Costa coffee founded in 1971 in London, UK. Now, it has become the biggest top coffee shop chain in UK. However, Costa should be prepared for danger in times of peace. In this report, some suggestions will be proposed to improve Costa coffee’s marketing mix over the next three years. We begin with a brief description of the data we collected, then go on to analyses coffee shop market environment in UK; the next section looks at Costa coffee’s current statement of marketing mix, and finally we give recommendation of the marketing mix in the next year for Costa Coffee. Section 1 Primary research method Primary data was collected in the form of questionnaire with 15 questions, which was posted on the Internet. Also, questionnaires were filled out on the street in Nottingham randomly, and 32 of them are valid. Respondents are of different age, gender and employment current statement. The data collected covers people’s feeling towards Costa, products improvement (especially food, drinks, service and environment), extended promotion necessity, channels to know Costa, payment term preference, Costa store accessibility etc. (More details, please refer to the Appendix) The purpose of the questionnaire: 1. Segment the market by personal information; find out the target market; explore potential market for future development 2. 3. Justify our assumptions are aligned with customers’ needs. Figure out strengths and weakness of Costa. 1
The reason for using questionnaire: 1. 2. 3. 4. The result is more objective as respondents are chosen at random. Questions are designed by purpose. A large number of respondents could be reached. Outcome is straightforward and is easy for analysis.
The difficulty by collecting data: At the beginning, we posted our questionnaire on the Internet but no response even experienced more than 100 visitors within one week. Therefore, we decided to take face-to-face survey. Another problem is that few people were willing to fill in the questionnaire, which leads to small numbers of questionnaire returned. Besides, the limitation of our questionnaire is that the quantity of samples is not large enough to make it very objective, which comes up with quality problems. That means respondents might not be typical enough to represent particular groups of customers, and the options and questions are not comprehensive enough. Secondary research method: We used the Internet to collect secondary data related coffee shop. The whole market size and forecast shows us current statement of coffee shop industry that could be used for making short-term marketing strategy in next 3 years; the market share figure indicates the position and competitors of Costa; knowing more about competitors help it modify its marketing mix to be better. Using the expenditure on different media type advertising data, which claims the promotion structure of Costa coffee, to identify weakness of its promotion; 2
the menu enticements report displays what customers want on the menu, that to decide whether to launch new product in Costa. Improvement in collection process: Based on the previous analysis, we come to a conclusion that we should increase the amount of respondents to make our questionnaire more objective. At the same time, to build up the questionnaire quality, we should interview some people to know their opinions towards Costa first, and then design our options and questions depended on our analysis.
Section 2 Market environment analysis Macro-environment: According to a report published by Mintel (coffee shops market size and forecast report, 2012), we found that UK is enjoying a mature market economy of coffee shops. In last 5 years, in term of whole sales of coffee shop, the highest rate of increase is 19% while most of them less than 5%. At the same time, found in the reports of coffee shop market share in 2006, 2008, 2010 and 2011 (Mintel 2007,2009,2012), Costa, Starbucks and Nero are the three...