Canterra Bros Firm’s Vittoria Coffee Marketing Plan

Executive summary

The paper illustrates a marketing plan of Vittoria coffee. The paper entails an analysis of the coffee industry. The objective is to develop a marketing plan that will result in Vittoria coffee attaining a higher competitive advantage. An analysis of the company is considered in the situational analysis. The situational analysis also considers the internal and external environment of the company. The analysis of the firm is conducted through using a SWOT analysis by identifying the strengths, weaknesses, opportunities and threats of Vittoria coffee. An analysis of the target market is also considered to determine the success potential of Vittoria coffee. Through the marketing strategy, various marketing variables are considered to ensure that the product is effectively repositioned in the market. The budget and implementation plan detail the cost and time duration required to reposition the product in the market. Lastly, various evaluation and control procedures are considered.

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Introduction and situational analysis

Canterra Bros is a privately owned firm that is located in Sydney, Australia within the food and beverages industry. The firm was established in 1947 with its founders being Carmelo and Orazio. Initially, the firm was involved with the production of European foods within Australia. As time went by, the management of the firm perceived an opportunity with regard to production of coffee. This resulted in the firm roasting coffee in 1958.The concept behind the firm adopting this concept of roasting coffee was the realization of the great taste of coffee when it is fresh. The firm has been in existence for 50 years and is currently the largest supplier of pure coffee in Australia. The firm has a strong management team that has made it to be the market leader within Australia. It is ranked amongst the best 500 private companies in Australia. The management team is composed of an external board of directors with its Managing Director being Les Schirato.It also has a superior human resource due to integration of a comprehensive recruitment process and employee training program. The firm has established offices in all Australian states and New Zealand. Canterra Bros specializes in the production of diverse brands such as Gelateria ice cream, Vittoria coffee, and Jarlsberg cheese. The firm’s corporate strategy involves building a brand that will result into maximum customer satisfaction.

Internal analysis

In its production of Vittoria coffee, the firm is able to satisfy the coffee needs of its customers both in the national and global market. The firm has experienced a steady growth of 22.8% over the past 3 years. Currently, Vittoria coffee controls approximately 41% of the entire Australian coffee market. The firm has experienced a high growth rate since its inception. This is evident from the enormous growth in the size of the firm’s turnover from $2.5 million during 1980s to $135 million in 2009.

The firm is well positioned within the Australian market which has resulted into the firm attaining a high competitive advantage. This is due to the fact that the management has adopted a strong market communication strategy. The firm’s management has continuously incorporated the ‘expertise strategy’ in the process of producing its coffee products. To effectively penetrate the market, the management has integrated various communication strategies. These include the use of print media, television, radio and involvement in corporate social responsibility through sponsoring social activities (Cammile, 2004).

The management of the firm has also incorporated an effective ethnic marketing strategy. According to Michael, Allywn, Sylvain, Elijah and Valarie (n.d, p.1), ethnic marketing strategy refers to a promotion strategy that considers the entire consumer base within a society that is characterized by ethnic diversity. Through this strategy, the firm is able to target different market segments within the society and hence satisfying them effectively. The strategy has been effective in marketing Vittoria coffee in Australia. This is due to the fact that Australia has a high percentage of citizens with Italian origin. Through ethnic marketing of Vittoria coffee, the firm has been able to make the Italian style be effectively integrated within Australian society. Through ethnic marketing, the firm has been able to integrate Italian heritage within its marketing strategy.

The management has adopted a comprehensive distributional strategy which entails both the direct and indirect distributional strategies. The direct distributional strategy involves the firm distributing Vittoria coffee to the wholesalers and retailers within the domestic market. In relation to indirect distribution, the management has incorporated the use of agents. For instance, within the domestic market, the distribution of Vittoria coffee is undertaken by Richfield Brands & Services Company. Through the use of agents, Vittoria coffee is able to penetrate the entire global market.

External analysis

The Australian coffee market is very lucrative. This is due to the fact that there has been an increase in the number of coffee consumers over the years. This is due to the emergence of coffee culture within Australian consumers. On the other hand, there has been an increase in the number of firms which are venturing the industry due to its lucrative nature. This has resulted to a 28% growth in the roast coffee market sector. According to Oliver (2006, para.3), the lucrative nature of the industry has resulted into emergence of coffee franchising chains in Australia. Examples of such firms within the market include Gloria Jeans. The emergence of the franchise firms have resulted into an increase in coffee consumption within Australia. In addition, the increase in consumption of roast coffee arises from the fact that it is easy to prepare the beverage due to availability of facilities. This is due to the fact that there has been technological advancement in Australia.

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According to a survey by Euro monitor International, it was established that in 2004 , the number of coffee outlets in Australia increased by 25%.In addition, the sales of coffee in these shops increased by approximately 29%. The emergence of coffee culture amongst the consumers in Australia is most common amongst the youth.

According to John (2006, p.2), Australia has experienced steady economic growth over the past few decades. The economic growth has resulted into reduction in the rate of unemployment within Australia. This has resulted into an increase in the country’s Gross Domestic Product. As a result, the consumer’s disposable income increased significantly and hence their rate of consumption. From 1995 to 2005, the consumers’ disposable income has increased by an annual margin of 1.4% to its current level of USD 694. John (2006, p.2) asserts that there has been emergence of a new consumer trend in Australia. This has culminated into a change of consumer demand with regard to retail products. One to the factors that the consumers are considering is the convenience in relation to shopping for consumer products. In addition, there has been an increase in consumer power due to increased awareness. This originates from the fact that there has been emergence of a wide range of communication channels. According to John (2006, p.3), consumers are more concerned with the value of the product they purchase from the retailers.

According to coffee industry in Australia (Anon., 2004, para.1), there has been an increase of 65% in the consumption of coffee in Australia from mid 1990s.In 2005, the total sale of coffee in Australia was $A840.According to the Australian coffee industry (Anon., 2004, Para. 2), there was a 5% growth in coffee consumption during 2008. Coffee (2004, p.4), asserts that the annual sales of instant coffee in Australia is $ 425 million. In the recent past, Vittoria coffee has faced stiff competition from Nescafe coffee. This is evident from the fact that Nescafe instant coffee has a market share of 70% within Australia market in comparison to Vittoria coffee which controls only 41% of the market share. In addition, Vittoria coffee is facing international competition in both the domestic and foreign market. This is evident from the ventures of Starbuck Company and Gloria Jeans Company into Australian market.

SWOT analysis

Strengths Weaknesses Opportunities Threats
Vittoria coffee is recognized in the international market. Through brand recognition, it has become possible for Canterra Bros to market the product in the global market Production of roasted coffee such as vittoria coffee entails intensive labor. The beverage market in relation to coffee is not saturated. This increases the probability of the firm increasing the size of its global market share. Intense competition in the international market from other firms established within the industry such as the Starbuck Company and Gloria Jeans.
The firm is financially stable. This enables the firm to conduct continuous and comprehensive market research. Lack of quality coffee beans necessary for the production of vittoria coffee Higher probability of the firm extending vittoria coffee product line. This will increase its consumption amongst various consumers. Local consumers and tourists are preferring coffee to wine during parties. Increased consumer dynamics. The consumers constantly change their tastes and preferences with regard to consumer goods. This makes the market to be unpredictable. For instance consideration of health issues and cleanliness (Stuart, 2000).
The firm has a superior management team. This enables effective formulation and implementation of marketing strategies that addresses the entire market. The team has also been consistent in improving the marketing strategy. Difficulties in effectively differentiating the quality of the coffee. This limits the competition capacity of vittoria coffee (Tippy, 2009). Emergence of the coffee cafés, growth of restaurants, and super markets. There has been an increase in the number of coffee cafes and supermarkets globally. This presents a new market for Vittoria coffee as more consumers change their attitude with regard to coffee consumption. Increased rivalry within the industry due to an increase in the number of firms venturing the food and beverages industry.
Adoption of an effective distributional channel. High cost of promoting the product in the entire market. The industry is highly fragmented resulting into an increase in the number of substitutes.

Goals and objectives

The management of the firm intends to increase the firm’s level of profitability by a margin of 30% within the next financial year by repositioning the firm’s brand. In addition, the management of the firm also has the objective of increasing the size of Vittoria coffee market share within the domestic and global market to 55%. This will enable it to attain a higher competitive edge thus becoming a global market leader with regard to coffee market.

In line with increasing the size of its market share, the management is also aimed at increasing the level of satisfaction achieved by Vittoria coffee consumers. This is due to the fact that high level of consumer satisfaction will result into a higher competitive advantage and hence an increase in the firm’s market share due to increased sales.

Target market and segmentation

To effectively attain the set goals and objectives, the management of the firm has targeted the entire global market. This is due to the fact that there are different categories of consumers within the market with diverse product requirements. Considering the fact that there is diversity with regard to consumer tastes and preferences, the management of the firm will conduct a comprehensive consumer market research so as to effectively understand their demands.

In consideration of the target market, the management will segment the market using demographic variables such as age (Arthur & Stephanie, 2008). The major target consumers are individuals who are 25 to 45 years of age (Tiffany, 2009). This is due to the fact that they form the largest percentage of the entire global population. In addition, this customer category is more concerned about the health issue with regard to coffee. In supplying the coffee to the market, the firm will also consider the teenage consumers and the kids. This is due to the fact that they form a significant proportion of coffee consumers. To ensure that the consumers are satisfied, the firm will consider improving the quality of the coffee. This is by integration of the concept of specialty drinks. This will enable the firm to control the quality of Vittoria coffee right from the production of coffee beans. For quality of Vittoria coffee to be high relative to consumers, the management of the firm should incorporate an effective blending strategy. The blending strategy should consider a variety of coffee blends from various sources. The production process will also incorporate minimization of the caffeine content within the drink. This will enable the firm to meet the demands of this target market. By meeting the coffee needs of this population, the firm will be able to increase the level of its sales. The management expects that this target market will grow with a margin of 10% annually.

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The firm will also incorporate the consumer’s level of income in segmenting its market. This is due to the fact that there is a wide variation in relation to consumers’ level of income. Consideration of consumers’ level of income will enable the management of the firm to set the price of the product more effectively.

With regard to positioning Vittoria coffee within the market, the management of the firm will consider the product’s market price (Bradley, 2009). Consideration of price will enable the firm to set the market price of Vittoria coffee more effectively. It will also enable the firm to adopt an effective packaging strategy with regard to size of the package. The management of the firm should ensure that the packaging of coffee is in small quantities to enable consumers in low income brackets to purchase the product. Through effective pricing, the Vittoria coffee will be able to penetrate the entire market.

To effectively position the Vittoria coffee with the global market, the management of the firm will consider the quality of the coffee with regard to flavor. This is due to the fact that consumers demand a brand of coffee that is fresh. The management of the firm will ensure that the flavor of Vittoria coffee is consistent.

Marketing strategy

Product

In improving the quality of Vittoria coffee, the management of the firm will also consider increasing the number of product lines. The product lines will be improved by integration of an effective blending strategy. The blending strategy will consider integration of coffee beans from various regions. This will help in meeting the coffee demands of various categories of consumers within the global market

Pricing strategy

In repositioning Vittoria coffee within the market, the management of the firm will readjust its pricing strategy. This is through the consideration of the price sensitive nature of the consumers and their income level. The pricing strategy that the firm will use in pricing its Vittoria coffee blends is value based strategy. This will enable it to set a price that communicates the value that is derived upon consumption of the product. The management of the firm will also set effective price points. Through the price points, the firm will integrate the psychological concept of the consumers. The price point that the firm will set is $15.59 for every 1kg of Vittoria coffee. This price point will result into the consumers perceiving the price set to be fair. Due to improvement in the quality of Vittoria coffee, it is expected that the demand of the coffee will be inelastic. The effect is that the consumers will be willing to purchase the brand at the set price.

Distribution strategy

To effectively penetrate the domestic and foreign markets, the management of the firm will integrate both the direct and indirect distribution strategies. The indirect strategy will involve the use of local and foreign agents. The foreign agents will enable the firm to effectively penetrate the foreign market. This is due to the fact that they have a better understanding of the foreign market distribution channels. The firm will also establish its own distribution depots in various geographical regions within the market. This will help in ensuring efficiency of supplying the product to the entire market.

Promotion strategy

To create awareness in the market, the firm will integrate a comprehensive promotional strategy. Various promotional methods will be integrated. These include advertisements, public relations and sales promotion. The advertisement will integrate various advertising methods such as the use of television, radio and the print media. To reach the global market more cost effectively, the firm will liaise with various search engines such as yahoo and Google. The firm will be posting its adverts on these search engines. The public relation method of promotion will include integration of sponsoring various sporting evident both in the domestic and foreign market.

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Budget

Cost item $ ‘000’
Cost of research and developing the blend 2,000
Cost of market research 1,000
Cost of purchasing current blending equipments 2,000
Cost of promotion 1,500
training program to the marketing staff 1,200
Total 7,700

Implementation plan

Implementation plan

Evaluation and control procedures

In order to determine whether the repositioning strategy is effective, the management will evaluate the performance of the brand with regard to Vittoria coffee sales level. This means that the management will use sales level as a market indictor. In addition, a consumer market research will be integrated as a contingency plan. This will help the management of the firm by sampling the market feed back. The management will use the market feedback to make improvements on the product. This will help the firm in improving the quality of the product thus ensuring continuous customer satisfaction.

Conclusion and recommendation

The management of Canterra Bros incorporation can increase the firms’ level of revenue through effective repositioning of its Vittoria coffee brand in the market. This will enable the brand to compete effectively with other brands in the market. Repositioning of the brand should be aimed at increasing the size of the firm’s market share. For the repositioning strategy to be effective, the management should conduct a comprehensive market research. The research should consider diverse variables such as the consumers and competitors. Consideration of effective market research will enable the repositioning strategy to be effective. This is due to the fact that the management is able to identify the gaps. Value addition is paramount in the process of repositioning Vittoria coffee since it will result into increased customer satisfaction and hence the level of sales.

Reference

Arthur & Stephanie, D. 2008. Writing a convincing business plan. Hauppauge, New York: Baron educational series incorporation. Web.

Bradley, J. 2009. Product positioning strategies. Enzine articles. Web.

Cammile, A. 2004. Bravo Vittoria coffee for ethic marketing. Marketing and advertisement. Web.

Dot. point. 2004. Coffee: the Australian coffee industry. 2009. Web.

John, M. 2006.Australian consumer trends. Journal of business and economics ,vol., 11, issue, 12, pp. 1-10. Sydney: Monish University Publishers. 2009. Web.

Michael, B., Allwyn, C., Sylvain, D., Elijah, G. & Valarie, H.n.d. Ethnic marketing. 2009. Web.

Oliver, H. 2006.Specialist coffee in Australia see enormous expansion. (On-line)Business opportunity research, vol. 12, issue, 4,p1. 2009. Web.

Stuart, D.2000. Coffee: business plan for the NSW coffee growing industry. Journal of marketing, vol. 22, issue, 21, pp. 1-20.New Delhi Rural Industries Research and Development Corporation.

Tippy, P. 2009. What are the weaknesses of coffee industry?(On-line).eHow Incorporation. Web.

Tiffany, G. 2009. What are target markets for coffee industry? (On-line) eHow Incorporation. Web.

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