The major products and services of Coffee Bean and Tea Leaf are like coffee and tea beverages, sandwiches, pasta, salads, cakes and pasties. Under products and services, the organization is well-known for its selection of teas and coffee and its image for innovation like ice-blended coffee beverage and chai latte (The Coffee Bean & Tea Leaf, 2018).
There are four stages of product life cycle i.e. introduction, growth, maturity and decline. This organization is already in the business and it has introduced various products to customers in introduction phase. The use of effective marketing strategies enabled the organization to enhance its sales and customers base in growth phase. By analyzing the product life cycle stages, it can be determined that products of Coffee Bean and Tea Leaf are in the maturity phase. The reason behind this is that the sales of organization are near the highest, but the growth rate of the company is very slow. There are various competitors that are entering in the market with the similar products and strategies (Stark, 2015). It has affected the growth rate and sales of Coffee Bean and Tea Leaf Organization.
The organization can use different ways to strengthen the position of its products in Singaporean coffee industry. One of the primary ways that company must use is socially responsible target marketing. Through this, it should serve the interest of both organization and its targeted audiences. Moreover, it can position its coffee products through cost effective pricing strategy. The prices of company are higher than competitors so it can set affordable prices for its products. The marketing strategies of organization are successful in context of product, place and promotion. It is able to provide committed product quality to its customers. It has increased its customer base by the use of effective advertising and promotion strategies but this organization has failed to set affordable prices. It has affected the business operations of Coffee Bean adversely (Eden, & Ackermann, 2013).
Choosing an appropriate target market is very important for successful marketing of its products. Coffee Bean and Tea Leaf is using different variables of market segmentations to determine its targeted audiences (Solomon, et al, 2014). These segmentation characteristics of the audiences are stated below;
Under demographic segmentation, an organization targets the market on the basis of income, age, family size, religion etc. The Coffee Bean and Tea Leaf Organization is targeting both males and females aged 18 to 40 years (Verhoef, & Van Doorn, 2016). The major reason behind this is that they tend to be regular tea and coffee drinkers. To attract these customers, the company is majorly focusing to offer roasted coffee and effective services. Considering their willingness and desire for product, the organization is offering the products accordingly.
Coffee Bean and Tea Leaf Organization is using geographic segmentation by dividing the Singaporean Market into different geographical areas like cities and states. It is located in Orchard Central mall in Singapore. This is the mall that is situated along with the major shopping belt at Orchard Road. It attracts most of the shoppers of Singapore that is beneficial for the organization. The people can take a break from their shopping and can have coffee and breakfast at Coffee Bean and Tea Leaf store (Untaru, & Ispas, 2013).
Under behavioral segmentation, the company categorizes its customers based on their attitudes, knowledge and usage of products and services. Coffee Bean and Tea Leaf Company is targeting the people who are travelling to shopping center for shopping and fun activities. In addition to this, people in Singapore are looking to enjoy the quality coffee in a relaxing environment. These are the people who are willing for the products of Coffee Bean store. Coffee Bean and Tea Leaf is trying to provide expected place to the Singaporean population (Hsu, 2013). It can offer a place to chat with relatives and friends. There are various people who are the regular customers of Coffee Bean. To retain them, it is offering discount and other offers to regular customers.
Psychographic segmentation is the process under which an organization divides its potential customers on the basis of their values, lifestyle, and social class and personality traits. The prices of company’s products are higher than other competing brands so it is targeting middle and upper classes of society. In the country, the people are looking for the high hygiene standards, quick service time, freshness and quality of delivery. Considering these customers’ desires and willingness, Coffee Bean and Tea Leaf will offer its products in the future also (Varadarajan, 2010).
In this way, The Coffee Bean and Tea Leaf Organization are targeting the people by considering the needs and wants of different customers in Singapore. It is assisting the organization to become one of the well-established and most popular coffee stores in the world.
After this marketing plan proposal, Coffee Bean and Tea Leaf Organization will create a detailed marketing plan report. This report will be prepared in a systematic way and it will include different steps (Hill, Jones, & Schilling, 2014). The below-given action plan indicates all the actions of company and its time frame also:
|
Serial No. |
Key Actions |
Period in weeks |
Explanation for action |
|
A |
Analysis of issue |
2 Weeks |
At this step, the issue will be identified by marketing consultant. |
|
B |
Establishing marketing objectives |
3 weeks |
After analysing the issue, the organization will develop marketing objectives. |
|
C |
Formulation of strategies |
2 Weeks |
Marketing and research and development division will formulate the marketing strategies. |
|
D |
Implementation of strategies |
3 weeks |
Marketing strategies will be implemented under the supervision of top management. |
|
E |
Monitoring and control |
4 weeks |
After the implementation, it will be monitored and controlled for getting better results. |
|
F |
Evaluation of marketing plan’s effectiveness |
2 weeks |
At the end, the effectiveness of marketing plan will be measured through feedback and customer response for products of Coffee Bean and Tea Leaf. |
The below given Gantt chart shows the time frame for all the activities. The marketing plan process will be completed in 16 weeks.
Conclusion
In the limelight of above proposal, it can be concluded that Coffee Bean and Tea Leaf is the most popular organization that is serving the best tea and coffee products all over the world. The organization has expanded its products and services various countries including Singapore. The above proposal shows that this organization has adopted effective strategies to attract targeted audiences towards its beverages and services. The micro-environment of the organization indicates that competition is a strong force that is affecting the growth of business and put its products in maturity stage. Other forces of analysis are moderate for the business of Coffee Bean & Tea Leaf. In further marketing plan, the organization can implement more marketing strategies to deal with the external forces in Singapore.
References
Barney, J. B. (2014). Gaining and sustaining competitive advantage. UK: Pearson Higher Ed.
Dobbs, M. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.
Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.
Harrington, R. J., Ottenbacher, M. C., & Fauser, S. (2017). QSR brand value: Marketing mix dimensions among McDonald’s, KFC, Burger King, Subway and Starbucks. International Journal of Contemporary Hospitality Management, 29(1), 551-570.
Henderson, J. C. (2016). Foodservice in Singapore: Retaining a place for hawkers?. Journal of foodservice business research, 19(3), 272-286.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. UK: Cengage Learning.
Hsu, T. (2013). Coffee Bean & Tea Leaf marks 50th anniversary with free drinks,” Los Angeles Times.
Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014). Consumer behavior: Buying, having, and being (Vol. 10). UK: Pearson.
Stark, J. (2015). Product lifecycle management. In Product Lifecycle Management (Volume 1) (pp. 1-29). Germany: Springer, Cham.
The Coffee Bean & Tea Leaf. (2018). Home: The Coffee Bean & Tea Leaf, retrieved from https://www.coffeebean.com/ on 28 March 2018.
The Coffee Bean & Tea Leaf. (2018). The Coffee Bean & Tea Leaf® – Singapore. Retrieved from https://www.coffeebean.com.sg/ on 28 March 2018.
Untaru, E., & Ispas, A. (2013). Why do young people prefer fast-food restaurants? An exploratory study: Journal of Tourism, (15), 27-34.
Varadarajan, R. (2010). Strategic Marketing and Marketing Strategy: domain, definition, fundamental issues and fundamental premises, Journal of the Academy of Marketing Science, 38 (2), pp. 119-140.
Verhoef, P. C., & Van Doorn, J. (2016). Segmenting consumers according to their purchase of products with organic, fair-trade, and health labels. Journal of Marketing Behavior, 2(1), 19-37.
West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive advantage. USA: Oxford University Press.
Yang, J. (2013). “Three Companies Buy Into Coffee Bean,”Los Angeles Business Journal.
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