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Marketing, Sales and Negotiation Skills Assignment

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1. Introduction

In any business, customers are considered the most crucial part as the success of a business is dominated by the activities of consumers. A consumer indulges in buying a product only when an individual is aware of the value of the offered product or service. The marketing department is responsible for understanding the needs and wants of the consumers and delivers an effective product that can satisfy a consumer and take the adequate initiative to promote awareness among the public (Erlina and Hermawan, 2021). Apart from these functions, a marketer is also accountable for various sub-functions like personal selling, packaging, transportation and advertising.

Costa Coffee is a British coffeehouse chain headquartered in Dunstable, England. The story of one of the largest coffeehouse chains begun when two Italian brothers, Sergio and Bruno decided to make crafted fine quality coffee in the year 1971, in London (Branco and Kobakova, 2018). This famous company is known for offering uniquely blended crafted coffee and offering special Italian coffee that brought historical success for Costa Coffee all around the world. For achieving this starry success by the company, the product is not the only factor, it is the marketing strategies that enabled the consumers to love and like their products

2. SWOT and PESTLE Analysis of Costa Coffee

2.1 SWOT Analysis

Strength

Weakness

· Second largest Coffee Chain in the World.

· The global chain of the company

· Wide range of quality products.

· The revenue gap between the two giant coffee chain retailers, Costa Coffee and Starbucks.

· Expensive product in comparison to Starbucks

· Weak marketing strategy of the company

Opportunities

Threats

· Expand in other countries of the world.

· Form strategic alliances with other companies.

· Make use of pull strategy

· The increasing price of raw materials

· Unhealthy food and beverage products

· The high price of products

Strengths:

  1. 2nd Largest Coffee Chain in the World: Costa Coffee is a globally recognized brand name and the company has 2420 stores only in the United Kingdom and the total number of stores of the company is 3820 (Lock, 2020). The company is known for its unique taste of coffee and for providing high quality to its consumers.
  2. Global operation: Their unique offering of coffee taste and high quality of the products has helped the company to gain a massive amount of popularity across the globe (Xin et al., 2020). This giant coffee house chain has 3820 stores in 32 countries around the world. Apart from this, the company has 6000 Costa expressing vending facilities and 1280 outlets in various countries across the globe.

Weaknesses:

  1. Huge gap in the industry: The gap between the 1st ranked coffeehouse chain in the beverage industry and the 2nd ranker chain of Coffee retailers is significantly huge (Maamoun, 2020). Starbucks is the largest coffee house chain in the world generating total revenue of 6.7 billion dollars and Costa Coffee is the second largest coffee house chain with a revenue of 1.34 billion British pounds. Therefore, the gap clearly shows the large ground that needs to be covered by Costa Coffee.
  1. Weak Marketing Strategy: This British coffee house chain does not invest much in its advertising and marketing campaign. The coffee shop industry is filled with competitors like soft drinks brands, tea brands. Hence, the company should also give importance to these departments (Nazir, Shafi and Nazir, N.D.).

Opportunities:

  1. Expand in other Countries: The company operatesin 31 countries whereas, Starbucks is present in 70 countries. The expansion of the company is very crucial for grabbing shining opportunities (Maamoun, 2019).
  2. Pull strategy: Starbucks utilize a pull strategy to attract consumers to their coffee shop (EL KEDRA, 2021). Costa coffee should also use pull strategies and other innovative ways to attract the young crowd in the coffee shop.

Threats

High price: Due to the rise of coffee beans and dairy products, coffee is becoming expensive for many consumers around the world(Costa, 2021). Again, Government's intervention in supply chain management has hugely hampered the company.

Competitions: The dominance of Starbucks is undoubtedly a threat to the company (Basamah, 2020). Along with this, many regional factors and players have become a threat to the profitability of the company.

2.2 PESTLE Analysis

Factor

Impact

Political

The business-friendly government allows businesses easily to get licenses.

In this case, the Costa Coffee company enjoys low taxes, smooth supply chain management.

Economic

The growing economy in the developing region has increased the purchasing power of the residents.

People are inclining towards consumption habits that are beneficial for the Costa Coffee

Social

The developing economy is benefitting the Costa company as the rise of income is enabling the middle-class people to go out and eat snacks, coffee, tea and lunch

Consequently, Costa Company is evidencing sales rise in these regions.

Technological

Costa Coffee is utilizing Ceridian’s Dayforce Workforce Management Technology.

The use of technology is helping the organization to plan staff scheduling in terms of delivering accurate and on-time payments to 18000 employees.

Legal

Costa Coffee has been accused of disobeying these laws.

Many employees complained that instead of working 48 hours a week, the company forces their employees to work for 600 hours

Environmental

The company has decided to recycle the takeaways cup

That will prevent the wastage of millions of cups in the landfill.

Discussion:

  1. Political Factors:The chain of the brand Costa Coffee is globally expanded. The effect of the political factors on this company differs from country to country. This giant company operates in 32 countries and the company has to follow certain rules and regulations set by the governments of those specific countries. In those countries where the government is friendly, the operation cost of a business tends to be low and it is easy for businesses to acquire the license. Because of the high population, in China the labour cost is low and therefore the operation cost gets reduced. Consequently, the company maintains the price and attracts more consumers.
  2. Economic Factors:Costa is predominantly located in the developing regions; the steady economic growth is the opening door of opportunity for the company. Because of the growing economy in the developing regions, the purchasing power of the residents is increasing (Semieniuket al., 2021). As the income is increasing, the people are inclining towards consumption habits that are beneficial for Costa Coffee.
  3. Social Factors: Change in social factors can offer opportunity as well as a threat to a company. The developing economy is the driving factor for rising income in these regions. That is benefitting the Costa company as the rise of income is enabling the middle-class people to go out and eat snacks, coffee, tea and lunch. This is providing the opportunity to the company. Due to the excessive consumption of junk food, various health issues are rising. People are becoming more health-conscious and many people are considering coffee negative and have started avoiding having coffee (Prado et al., 2021).
  4. Technological Factors: Costa coffee is investing a huge amount in its HR and payroll process to acquire a competitive advantage in this cutthroat competitive world (Wang, Han and Beynon-Davies, 2019). For planning staff scheduling in terms of delivering accurate and on-time payments of 18000 employees, the company is utilizing Ceridian’s Dayforce Workforce Management Technology.
  5. Legal Factors:There are many laws a company has to follow while operating in a country. One of the important laws that almost all countries order companies to follow is employment law. Costa Coffee has been accused of disobeying these laws. Many employees complained that instead of working 48 hours a week, the company forces their employees to work for 600 hours. Apart from this, the company has also been alleged to charge 200 euro for their training.
  6. Environmental Factors: With the rise of increasing concern about climate change, companies are moving towards providing sustainable products and services (Ferreira, 2018). Concerning this, the company has decided to recycle the takeaways cup for preventing the wastage of millions of cups in the landfill.

3. Analysis of 7P Marketing Mix

Product

· The company offers a variety of products.

· Costa coffee provides a variety of range and flavour in their collection of coffee

Price

· This giant chain of Coffee shop uses diversified pricing strategy

· The company puts the pricing strategy maintaining the excellence of the coffee to encourage consumers to buy their products

Promotion

· Costa coffee advertises using print media and electronic media

· loyalty program offered by the company used as a promotional strategy

Place

· The company is operating in 32 countries and expanded its business in different regions of the world

· The company chooses the most attractive areas like office sites, corporate areas and shopping malls.

People

· The Company has 18412 people working within the company worldwide

· The company has cut 1650 employees during the pandemic.

· company has again started their hiring process to offer equal opportunity for their employee and has shown commitment towards building a diverse workforce

Processes

· The company maintains greetings while interacting with consumers

· Farewell are also given to their consumers

Physical evidence

· The company includes logo, store design, napkin and coffee cup design.

· The store is designed to make the consumer experience better to put the brand at the heart of decisions

Discussion:

  • Product:The quality and taste of the products of Costa have set a standard across the globe. The company offers a variety of products to its consumers but the focusing product of the company is their coffee. Costa coffee provides a variety of ranges and flavours in their collection of coffee. Along with this, their one of the best variations is the combination of different elements and their mixture of elements increase the taste of the coffee that is why the company has lots of variation and attracts many consumers (Maamoun, 2020).
  • Price: Costa coffee company is committed to customer satisfaction and making them trust that luxury can also come at a reasonable cost. The company puts the pricing strategy maintaining the excellence of the coffee to encourage consumers to buy their products. The price of all the products of this premium company is comparatively high but considering their outstanding blended coffee quality and discerning taste, it does not much. This is why the company targets the higher middle class and middle-class companies in their targeted market (Maamoun, 2020). This giant chain of Coffee shops uses a diversified pricing strategy that helps to successfully influence the consumer from different regions of different countries.
  • Promotion:Costa coffee advertises using print media and electronic media etc. Besides this, the company has a strong appearance on social media. Along with this, for promotional purpose, the company use billboard in different occasion and 'word of mouth is also done publicly. Another loyalty program offered by the company used as a promotional strategy is a free sample that club of loyalty program offers a discount on food items.
  • Place: This internationally renowned company has 2121 outlets globally and in London, the company has 1200 outlets. The company is operating in 32 countries and expanded its business in different regions of the world. In terms of place, the company chooses the most attractive areas like office sites, corporate areas and shopping malls. The place selection is also determined by offering comfort and time consumed zone for their potential consumers.
  • People: The Company has 18412 people working within the company worldwide. During the economic crisis due to Corona, the company has cut 1650 employees (BBC, 2020). After this challenging time, the company has again started their hiring process to offer equal opportunity for their employee and has shown commitment towards building a diverse workforce. The company is a consumer-centric company and because of this, they invest significantly in their employee training.
  • Processes: Each Costa Coffee has its function. The company provides special importance on their service as the industry is service-based (Kim et al., 2018). The company maintains greetings while interacting with consumers and place the order and then takes the payment and followed this farewell are also given to their consumers.
  • Physical evidence: In the physical environment, the company includes logo, store design, napkin and coffee cup design. The store is designed to make the consumer experience better to put the brand at the heart of decisions and redesigning to make the consumer understand and appreciate coffee (Xiao Chen, N.D.).

4. Sales and Negotiation Skills of the organization Costa Coffee

In the business environment of Costa Rica, I have got several experiences that helped me to enhance myself. As the company is service-based, the main activity was to communicate with the consumer in relation to sales and negotiation. From welcoming the consumer to taking orders, serving orders, all of it was driven by effective communication. Mostly during conflict management inside the organization, I have learnt the importance of problem-solving and active listening. The famous coffee chain company pays huge attention to the training process of their employee as it has a direct influence on their consumers. During the training process, we have been taught the importance of patience and expectation management that helped us further while negotiating with the suppliers and along with the consumers.

5. Recommendation and Conclusion

Throughout the report, the discussion has been centred on the various aspects related to marketing, sales of the world-famous Costa Coffee Company. The research has firstly used the SWOT analysis tool to address strengths, weaknesses, opportunities and threats of the company and then PETLE analysing tool has been used to understand the external environments of the company. Following this 7P marketing mix is applied to understand various strategies used by the company to achieve organizational goals. Lastly, the report has discussed the negotiation and sales skills of the company.

After a thorough analysis of the company, it can be recommended that the company should majorly focus on their global extension and along with this their advertising and marketing strategies should be evaluated by the company. The company should also focus on broadening their healthy food items to pace with the trend of the community.

References

BBC, 2020 Costa Coffee warns up to 1,650 jobs are at risk, available at: https://www.bbc.co.uk/news/business-54009637 (accessed 24 August, 2021)

Branco, M. and Kobakova, D., 2018. Turning a commodity into an experience: The “sweetest spot” in the coffee shop. Journal of Innovative Marketing14, pp.46-55.

Costa, 2021 Behind the Beans, available at www.costa.co.uk/behind-the-beans/our-story/history (accessed 24 August, 2021)

EL KEDRA, A.N.A., 2021. THE IMPACT OF DIGITAL CONTENT MARKETING ON BRAND AWARENESS THROUGH SOCIAL MEDIA AND CUSTOMER ENGAGEMENT: A CASE STUDY OF STARBUCKS IN ISTANBUL (Doctoral dissertation).

Erlina, E. and Hermawan, D., 2021. Marketing Mix on Customer Loyalty at Coffee Shop in Bandung. Aptisi Transactions on Management (ATM)5(1), pp.89-96.

Ferreira, J., 2018. Fostering sustainable behaviour in retail: Looking beyond the coffee cup. Social Business8(1), pp.21-28.

Han, H., Nguyen, H.N., Song, H., Chua, B.L., Lee, S. and Kim, W., 2018. Drivers of brand loyalty in the chain coffee shop industry. International Journal of Hospitality Management72, pp.86-97.

Lock, S. 2020, Number of Costa coffee shops in the United Kingdom (UK) 2008-2018, available at: https://www.statista.com/statistics/283302/number-of-costa-coffee-stores-in-the-united-kingdom-uk/ (accessed 24 August, 2021)

Maamoun, A., 2019. COFFEE-INFUSED COKE? YES PLEASE!. Global Journal of Business Pedagogy Volume3(3).

Maamoun, A., 2020. Coca-Cola Brews a Hot Acquisition: Costa Coffee. SAGE Publications: SAGE Business Cases Originals.

Mota, J.F., Gonzalez, M.C., Lukaski, H., Oto, G.L., Trottier, C.F., Tibaes, J.R. and Prado, C.M., 2021. The influence of coffee consumption on bioelectrical impedance parameters: a randomized, double-blind, cross-over trial. European Journal of Clinical Nutrition, pp.1-8.

Nazir, S., Shafi, A. and Nazir, N., Strategic Change and Effectiveness of Starbucks Coffee in China.

Putri, A.R.A., Nisa, I.K., Yee, L.H., Kee, D.M.H., Min, K.H., Yi, L.S. and Xin, L.J., 2020. J. CO Coffee & Donuts Marketing Strategy. Asia Pacific Journal of Management and Education (APJME)3(1), pp.72-81.

Semieniuk, G., Taylor, L., Rezai, A. and Foley, D.K., 2021. Plausible energy demand patterns in a growing global economy with climate policy. Nature Climate Change11(4), pp.313-318.

Wang, Y., Han, J.H. and Beynon-Davies, P., 2019. Understanding blockchain technology for future supply chains: a systematic literature review and research agenda. Supply Chain Management: An International Journal.

Windiana, L., Bakhtiar, A., Kurniasih, V.R. and Basamah, S., 2020. The Effect of Green Marketing toward the Consumers Buying Interest of Starbucks Coffee Mediated By Brand Image. HABITAT31(1), pp.36-41.

Xiao Chen, X., CBB coffee shop business plan.

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