In order to maintain the senior manager, the Ashanti Marketing Solutions (AMS) Limited. It has been commissioned in the organization in order to make the new product. Kindly do answer all the learning outcomes mentioned below: -
- What are products or services required in the country and give the macro-environmental analysis (PESTEL) explain all the possible measures and the threat with major possible recommendations.
- Give three modes in market-entry which are suitable for the client. And also recommend one from them.
- What are the major concepts in the market segmentation and targets. Examine all the potential target market.
- What is Porter’s generic strategy, elaborate the strategies that helps out in attaining all the requirements in the factors.
Strategic marketing is the method in which different processes and methods are launched by the company with the purpose of marketing of goods and services. Thus, management can create effective plans and policies so that they can create good product and can deliver superior services to all people. Through the assistance of this, firm can satisfy more people and company can earn more revenues. It can also maintain good image in society. Assignment describes about the Coffee Republic which provide coffee to all people that was established in U.K. Report explains about evaluating the organization current and future internal as well as external environment. It also describes about developing a strategic marketing plan to realize organizational objectives. It also explains about managing resources to deliver the strategic marketing plan.
In this report Coffee Republic provides coffee to all people. In order to expand their business in other region, organisation is planning to enter into new market segment and has decided to launch delicious Pasta. The company chose Germany as the expansion country. The selected country is suitable for the expansion of Coffee Republic as the people of Germany are foodie. Today, People's demand are changing and they want different products from company. So the country is selected against other countries as it is more profitable to launch Pastas in Germany.
Germany has all human and financial resource which is suitable for the coffee shop. So manager have all resources and they can create delicious items and delivers to all people. It is profitable for company to launch delicious Pastas in Germany as compared to other country. As people expects different and unique product from cafe shop hence it decides to launch Pasta in Germany.
1. PESTEL analysis of Coffee Republic cafe shop
PESTEL analysis can be termed as external factors which can affect the country in positive as well as negative manner. Through this, they can easily identify the strengths and can remove the weakness. They can also identify the opportunities and create strategies to reduce threats. Hence, the PESTEL analysis of Germany and its affect on Coffee Republic cafe shop is described below:
Political Factor: These are the rules and legislations of Govt. which can affect the coffee shop. The constitution of Federal Republic is the fundamental structure of Govt. Hence, coffee shop has to follow all rules and legislations is that they can easily operate all activities and tasks in the country. For example, Govt. has created a rule that they had promoted different coffee beans which is used in producing coffee. This results in increasing productivity in Coffee Republic. Due to this, they can operate all activities in proper manner. Hence, they can satisfy all people. So it results in enhancing the profits and market share of cafe shop. In this way, Coffee Republic can easily increase the market share and they can maintain good image in minds of all people. This results in expanding their operation's and activities in many countries.
Economic factors: There are various economic factors which affect the company in positive and negative manner. There are various sources of electricity which are available in Germany. There is use of solar energy and there are many advanced technologies and tools which is used in the country. For example, Germany has many advanced technologies and coffee shop use advanced tool so that they can produce coffee in 2 minutes. This results in reducing the waiting time of all people. In this manner, it directly results in increasing the efficiency of all processes and methods. This helps in enhancing satisfaction level of all users. They can provide different experience to all people. So, Republic Coffee can easily gain more revenues and can increase market share. This helps coffee shop to expand their activities in minimum time.
Social factors: People demand are continuously changing day by day. So Coffee Republic has to create coffee and delivers superior products according to the choices and demands of Germany's people. For example: Germany is a country in which art, music and literature is promoted. Cafe should consider this culture and decides to put attractive images and distinct images related to all culture in their stores. They had also hired musicians which sing the national song of Germany and other good poems and songs. Hence, they promote unique culture in country. This helps in increasing the satisfaction level of people. All existing customers can give reference of their friends and relatives. Thus, they can easily maintain positive image in minds of all users and they can enhance their reputation. In this manner they can easily expand their activities and operations in many countries.
Technological factors: There is use of advanced technologies in Germany which is established in schools and colleges are established for proper education to students. Germany is a advanced country and hence it spend lot of money in research and development. The nation uses various advanced techniques that has enhanced their living standard of country. For example: it can use a machine which delivers different variety of coffee and at same time they can also deliver the snacks such as burger, hot dogs etc. Thus, it reduces the waiting time of all customers. Hence it can capture many people in minimum time. All activities and tasks can be completed in proper time. So it can earn more profits and can easily increase the market share. This also helps the cafe shop to maintain brand loyalty among all customers.
Environmental factors: Govt. has created various rules and legislation regarding protection of the environment. Hence, various rules and regulations for emission of industries and companies has also been complied by Germany Govt. to maintain ecological affairs. They had also ended using of nuclear energy and promoted the use of solar and wind power. Due to this, Coffee Republic can easily make use of solar power and there are rules regarding the emission of the waste. There is proper treatment of waste products and there is no harm to environment. Coffee shop also recycle and reuse the materials and creates all products which can be used by all people. They also creates many plans and policies regarding the treatment of plastic bags as well as banned the use of plastics when they give Hot dogs and burgers to people. This can help in increasing the satisfaction of all people and company can operate all their activities and operations in proper manner.
Legal factors: There are many rules and policies which are created by Govt. Germany invited various countries to for trade with the purpose of generate more profits. This is a positive and motivating factor for the coffee shop. So, Coffee Republic can easily create various plans and policies so that they can perform contract with foreign country. This is a beneficial situation for coffee shop as they can easily expand their operations. This also helps the country in satisfying people and they can easily increase the market share (Hill, 2017). So they can deliver their coffee and other pastas in foreign country and they can attract people of another country also. In this manner, they can easily capture many people and can expand their activities.
2)Modes of market entry and recommendation for Germany
Coffee Republic can select many types of market entry. This includes partnership, strategic alliance, joint ventures, mergers etc. . So it can select any option to easily expand their operations (Johanson and Mattsson, 2015).
Each market is having different risks and this can be managed by their owners. Market entry methods include the equity and non equity. Equity includes the wholly owned subsidies and joint ventures. Non equity includes the export and contractual agreements. Foreign market entry mode in Coffee Republic are described below (Foreign market entry modes, 2018):
Exporting: It is the method in which country can sell products to another country. So Germany can delivers coffee and other pastas products to another country. It is divided into two parts:Direct export: It is the common mode of market entry. It focuses on the economies of scale of home country. There is low involvement of distribution of network or channel in direct exporting. Indirect export: In this method, process and methods are performed by domestic intermediaries. There is no involvement of exporter to sell products in foreign market.
Legal procedure: Each company wants to sell products through exporting method and it is required for organisation to comply certain regulation formed for exporting business. Coffee Republic have to perform all paper work associated with exporting.
Joint venture: It is an agreement between two or more companies as well as people so that they can operate their activities and tasks together by which they can share their loss and benefits. It has to fulfil a particular object or purpose. Their objectives include the rusk and reward management sharing, technology sharing and following the Govt. rules and regulations.
Legal procedure: Partners can provide all important information and data related to the project. There is separate compliance for joint venture and this compliance has to be followed by the every company. They have to explains about the project, and their benefits to the society and their members (Josephson, Johnson and Mariadoss, 2016).
Strategic alliance: It is a cooperative agreement between two firms following are the main features of this method
- This occur between companies located in industrialized nations.
- It put more emphasis on the creating new product instead of giving the existing item.
Legal procedure: Firm has to determine their goals and specialization. They can also express the suitable partner, staff exchange and various operations related which is long term horizon (Miles, M. and et. al., 2015). They also have to perform the paper work and other formalities which is involved in this agreement.
Recommended market entry for Coffee Republic in Germany:
Coffee Republic can select joint venture as they can merge with another company to achieve the objective. They can also share the profits and losses with each other which is positive and motivating factor to select this option. It is convenient and suitable option for the Coffee Republic. The manager do not have to share the losses themselves and the losses will be divided between all parties. They can also expand their activities and operations in proper manner. Hence, they can easily earn more revenues and can also increase the market share.
So, they can easily maintain good relationship with the customers. This is an effective method of increasing the activities in many countries. Coffee Republic is increasing their segment and launches their segment in pastas. So through, joint alliance they can easily reach to many people in minimum time. This helps Coffee Republic in expanding their operations and they can earn more profits as compared to last years. So, this is the reason that Coffee Republic can select this among three options which are available.
3) Market segmentation and targeting and evaluate target market
Market segmentation is the process in which company can divide the whole population on basis of various criteria such as behavioural, geographical etc. Hence, management can divide the whole population into various criteria and can easily create strategies to reach a particular section of population. Coffee Republic can divide the whole population on basis of 4 categories. They are described below:
- Demographic segmentation: It is the process in which population is divided into various criteria such as age, sex, religion, race etc. Hence, the company can easily target to a particular section and can fulfil their needs and requirements. So, Coffee Republic can divide the whole population on the basis of age, sex and religion. This helps Coffee Culture to easily target the population and the results in increasing satisfaction level of all people. Hence cafe shop can earn more revenues (Slade and et, al., 2015).
- Behavioural segmentation: In this step cafe shop can divide the people on variolous criteria such as loyalty, benefits, status and frequency. Hence management can divide the whole population on basis of loyalty, status and frequency etc. So Coffee Republic can easily create strategies and plans to reach target market. All tasks and operations run successfully. In this manner, they can easily increase the revenues and market share.
- Psycho- graphic segmentation: In this method whole population is divided into values, attitude and lifestyle of users so that coffee shop can deliver the products and services. So Coffee Republic has to create plans and policies so that they can easily divide the population on different criteria (Scarborough, 2016). They can provide hot coffee to old people and cold coffee to young people as using adults prefer cold coffee. In this manner they can satisfy all demand and requirements of all people. Hence company can earn more revenues and they can easily increase the market share.
- Geographic segmentation: In this, population is divided on basis of countries, population density and boundaries etc. So, Coffee shop delivers pastas and coffee according to urban and rural people. This help in satisfying the demand and requirements of all people. Hence, firm can gain more revenues. In this manner, they can earn more revenues and can enhance market share.
Geographic segmentation can be carry out by Coffee Republic as with help of this, entity can capture a larger market share and can serve more number of customers. In case of targeting, company can utilise concentrated targeting and youngsters are the most profitable option for entity. With help of various methods and techniques company can attract more number of customers towards its product and service.
4) Porter Generic strategy
Strategy is known as phase of various actions take by a business enterprise to achieve its set goal. It is important for the manager to create effective and efficient policies so that they can manage all operations in proper manner (Tomczak, Reinecke and Kuss, 2018). For this step, company can select Porter's generic strategy and can maintain competitive advantage over other companies. As a result, they can earn more revenues and can expand their operations and activities. According to Porter's generic strategy, any company can increase their efficiency level and they can give strong competition to other companies (Tomczak, Reinecke and Kuss, 2018). Various aspects of Porter's generic strategy used by Coffee Republic are:
- Cost leadership: Under this approach, Coffee Republic can easily reduce the cost of the products and services and hence it can easily provide products to all users. It is the most effective and popular strategy used by all companies. Hence, Coffee Republic can reduce the prices of all pastas and coffee and can target to young people in proper manner. They can easily increase the efficiency in all operations and methods. In this way, they can increase the productivity and all activities run successfully. This can also help the coffee shop to easily reach to many people. Coffee Republic can easily increase their market share and can earn more profits. It brings efficiency in business operations and help in create a good image in market. This can also help Coffee Republic to maintain positive image in minds of all people and in industry. It also helps the cafe to give strong competition to other companies. In this manner, they can become the market leader in the industry.
- Differentiation strategy: According to this strategy, management can sell different products to all users. They also perform research and can make modifications in all products and services. They deliver coffee in different flavour. Through this, they can sell different products to all users. Hence, they can easily operate all activities and tasks in effective manner. This helps Coffee Republic to enhance their revenues and they can also increase the market share. This can help the firm to give strong competition to other companies.
- Cost focus: In this, cafe shop basically focuses on a particular market segment. Hence, they put more focus on the cost and they reduce the cost of coffee and pastas and can easily reach to young people. Hence, firm can earn more revenues and can maintain positive image among all people.
In this strategy, there is also a differentiation focus in which cafe shop can focus on differentiating of all products. They can sell different flavours of coffee and can sell different types of pastas (Vellas, 2016). They sell good quality of coffee and pastas to all people. Hence, they can earn more revenues and can easily expand their operations.
According to this model, management of Coffee Republic can opt the differentiation strategy. With help of this, entity can offer variety of products and services to its customers in different flavours. In this way, company can get all benefits related with expand its activities in new areas and can generate more number of profits. Further, with help of its different products and services company can attract more number of customers (West, Ford and Ibrahim, 2015).
It has been concluded from above report that strategies are important for every company. Through this, any company can easily create many effective strategies and policies. Hence, they can earn more revenues and can also enhance the market share through this. PESTEL analysis is applied to identify the opportunities and threats that are also mentioned related to company. There are numerous mode of market entry i.e. selected by organisation according to their suitable business environment. Market segmentation and its types and target market is essential to focus over certain market Porter's generic strategies are apply by firms to achieve set business objective.