1. Situation Analysis
1.1. Industry Analysis
Britain is now a nation of great coffee drinkers. Here, we want to use PESTEL framework to analyze the UK coffee market.
Political Coffee beans are largely grown in developing countries. In order to lower the cost of raw material and thus reduce the production cost, the import countries and the tariffs and tax should be considered.
Economic The coffee industry continues to be one of the most successful in the UK economy although it has experienced a 15-year continuously grow. Costa (1,670 shops), Starbucks (790) and Caffè Nero (560) remain to be the UK’s leading coffee brands with 54% branded market share.
High profits are throughout the coffee industry. At the …show more content…
Generally speaking, the average price for its products is lower than its competitors’. The price for a specific product is determined by the profit margin. With coffee, the margins tend to be low necessitating higher price to be fixed since the consumption per customer ranges at most two cups. The company ensures that it charges fair prices to maintain its customers.
Caffé Nero promotes the products through its official website Caffé nero.com where it shows all kinds of products and the price charged for each one. A CD having samples of music played in the coffee shops are also given to customers as a promotion strategy. The customers can suggest songs that they like most to hear to the music team. While having meals or coffee at the Caffé Nero shops, customers can enjoy free Wifi service which improve their staying experience. This is very attractive to the customers and it is also a marketing promotion strategy for Caffé Nero coffee shop.
1.5.2. SWOT Analysis
Strength • Strong brand name and brand awareness.
• Effective and diverse shop chains and channels since the outlets are throughout the entire countries.
• Excellent food and coffee …show more content…
Additionally, female and family customers are an increasing segment in the market so that attracting more of this segment means increasing sales volume and profit in the future. Furthermore, customers are now changing their drinking habits and needs. They demand healthier ingredients and premium quality products. They also desire the coffee for more energy-give. Young customers also have in-home coffee service needs. Thus, the company should also try to satisfy the customers’ current needs and meet the latest market