THE COMPANY PROJECT

Costa Cafee in the UK



EXECUTIVE SUMMARY

The paper discusses the marketing aspects of the company named Costa Cafee in UK. The paper explains the history of the company along with the detailed marketing environment. The paper also explores the marketing strategy of the company in segmentation wise and targeting wise. Marketing mix is explained in detail and the paper ends with a recommendation & conclusion section.



TABLE OF CONTENTS

EXECUTIVE SUMMARY2

INTRODUCTION4

THE COMPANY (HISTORY OR BACKGROUND)4

THE MARKET ENVIRONMENT (PEST AND PORTER's 5 FORCES MODEL)5

THE FIVE FORCES FRAMEWORK BY PORTER7

THE COMPETITION9

MARKETING STRATEGY (SEGMENTATION / TARGETING / POSITIONING)9

THE MARKETING MIX (THE IMPLEMENTATION OF 4PS OR 7PS)10

EVALUATION OF THE COMPANY'S STRATEGIES AND TACTICS14

RECOMMENDATIONS FOR FUTURE DEVELOPMENT14

CONCLUSIONS15

REFERENCES16

COSTA CAFEE IN THE UK

INTRODUCTION

For many years, a new concept has been imported from the United States with the out-of-home coffee drinking, also called coffee shops. High street chains such as Costa, Starbucks or Café Nero have done a great deal to educate consumers. This new concept knew a rapid growth and the city of London is the most important coffee shop market with 41.6% of the number of outlets. (Aaker, 2001)

On the basis of this consumer success and with substantial backing, the major chains in the sector are knowing a rapid expansion from a predominantly London base to a wider national coverage.

The successful American and Italian style models of coffee shops of the major chains, such as Starbucks, have inspired many imitations, notably among department stores converting their in-store restaurants to a coffee shop format.

THE COMPANY (HISTORY OR BACKGROUND)

In 1971, Italian brothers Sergio and Bruno Costa started a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. Within a few years they were so famous for combining their roasting business with premium coffee shops, that Costa Coffee quickly became a dominant name on the UK's high streets.

The Costa brothers opened the first Costa store in London in 1978 and growth expanded at the rate of two stores per year with the help of their family and friends in the business.

In October 1995, food and drinks giant Whitbread PLC acquired Costa and immediately established the brand as the market leader in the premium coffee shop sector. Developments such as the new roaster were crucial to Costa. With huge growth over the 1990's the company had increased to 186 stores by 1999 and in 2000, 3.7 million cups of coffee were sold each week

THE MARKET ENVIRONMENT (PEST AND PORTER's 5 FORCES MODEL)

The PEST or PESTEL analysis categorizes environmental influences into six main types: political, economic, social, technological, (environmental and legal) (Johnson & Scholes, 2002).

Political factors

*The European regulation

The new EU regulation regarding product compositions adopted by the European Commission has many consequences on the coffee shop market. This Initiative aims to inform consumers on product contents thanks to the commitment for firms to label their products with their compositions.

*Fair Trade Coffee

The Fair Trade movement also has huge consequences on the coffee market and particularly on the coffee shop market. This movement is growing since the 1990's mainly in ...