Marketing Mix and Branding: Gloria Jeans Coffee - Case Study Example

GLORIA JEANS COFFEE Author Professor University City, State Date Executive summary Gloria Jean Coffee is a premium coffee maker that mainly focuses on franchising their business to the local people in the United States of America. The industry is currently in the target of small market segment majorly targeting young adult who are of age between 16 to 25 years. Table of Contents Executive summary 2 Demographic segmentation 4 Strategies 6 Price segmentation 6 Strategies 7 Recommendations 8 Marketing mix for the demographic segment 8 References 12 Demographic segmentation There are several market segments which form the basis of decision-making in Gloria Jean Coffee industry. The first segment is the demographic segmentation. Gloria Jean mainly targets the young people who are aged between 16 and 25 years. Most young people love coffee for obvious health reasons. The young people are also more knowledgeable towards coffee. They have knowledge of the different tastes from different coffee brands. Secondly, the company majorly focuses on the female customers (Gloria Jean’s Roasting Facilities, 2014). In fact, half the sales come from the female gender. Women love coffee more than their male counterparts. For instance, Australian women have a strong culture of heavily drinking coffee than other countries. The heavy drinking culture has influenced growth in specialist coffee shops, particularly among the women. In addition, coffee drinking has become part and parcel of the modern lifestyle among the women in Australia. Social and culture tend to influence the trend of coffee consumptions (Cleveland, Papadopoulos, & Laroche, 2011). The second segment is the price segment. Price is the amount that consumers must exchange to receive the services and goods offered. The price of a good usually depends on a number of factors both internal and external. This is the reason why there is a constant change of price as a result of the changes in the elements. One major factor in pricing in Gloria Jean Coffee is the decision on the cost of the product, strategy for marketing and the expenses related to activities such as advertisement, distribution or even any other kind of price variation in the market. In the modern era coffee is the second largest traded product in the market across the whole world. For this reason, most customers will prefer to buy different brands of coffee from the closest available supermarket instead of going all the way to Gloria Jean Coffee. There are several behavioral, demographic, geographic and psychographic variables under both the price segment and demographic segments.The demographic segment is paramount to Gloria Jean Coffee. Regarding geographical aspects, the firm has a different franchise in Australia and New Zealand. The firm has set up coffee houses in every Australian states and territory. There has been the development of new markets in addition to the existing markets in order to enhance growth especially across the Southern Asia particularly India. The segment considers the behavior of consumers in terms of price changes (Wedel & Kamakura, 2012). Under price segment, consumers possess different behaviors towards the sensitivity of price (Gloria Jean’s Coffee franchise overview, 2013). Coffee is usually considered a commodity and easily demonstrates price sensitivity at the lower end. It is essential for Gloria Jean Coffee to build its brand around the quality and pricing to increase its customer base and loyalty (Sharma & Lambert, 2013). Moreover, young people do always prefer coffee and will buy at whichever price it is set. Therefore, Gloria Jean Coffee should have strategies in prices such that they entail attempting to offer more compared to competitors. Another major demographic factor under price segmentation is the use of different price brackets in which coffee is manufactured. For example, some coffee brands have low prices while other coffee brands have high prices. Therefore, the segmentation is done on the basis of earnings of the customer base which is part of demography (Regan, 2008). Strategies Market penetration is one of the primary strategies under the demographic segment. The strategy focuses on selling the firm’s existing products or services into the current markets to acquire a higher market share in the industry. The existing market is comprised of young people aged between 16 and 25 years and the female people. To gain a bigger market penetration, Gloria Jean Coffee ought to target all age groups of people and gender. The strategy has a lower risk compared to other strategies hence recommended to the firm (Wilson, 2012). Market penetration involves offering more services to the current customers and the new clients in the similar marketplace. For example, if Gloria Jean Coffee’s current base of consumers aged between sixteen and twenty-five years, then market penetration would involve attempting to offer more of the current goods and services to the similar group (Wilson & Gilligan, 2012). Price segmentation Price Segmentation is critical. The price of the coffee should be such that young people can afford the coffee. In fact, Gloria Jean Coffee majorly targets the young people aged between 16 to 25 years. It is for this reason that the quality and the pricing of the coffee should be well structured to increase the loyalty of the young people towards coffee. Strategies Several strategies are used by the company that are important in terms of the decision making. The first strategy under the price segment is where the firm adopts pricing of its goods and services at a premium. This implies that the firm charges higher prices for goods than its competitors. Gloria Jean Coffee has worked hard to create a value perception so that customers can perceive the products as being worth the higher price tag. The strategy helps the firm to remain competitive as it realizes huge profits from the higher prices they sell their products. Also, a key strategy is the pricing for market penetration. Competitive advantages under the price and demographic segment For the firm to be very competitive under the demographic segment, it needs to utilize the above strategies such as market penetration. Market penetration helps the firm focus on selling the firm’s existing products or services into the current markets to acquire a higher market share in the industry. This implies attempting to target all age groups of people. In addition, the firm should also target the men. This helps the firm to be very competitive in the market. In order for the firm to achieve competitive advantage under the price segment, the firm uses to aim at attracting consumers through offering lower prices on the goods and services. The strategy helps Gloria Jean to remain competitive as it draws attention away from their competition. Over time, the strategy helps drive profits and help the firm to stand out from its rivals. However, to remain more competitive, companies usually end up raising their prices to better reflect their position within the market after sufficiently penetrating the market (Wedel & Kamakura, 2012). Recommendations Gloria Jean Coffee should opt for the demographic segment. Currently, the firm is targeting a small market of people aged between 16 and 25 years. However, the firm should target a larger market comprising of people of all age groups to be competitive. In this regard, the company should widen the target market to cater for corporate business people as well as students. In addition, adopting demographic segment helps in widening the operations through hotels and resorts, college, healthcare and business and industry cafeterias. Moreover, the segment provides kids menu that could be much favorable to those people that usually bring their children together at Gloria Jean Coffee (Simeon, 2015) . Marketing mix for the demographic segment The marketing mix focuses on selling the firm’s existing services and products into the existing markets to acquire a higher market share in the market. Under the demographic segment, all elements of the product are considered that include the quality mix, brand, and packaging and after sales service. The first element of the product is the new product's packaging or dimension. The feature entails repackaging the product in a manner that will attract different customer base from all gender and ages. The repackaging should consider both young and old people to increase the customer base. The repackaging should also target men in addition to the women who are the primary consumers of the coffee. Moreover, a franchised operator in another country let say New Zealand might look at the costs it will involve in the process of changing the package of the goods and services (Gloria Jean’s Roasting Facilities, 2014) . The operator will also consider the new market requirements and the need to alter the marketing messages in regard to the packaging of the products appropriate to the countries demography and culture. Product development is also crucial to the demographic segment. This involves modification of an existing product. Modification of an existing product alters the outlook of the product and improves the performance and quality of the product; coffee in this case (Gloria Jean’s Coffee franchise overview, 2013) . Demographic segment strongly considers the elements of place. A Place can either be distribution channel or distribution intensity that is either a virtual store or physical store. Gloria Jean store embraced a strategy of establishing an outlet in every accessible region where there can be a generation of business. This should be regarded as the most critical factor that should be used in determining the success of a retail chain. Quality services are provided by Gloria Jean Coffee that targets markets with well-located outlets around the world. Furthermore, customers usually look for warm and cozy places for hanging out when discussing their businesses. Students also look for such places to do their assignments or even have fun with their families. Therefore a better environment needs to be provided. Gloria Jean Coffee has succeeded in doing this by providing their customers with comfortable furniture and sofas, warm ambiance with cool music within the region. The company also provides handicap facilities that attracts many consumers (Simeon, 2015). The favorable environment improves the customers’ perception towards the outlet. Most customers love coffee outlets because the place is neutral for individuals to discuss business and do their homework. It is for this reason that the availability of internet connection facilities is very much critical. The internet connection facilities are extremely helpful to students who usually do their assignments and homework at any Gloria Jean Outlet around them. The presence of Wi-Fi facilities is imperative as more students and consumers walk into any Gloria Jean outlet to make use of the WI-FI which would be connected to coffee purchasing in the outlet (Gloria Jean’s Coffee franchise overview, 2013) . Furthermore, the demographic segment adopts promotion as one of the most powerful elements in the marketing mix. Activities related to promotion are important for communication and influencing a target market to utilize the coffee outlets. Promotional activities in most cases are just meant to supplement advertising, publicity, and personal selling. Examples of promotional activities include public relations, exhibitions, demonstrations, publicity and advertisement. People regard advertisement as one of the most powerful examples of promotion (Gloria Jean’s Roasting Facilities, 2014). The primary objective of advertisement is to create and develop the image of coffee and any other services in the market. Gloria Jean advertises their goods and services on media and publication in local newspapers hence attracting and creating more awareness to their consumers (Simeon, 2015). Local and international celebrity endorsement could be very helpful and functional to the firm, therefore, making it known to their fans as their choice of coffee. Endorsements by these local and international celebrities will strategically attract a massive attention from their customers and their enormous fan base across the world, and within the societies and communities, the outlets are established. Another useful means of increasing the awareness towards the brand name is through the social and engineering effort. Incentives such as rewarding their loyal customers with loyalty cards and membership cards could motivate and encourage consumers to stay loyal to the brand. The incentives also encourage the utilization of the coffee outlets. The rewards symbolize how customers are treasured and honored. Discounts, coupons and free refills are also some incentives that encourage those that have not signed up to sign up for these benefits (Sharma & Lambert, 2013). The final consideration under the demographic segment is the element of price. The primary factor in pricing is usually the decision on the cost of the product and more importantly the strategy for marketing. Customers usually possess diverse behaviors towards the price sensitivities. In most cases, at the lower end of the price, people usually consider coffee as a commodity hence easily demonstrating price sensitivities easily. Gloria Jean Coffee could change its prices so as to create a new segment and attract a different customer base in diverse pricing policies (Sharma & Lambert, 2013). The most critical aspect of this model is whether or not existing customers can easily change their buys to benefit from the new market pricing. Furthermore, the firm has had many ways of maximizing sales on its new products. This allows the firm to maximize profits on its sales. Pricing at a premium has also been used by Gloria Jean for a long time now. It involves setting costs higher than the competitors. It hence helps the firm to remain competitive in the market (Chen & Green, 2009) References Chen, H.C. and Green, R.D., 2009. Marketing mix and branding: competitive hypermarket strategies. Cleveland, M., Papadopoulos, N. and Laroche, M., 2011. Identity, demographics, and consumer behaviors: International market segmentation across product categories. International Marketing Review, 28(3), pp.244-266. Franchise Business- Gloria Jean’s Coffee franchise overview.2013. http.//www.franchisebusiness.com.au/articles/Gloria Jean-Coffee-franchise-overview_z62926.htm (accessed May 2015) Gee.D. and M.Gee.2014.Coffee The Australian Way. Gloria Jean’s Gourmet Coffee. 2012. Gloria Jean’s Facility- Gloria Jean’s Roasting Facilities. 2014. http://www.gloriajeanscoffee.com/pages/content.asp?pid=11 (accessed April 21, 2017) Regan, T.L., 2008. Generic entry, price competition, and market segmentation in the prescription drug market. International Journal of Industrial Organization, 26(4), pp.930-948. 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