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The Coffee Consultants: Needs Presentation. Alessandro Galeone Lindsey MacLaughlin Mark Muller Matthew Osborne Tanyaradzwa Mtetwa. Agenda. Introduction Objectives Methods Findings & Recommendations Rebranding Location Analysis Advertising & Promotion Pricing, Margins & Wastage

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the coffee consultants needs presentation

The Coffee Consultants: Needs Presentation

Alessandro Galeone

Lindsey MacLaughlin

Mark Muller

Matthew Osborne

Tanyaradzwa Mtetwa

agenda
Agenda
  • Introduction
    • Objectives
    • Methods
  • Findings & Recommendations
    • Rebranding
    • Location Analysis
    • Advertising & Promotion
    • Pricing, Margins & Wastage
  • Conclusion
introduction
Introduction
  • Our Goal: To help Needs Convenience develop strategies to help increase awareness and perception of their premium coffee and to help boost coffee sales
  • Key Factors: Promotional tools, pricing strategies and advertising techniques were the focus of much of our research
objectives
Objectives
  • Increase Awareness & Perception
    • 36.5% of survey respondents aware of Need’s coffee but many did not associate with the Java Station
    • General negative perception of convenience store coffee (old, inconsistent taste, poor quality, etc.)
  • Increase Coffee Sales
    • Negative correlation between proximity of competition and Needs coffee sales
    • Positive correlation between coffee sales and adjoining Fast Fuel locations
objectives1
Objectives
  • Improve Advertising Effectiveness
    • In store coffee advertisements blend into other advertised products causing customers to miss them
    • Opportunity for Needs to differentiate from other convenience stores; currently advertising like other convenience stores
  • Optimize Pricing Strategy
    • Needs currently has competitive pricing at second lowest in the Antigonish market
methods
Methods
  • Coffee Observations
    • Observed competitors in Antigonish and New Glasgow, counted the number of consumers that bought coffee in peak hours (7-9 a.m.)
  • General Coffee & Needs Surveys
    • Interview locations at Sobeys and Needs in Antigonish, and at Sobeys in Stellarton
methods1
Methods
  • Taste Test
    • Consumers rated Needs coffee on a scale of 1-10 to determine actual opinion of quality
    • Consumers were chosen throughout the Antigonish population
  • Store Location Analysis
    • Used Google Maps to find factors that contributed to individual stores’ high and low coffee sales such as proximity of competition, attachment to a Fast Fuel and geographic location
rebranding findings
Rebranding: Findings
  • Important to Customers
    • Importance to buying decision rating- 3.8/5
    • 43% of survey respondents rated branding 5/5
    • Another 24% rated branding 4/5
  • Strong Brands lead to Strong Sales
    • Tim Horton’s 60% of surveyed industry sales
    • McDonalds 34% of surveyed industry sales
    • Increased brand image/awareness leads to higher sales + market share
  • Low Brand Awareness
    • 40% of surveyed respondents aware of mother parkers coffee
    • 25% of surveyed respondents aware of the Java Station
    • 36% of surveyed respondents aware Needs sells premium coffee
rebranding recommendations
Rebranding: Recommendations
  • Re-name Java Station
    • Low correlation to Needs
    • Low brand awareness/image
    • “Need’s Coffee”
  • Build Customer Loyalty
    • Loyalty program to increase consumer re-purchase
    • Can lead to larger customer base and higher brand image/awareness
  • New Brand Focused Marketing Efforts
    • Current efforts too spread out
    • Increase brand awareness through reinforcement
    • Premium image, premium quality differentiation
    • Focus on brand, not distributor
store location coffee sales
Store Location & Coffee Sales
  • Top locations have little or no nearby competition
  • Locations with a neighboring secondary competitor will have low coffee sales
  • Needs is forced to compete with secondary competitors such as Tim Hortons
advertising promotion
Advertising & Promotion
  • Expanding Interior Store Signage
    • Promote upcoming events
    • Adds aesthetic quality in store
    • Examples include banners, window graphics and LED displays
  • Expanding Exterior Store Signage
    • Increases store traffic
    • 24/7 advertising with one-time cost
    • Boosts store sales
    • Flexible messaging
    • Creates impulse sales
advertising promotion1
Advertising & Promotion
  • For a wider reach initiate advertising strategy in partnership with Sobeys
    • Increased brand awareness
    • Larger advertising platform
    • Examples include special events, samples, coupons at Sobeys locations
pricing margins wastage
Pricing, Margins & Wastage
  • Competitively priced
    • 23% below average medium, 3% below average large & 8% above average for extra-large
    • A&Ws $0.75 coffee of any size leads the way
    • The rest of the competition have roughly the same prices
  • High Margins
    • The coffee industry in general has some of the highest margins out there
    • Needs’ average margin is about 78%
    • Not much opportunity to increase margins
pricing margins wastage1
Pricing, Margins & Wastage
  • Overall Performance
    • According to internal data annual coffee revenues are $1 432 500
    • With 78% margin that gives a COGS of $310 300
    • Residual income is then $1 122 200
    • Wastage at $1500 per day saps $547 500 from this total annually; that’s 38.2% of residual income
pricing margins wastage2
Pricing, Margins & Wastage
  • Wastage
    • Represents a key opportunity to increase coffee program profitability
    • Approximately 100 locations average under 10 cups sold per day
    • Introduce single brew Tassimo or Keurig machine in these locations
    • Effectively reduce wastage costs
    • Use Sobeys relationship to acquire machines and pods at lower cost
    • No major change to margins
    • Many brands make these “pods”
conclusion
Conclusion
  • Rebranding
  • Advertising: Exterior Signage
  • Promotion: Free Coffee Giveaways
  • Partnership with Sobeys
  • Single Brew Coffee System