Assignment Sample on UMKC8T-15-M Strategic Marketing Planning
Introduction
Analysing the marketing condition of a business is considered to be highly important as it helps in evaluating the current position of a company within a market. Besides, it also helps in analysing strengths and weaknesses of the business and further can be effective in proposing proper marketing strategy for developing its future operations. The current study in this respect will be dealing with analysing and evaluating the current position of Cavendish Coffee Company of the UK. In this respect, the study will be analysing the current position of the company through micro and macro environment analysis using different frameworks. In addition, issues faced by the company will also be discussed in this study and further will be proposing certain recommendations that will be effective for the current company to mitigate its issues.
Background of the company
Cavendish Coffee Company is a coffee shop located in Bristol that offers coffee, tea, cakes and soft drinks to its customers. As per the case study, the company is owned by Charlotte Cavendish who is considered to be the 6th generation of Cavendish family. The company has been operating since 1840 and sells tea and coffee as well as roasted coffee in Park Street in Bristol. The company specialises in roasting coffee beans each morning and preparing coffee from it. The company mainly caters to the students of University alongside its staff, tourist and local office workers. The owner of the company mainly believes in building sustainable relationships with all its suppliers and creates a loyal following base. Besides, the company also works with the notion of being kind to the environment and creating no harm with its operations (Case Study).
Findings and analysis
Critical analysis and evaluation of the current position Cavendish Coffee Company
Micro environment analysis
SWOT analysis
Strengths
The quality of the coffee served by the company through the roasting of coffee beans each morning is considered to be one of its strengths. Additionally, building sustainable relationships with its suppliers and having no negative impact on the environment also seems to be its strengths.
Weaknesses
From the case study, it can be analysed that the company takes a lot of time for serving a cup of coffee. The late delivery can be one of its weaknesses further followed by its simplistic and rustic decorations within the store. Besides, the prices are higher than usual and offer ‘single-origin’ coffees by the company can be its weaknesses in the current scenario.
Opportunities
Coffee industry within the domain of the UK contributes £10.1 billion to its economy (Aquacure, 2020). The growth of the coffee industry by 7.8% each year can be one of its opportunities. Additionally, the UK market research depicted that usually the population of the country prefers consumption of 2 cups of coffee daily (Ridder, 2022). It reveals a spending of £3.9 billion on coffee and is likely to be increased to £4 billion (Hospitality and Catering News, 2020).
Threats
Rising competition can be a threat for the current company. Famous coffee shops such as Costa Coffee with 2681 units followed by Greggs with 2078 units, Starbucks with 1025 units and others seems to pose high threat for the current company (Lock, 2022).
Figure 1: Coffee shop chains in the UK
(Source: Lock, 2022)
Porter’s Five Forces
Porter’s Five Forces assist in evaluating five external forces of a company within a market that further evaluates its current position. According to Chesula and Kiriinya (2018), five forces of the framework include power of bargaining of the buyers and suppliers, new entrants’ threats, industry rivalry, competition and substitution threats.
Competition: High
Competition within the market of the UK in terms of coffee shops is high as it includes several competitors like Starbucks, Costa Coffee, and others. It is because, coffee chains seem to have increased by 21% in the current scenario, further revealing 27% of traffic at lunchtime by the coffee shops (Comunicaffe, 2020).
Buyers’ bargaining power: High
Buyers bargaining power seems to be high as there are several coffee stores within the domain of the UK. Due to high availability of coffee stores options, buyers seem to be in a superior position to bargain with the prices of the coffee (Isabelle et al. 2020).
Suppliers’ bargaining power: Low
Suppliers’ bargaining power of the company is considered to be having low impact because individual suppliers within the UK are moderate. As the variety of suppliers in the UK is high, therefore, bargaining power of the supplier decreases (Anastasiu et al. 2020).
Substitution threat: High
Substitute products such as ready to drink beverages, instant beverages and others are readily available within the UK domain, and thus, it indicates high impact on the current company.
New entry threat: Medium
The threat of new entry is medium as the company seems to have a developed brand within the UK domain and thus seems to be secured from new entrants.
Macro environment analysis
PEST analysis
Political
The UK seems to be having stable political conditions. However, prevalence of Brexit impacted its political constitution and created several uncertainties within the domain. Besides, the UK seems to be having a basic tax rate of 20% that impacts current operations of Cavendish Coffee Company within the domain (Government of the UK, 2022). Henceforth, political environment of the UK depicts a stable current condition of the company.
Economical
Prevalence of covid scenario created a severe impact on the economic condition of the UK. Growth rate of GDP as of 2020 depicted -19.4% that seems to be increasing in the first quarter of 2021 revealing a rate of 5.4% (Trading Economics, 2022). However, currently, it depicts a rate of 1.1% that is lower than the previous rate (Trading Economics, 2022).
Figure 2: GDP growth rate
(Source: Trading Economics, 2022)
Considering the GDP rate, the current company seems to be facing issues in its monetary values of its products. Supporting this notion it can be pointed out that the inflation rate of the UK is also high depicting 5.1% as of 2021 (Trading Economics, 2022). Based on this, it can be stated that the current company is facing issues in the prices of raw materials due to high inflation rate within the domain. Henceforth, economic conditions of the UK are creating issues for the current situation of the company.
Figure 3: Inflation rate of the UK
(Source: Trading Economics, 2022)
Social
The current scenario of the UK depicts that mostly people prefer having at least 2 cups of coffee a day. As the current population of the UK depicts 68,429,595; therefore, Cavendish Coffee Company seems to be having high opportunities of sales within the market (Worldometer, 2022).
Technological
The UK market seems to be highly advanced in the aspects of technology. As of current scenario, the UK government is spending £13.5 billion in technological development (Scammell, 2021). Henceforth, the current company seems to be having the benefit of developing its business technically and attracting more customers.
Critical evaluation of Cavendish Coffee Company’s current issues
From the presented case study, it can be observed that Cavendish Coffee Company is facing several issues. Common issues faced by the company include trade drop at the time of Christmas and in summer when students of the university go home. Other than that, growth in chains of big coffee shops alongside competitive pricing strategies used by competitors is also creating issues for the current company in its growth. Additionally, prevalence of covid-19 has increased online operations of universities that have impacted the current company in low sales, as students do not visit university as before. Additionally, as Cavendish Coffee Company fails to adapt covid-19 guidelines and provide online delivery to the customers; therefore, the company is facing a huge drop of sales in the current scenario. Lastly, improper promotion also seems to be another issue for the company that fails in creating awareness regarding the company’s offerings.
Recommendations for marketing strategy of Cavendish Coffee Company
The above section depicts that Cavendish Coffee Company is facing several issues that further creates high barriers in its operations. According to Paul and Mas (2020), issues in business operation creates barriers for the companies to accomplish their targeted goals. Additionally, it also disturbs the position of a company within a market. In this respect, the framework of marketing mix can be effective for suggesting the current company with different recommendations for the issues currently faced within the business domain. As per the illustration of Do and Vu (2020), the framework of 7 P’s of marketing mainly deals with the factors of price, place, promotion, product, physical evidence, process, and people.
Place: From the presented case study, it can be observed that Charlotte did not use the cellar of its shop for any operations other than storing things. In this respect, it can be recommended that using the cellar of the coffee shop as a basement area for drinking and eating can be effective for Cavendish Coffee Company. It can be effective in providing more space to the shop that further will be able to attract more customers and adjust more customers without any crowd (Loo and Leung, 2018).
Promotion: On the other hand, it can be noticed that Charlotte also did not use any social media sites for promotion. As per the opinion of Neeley and Leonardi (2018), promotion is considered to be one of the greatest strengths of marketing of a business. It helps in creating awareness among the customers that further attracts more customers within the domain. In this respect, Charlotte can be effective in using social media promotion strategy in its business. Hence, due to the prevalence of covid-19, most of the populations are working from home and have developed the habits of online activities. Besides, the UK currently has 45 million active social media users within the nation (Gjorgievska, 2021). In this respect, promoting the services of Cavendish Coffee Company in the social media sites such as Facebook, Instagram, Twitter and others can be effective for the current company to attract more customers and solve the issues of promotion and sales.
Price: From the case study, it can also be observed that Cavendish Coffee Company is using a strategy of high pricing for its products. However, as argued by Liu et al. (2019), low prices of the products and services tend to attract more customers. It also helps in attracting all types of customers despite their social status and earnings. In this respect, if the current company adopts a low pricing strategy then it can be assumed that the issues of low sales can be mitigated within the business. Additionally, as low price helps in attracting more customers therefore as per demand and supply theory the sales of the product will be increased (Esfandiari and Rezvani, 2021). This gradually will impact positively on the revenue margin of the company.
Product: Cavendish Coffee Company seems to be producing high and finest quality products. Besides, it also deals with sourcing coffee from a single farm. In this respect, bringing diversity to its product as per Porter’s generic strategy can be effective for the company to increase its competitive edge (Karyani and Rossieta, 2018). This can include availability of black coffee, plain coffee, local coffee besides other famous coffees.
Physical evidence: Changing wooden and rustic decor of the company into modern interior can be effective in enhancing the looks of Cavendish Coffee Company. Besides, playing soft music in the background will also create a relaxing atmosphere and further will be effective in attracting more customers.
Process: Implementing an online delivery system in the process of operation can be effective for Cavendish Coffee Company to cope with the current guidelines and challenges of covid. Besides, as there is 65 millions of internet users within the UK; therefore, it will be effective in enhancing sales through online operations (Gjorgievska, 2021).
People: Currently, the company mainly targets university students alongside local office workers. However, if Cavendish Coffee Company targets people of all ages and occupation through its online operations, then the company will be effective in solving the issues of low sales within the market.
Challenges of the recommended strategy
Based on the stated recommendations in the section above it can be analysed that Cavendish Coffee Company can be effective in solving the current issues faced within the domain. However, implementation of the aforesaid changes is likely to bring several challenges to the business. Cost is considered to be one of the main challenges likely to be faced by the company in implementing the recommendation of modern infrastructure. As opined by Gilal et al. (2019), low cost can prevent the company in implementing desired changes for mitigating current issues and thus can serve as the most effective challenge in solving companies current issues. Other than that, challenges of skilled workforce in handling the social media promotion and online delivery activities can also be faced by the company. It is because, as per, handling a social media account and online delivery service requires proper workforce that are highly skilled with technological knowledge.
Improper technical skills may fail the company to compile with the social media and online delivery guidelines (Zeithaml et al. 2020). In this respect, skilled employees can be another challenge for the company in implementing the aforesaid recommendations. Besides, improper planning can also be a challenge in this scenario. It is because as per Kotler (2018), development of modern infrastructure requires proper planning that can be effective to attract customers. In this respect if the company fails to develop a proper plan regarding the development of the modern infrastructure then the company can fail to resolve issues and attract more customers. Other than that, challenges of training and development can also be faced within the business. Henceforth, proper implementation of strategic notions can be effective for the current company to mitigate its issues and implement the stated suggestions [Refer to Appendix].
Conclusion
From the current study, it can be concluded that Cavendish Coffee Company, a coffee company operating in Bristol has been facing certain issues in its operations. Additionally, the prevalence of covid-19 scenario has also been creating several barriers for the business and as the business did not adopt the covid-19 protocols and did not start online delivery services, therefore, the company faces the issues of low sales and revenue. Analysing the current position of the company through micro and macro environments framework it can be stated that the company is in a superior position within the market but it has been affected by changing demands of the customers. In this respect, implementing the framework of marketing mix and dealing with 7 P’s of marketing can be effective for the current company to mitigate its issues. Based on the concerned matter, it has been suggested that implementation of an online delivery system, low pricing strategy, modern infrastructure and others can be highly beneficial for the company to attract more customers and increase its sales and revenue.
Question 2: Critical reflection
Introduction
This section will be dealing with the analysis of strengths and limitations of the SWOT framework that has been used in Question 1 in order to analyse the micro environment of Cavendish Coffee Company.
Strengths of SWOT framework
SWOT analysis has been used in the previous question in order to analyse the internal or microenvironment of the concerned company. As per the illustration of Vlados (2019), SWOT analysis mainly deals with analysing the internal factors that are strength, weakness, opportunities and threats of a business within a market. Therefore, it can be stated that one of the main benefits of SWOT analysis includes understanding the business in a better way. I think that as SWOT analysis helps in analysing internal factors, therefore, through this Framework a person can be able to understand all the factors within a business and adopt proper marketing strategies.
On the other hand, as opined by Vlados and Chatzinikolaou (2019), this Framework also helps in determining the threats and weaknesses within a business. In this respect, I think that this framework can be analysed as detecting threats that further can create awareness among the employees regarding the internal risk. Other than that, as this framework helps in capitalising all the opportunities within a business, therefore, this framework provides the benefit of future growth within a business. Henceforth, it can be stated that through this framework, a business can be highly benefited in analysing its internal factors and acting properly to accomplish its targeted goals.
Limitations of SWOT framework
The stated framework besides having several benefits also tends to have certain limitations that can impact a business analysis. However, as argued by Xiong (2018), SWOT analysis does not prioritise any issues of marketing as it is being highly concerned in analysing the internal factors of business. This can be considered as one of the limitations of this framework. Apart from that, this framework also does not provide any solution or any types of alternative decisions for the company to implement based on identified issues. It is because this framework mainly deals with analysing business factors and identifying relevant issues in business.
Besides as stated by Taghavifard et al. (2018), SWOT analysis is highly based on business capabilities and thus generates too many ideas that further create confusion among the employees. Hence, it can also impact the decision making process of a company. Nonetheless, as per Terziev and Stoilova (2019), the information provided through this framework may not be useful in every scenario. It can only be used for analysing the current position of the company within the market. Hence, these are considered to be the limitations of SWOT analysis according to me.
Conclusion
From the current study, it can be concluded that SWOT analysis helps in analysing the internal factors of a business and is considered to its strengths. However, information provided by this framework is limited to internal analysis of a company and may not be used in outer areas.
Reference list
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Chesula, O.W. and Kiriinya, S.N., (2018). Competitiveness In The Telecommunication Sector In Kenya Using Porters Five Forces Model. International Journal of Research in Finance and Marketing (IJRFM), 8(7), pp.1-10.
Comunicaffe, (2020). New research reveals intense competition in the UK coffee business, Comunicaffe. Available at: https://www.comunicaffe.com/new-research-reveals-intense-competition-in-the-uk-coffee-business/ [Accessed on 11 January 2022]
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Appendix: Marketing audit
| Macro environment audit | ||||||||||||||
PEST analysis
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| Micro environment audit | ||||||||||||||
SWOT analysis
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Porter’s Five Forces
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| Competitors analysis
Competition within the market of the UK in terms of coffee shops is high as it includes several competitors like Starbucks, Costa Coffee, and others. It is because coffee chains seem to have increased by 21% in the current scenario, further revealing 27% of traffic at lunchtime by the coffee shops (Comunicaffe, 2020). Rising competition can be a threat for the current company. Famous coffee shops such as Costa Coffee with 2681 units followed by Greggs with 2078 units, Starbucks with 1025 units and others seems to pose high threat for the current company (Lock, 2022). |
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Marketing strategy
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