Business Management New for University Level

Introduction

Marketing strategies can simply be defined as ways that help businesses to promote their goods and services so that customers can perceive them as the business wants (Marquis & Huston, 2011). . Companies stress their strong points and lift them high for customers to see. They also try to build an image of their goods and services in the minds of their customers in order to improve their sales and win for themselves more potential customers. Marketing strategies are responsible for giving organizations a competitive edge by focusing on the particular niches that other organizations have neglected. These strategies are usually meant for a particular period of time, with most of them lasting from one to about five years. The marketing teams mandated with the responsibility of devising these strategies are force to put many factors in to consideration. These factors usually vary with the nature of the environment the organization operates in. They are what we commonly refer to as the SWOT analysis or the analysis of the organization’s strengths, weaknesses, opportunities and threats. This analysis helps organizations realize areas that they need to handle carefully as well as those they need to take advantage of (Bocij, 2008).     However, the most important thing that the marketing team should keep their minds while trying to formulate these marketing plans and strategies is the organization’s competitors. This team should realize that the actions of the competitors should directly dictate their plans in order to counteract completion and even thrive in it (Drucker, 2001). In the coffee shop industry, we have numerous independent chains of coffee stores like Coffee Aroma, Monmouth Coffee, the Apple Tree and the famous Caffe Nero as well as the Starbucks Coffee Company. This paper looks into the marketing strategies employed by these two famous chains. These strategies are also critically reviewed to show their differences.

Starbucks Coffee Company

Starbucks was established in the United States with the first store being opened in Seattle about thirty years ago. This company has grown over the years and ventured into different countries with three quarters of its outlets being located in Canada, United Kingdom and United States. Current, the company is expanding its operations into Africa beginning with Egypt as well as in Brazil. The fast growth in this organization has always been admired by most companies. Their marketing strategies include firstly, the quality of products. The fineness and quality of the coffee served by the Starbucks coffee shops has always been their top priority. They were the pioneers of selling the famous espresso in the Italian style back at home. This enables them to charge a higher price than their competitors without scaring away customers.

Secondly, Starbucks Coffee Company exercises a unique marketing strategy as compared to their counterparts in the industry (Hoffman, 2008). They try to lure in their customers in their own unique ways avoiding the conventional strategies like huge advertising budgets. They are seen to prefer a one on one promotion technique relying mostly on the word of mouth to sell their brands. Thirdly, this company uses a comfortable environment to encourage people come again. Their outlets play very nice music to relax customers making their stores not only sell coffee but also offer a social environment where people could meet and cool off their stress. They prefer to call their coffee ‘a third place’ which means a third place apart from work and home where people can spend their time. The installation of the free Wi-Fi network connectivity was implemented to enable people surf the internet even as they take their coffee. This move was introduced after they realized the increasing number of people who carry their laptops around as well as other portable gadgets that are Wi-Fi enabled. Their agenda was just to let the customer walk out of the shop more satisfied than they ever been (Zikmund, 2010).

This company also creates a community in social media like websites where people comment on their experiences and encourage those who have not had a similar experience to taste for themselves. Some of these communities include their Facebook and Tweeter fun pages. It is amazing how their funs lure more customers by posting nice photos and video of the stores. The company also tries to be as much innovative as possible. This is evidenced by their frequently changing menus where new drinks and snacks are constantly being introduced just like the current Green Tea Latte. They also keep introducing different and unique flavors in their coffee. Finally, Starbucks also applies brand-marketing technique by trying to always let their products speak for themselves in terms of quality. This has made their products to be famous without putting advertisements on billboards, magazines or other dailies. Their technique involves letting the customer speak out his experience and he will surely bring somebody else with him next time. This has been properly advanced by their social network pages which also act as a direct feedback from their customers.

Caffe Nero Group

Caffe Nero was established in the year 1977 and since then, it has expanded to be the United Kingdom’s largest chain of coffee stores. The company has now over four hundred outlets in the UK only with numerous of them being spread in other countries up to even the Middle East. This company distinguishes itself as an Italian Café and is currently operating under the leadership of Gerry Ford as the Chairman. Moreover, this company focuses on providing coffee in a European style as well as other Italian dishes. They also try to make their environment relaxing but in a purely European way.

This company does not ignore quality either as it has received numerous awards for quality of their products and most importantly their coffee (Jennings, 2006). Their preservative nature of the Italian lifestyle coupled with the quality of their products explains the praise that this coffee house gets. Caffe Nero emphasizes on two strong marketing strategies namely the unique selling point and target market.

The unique selling point strategy by Caffe Nero is brought about by the organizations Italian nature. This theme makes their stores to be more than just coffee shops to their customers. It gives them a sense of identity and belonging especially for people who love the Italian lifestyle. Their diversification to a bar and restaurant offers customers a place to relax and enjoy favorite drinks as well as have full meals. Some of their Italian delicacies include paninis, sandwiches, pasta, Italian wraps and soups.

Caffe Nero also targets a particular market as their marketing strategy. This chain of coffee targets mostly Italian tourist visiting United Kingdom as well as Italian living in the country. These Italian wish from time to time to enjoyed food and drinks in their unique style and Caffe Nero offers them that style. The move to partner with the House of Fraser also proved to be very helpful in directing its customers where they could enjoy their meals and drinks in the style they are used to (Jennings, 2006).

Critical Comparison

This analysis differentiates these two companies from one another. They both have used their own marketing strategies to come out very successful in their business. We realize that though the two companies compete directly in the market Caffe Nero has opted to give customers quality coffee at a relatively low price. This has won the company very many customers, especially these days when everybody cares about the value of their money. Unlike Starbucks, Caffe Nero decided to offer foods in their menu along with other beverages attracting another category of customer who want to eat rather than have coffee. The company’s emphasis on a European style has really been advantageous since the country is in Europe. Although Starbucks’ American origin still attracts its customers, we have to accept that there are more Italians than Americans in UK due to proximity factor (Hoffman, 2008). However, Starbucks seems to enjoy an extensive expertise in the international market given the number of countries they have ventured in. Caffe Nero is not that vibrant and their only international moves reach in Turkey and the Middle East. Starbucks also seems to have invested extensively in the United Kingdom with numerous outlets spread all over London and other towns. Caffe Nero has not yet expanded that much which means that there is plenty of niches that are not yet taken advantage of. This  gives Caffe Nero plenty of room for growth given their unique selling point of pure European style and dishes. This company has a lot of market to take advantage of in London let alone the surrounding cities and countries. Unlike Starbucks which appears to be saturating its market already, Caffe Nero should focus on opening new outlets in order to compete properly with Starbuck as well as the other competitors in the market (Kotler, 2000). Their low prices also give them the ability to sell in even in small towns which might be a bit difficult for their prime competitor.