Marketing Management
Executive Summary
This marketing plan is for Kahawa Classic a new coffee brand being introduced in the United Arab Emirates marketing whose main processing factories will be located in Dubai. Kahawa Classic prides itself with giving consumers a great tasty fresh cup of coffee to the coffee drinker who truly appreciates a good cup of coffee.
Our marketing goal when introducing Kahawa Classic will be to promote both the health and economic benefits of Kahawa Classic over other brands through a variety of advertising, sales promotions, personal selling, public relations and direct communication.
To promote Kahawa Classic, we intend to print brochures with both the health and economic benefits information for the customers to read while in the coffee joints, or leave with them to read at their pleasure. In all the coffee joints or cafes where our product shall be sold, we shall offer Kahawa Classic 15% off the ordinary prices to ensure our customers enjoy the best. The market plan will be launched in other coffee shops after seeing the consumer reaction in our main distributor of our product which we have chosen to be Starbucks due the popularity of the franchise business in the United Arab Emirates and its increasing number of visitors. We plan to understand the consumer reaction by monitoring the sales and product flow in the Starbucks coffee joint.
We project the sales of Kahawa Classic to increase by 20% within the first half year since its introduction to the Dubai market due to the good market conditions existing.
We have firm commitments to distribute quality new beverage drink and we plan to make commitments with independent retailers other than Starbucks to carry out our product distribution. We also plan to distribute our products within a month or two after finalizing all our financial arrangements.
We should be able to tell within the first quarter of the year we shall be in business promoting our product whether it has sparked an interest in the consumers.
Market Review
Overview
According to Euromonitor, (2010), the United Arab Emirates is the fastest growing market for coffee by volume. The sales were projected to grow by “80% from 2009- 2014” (p2). This growth has come despite the strong tea drinking culture in the country , this can be explained by the country’s recent great economic developments, which have opened up several new points of entry for the higher quality coffee brands.
Another major driver of this growth is the trade channel which continues to earn more from the emerging café culture. With the influx of international chains from the market in the 1990s amid emergence of shopping centres in which many cafes are located. The ever increasing United Arab Emirates market has enabled emergence of other local brands and the introduction of the Kahawa Classic is bound to follow in the success steps of the recent introduced brands by supplying it to all coffee joints in the country.
As noted in the Euromonitor (2010) with the UAE housing “the presence of some of the largest international cafés in the world, including Starbucks, Costa Coffee, Coffee Bean & Tea Leaf, Seattle’s Best Coffee, Barista, Hédiard, Café Nero, Café Supreme, Blenz, Second Cup, Segafredo Zanetti, Illy and Lavazza.”, (par 6). We hope by introducing the product in an already established market it shall be a major success.
Market Segmentation
As we target the market, we shall aim at campaigning to the health conscious consumers in the states of the United Arab Emirates. The goal of our promotions will be aimed at the health conscious consumers in the country with our main goal being to educate current coffee drinkers in regards to health benefits of drinking Kahawa classic. Through advertising and providing helpful education tips on the benefits of drinking Kahawa Classic, regular customers will increase their coffee consumption and new customers will come and try Kahawa classic for a great tasting cup of coffee.
We shall therefore divide our market according to the different needs each segment requires. Our concept will be different from mass marketing where products are produced in bulk and they are usually assumed to meet similar consumer needs (Burnet 2008), while the same may be applied to Kahawa Classic due to the same quality in order to ensure everybody in the market gets a chance of enjoying our product, we intend to be considerate of every customer purchasing power thus packaging Kahawa Classic product into different sizes and packets of different colours in order to suit the market mix. Our market segmentation will mainly be based on three variables which are geographical, psychographic, and demographic.
Geographical Segmentation
With our processing factory being located in Dubai, Kahawa Classic will be easily accessible to all the cities and out- of -towners through the improved infrastructure that Dubai enjoys. We shall classify our consumers on the basis of their rural urban preference and design our products according to their different tastes (Kotler, 2007). In order to make sure we increase our market pool.
Demographic Segmentation
The population of the United Arab Emirates can be characterized by a mix of both the old and the young generations. In this category we shall target customers in the basis of their age and gender. Traditionally in the United Arab Emirates men have been the largest consumers of coffee. They would gather in social joints and take coffee as they chat with the main appeal of such shops being social factors.
This popularity is also high among young adults and university students. The fact that Dubai does not have an active nightlife due to religion forces most of the young generation to turn up to coffee joints since they do not have other options and such joints allow the young to socialize among each other as a pub would do in the USA in the introduction phase we shall mainly target the men and the young citizens before we can penetrate further to the women part of the population.
Psychographic Segmentation
According to Kotler (2007), this type of segmentation refers to the use of consumer lifestyles in classifying and trying to meet the consumer needs. With most of the population who are likely to take our product being located in the major towns we intend to build a distribution channel that will ensure everybody gets our quality Kahawa Classic.
Product Review
Summary
Kahawa Classic (Kahawa is a Swahili name for coffee), is the product we will be introducing into the UAE market, we branded our coffee Kahawa due to the source of our raw materials which is East Africa and coffee at that place goes by the name Kahawa. Kahawa Classic will be distributed in different package sizes to ensure it reaches even the very poor in the society. The quality of the Kahawa Classic has been made exceptional as we have used complete dry coffee beans from East Africa, roasted in our modern machines and thus a guaranteed cup of quality coffee.
The coffee comes from the Arabica species, which as you might be aware is rich in flavour and less in caffeine and thus the addiction to caffeine is well checked with our new product. As usual when everyone goes to the market his or her best option would be to buy a 100% pure Arabica coffee; with the Kahawa Classic everything has been catered for and it’s no doubt you will all love our brand, (Holland 2008).
To ensure that our customers gets the best, we have blended our product using Catimor and Chari varieties to spice up our high quality coffee resulting in a well rounded blended coffee flavour profile. The increased use of Catimor will be a major driver of our sales since our customers will derive maximum utility from our quality coffee and at a reasonable introductory price. We therefore recommend Kahawa Classic to cafes, restaurants, and homes for its pleasingly accessible profile and economical price. It will be a great specialty coffee and enough to last everybody.
Distribution
The distribution of Kahawa Classic will mainly be based according to the different segments. To those who have been in learning institutions, coffee has been the best friend for university students; most of the students drink coffee in order to stay awake. Thus, most of our distribution joints of Kahawa Classic will be in the supermarkets and university canteens so that we can reach a bigger market. Our products will also be distributed to the local small shops and repackaged at smaller packet sizes in order to ensure that even the very poor in the United Arab Emirates get that rare chance of enjoying Kahawa Classic.
We shall open big warehouses in the big towns, such as, Dubai to ensure that our supply to the consumer market remain constant. Another potential target market will be the people who do not have time. As the country’s economy continues to prosper, non time consuming products are dominating the market and more customers prefer these types of products. We shall liaise with major coffee joints in the country by supplying our instant coffee products to them.
Features and Benefits
Kahawa Classic has the best aroma and natural flavour. The general importance Kahawa Classic is that it serves as antioxidants, which help your body fight your free radicals. Kahawa Classic has the same antioxidant characteristic as the regular coffee but our coffee is less in caffeine and has high flavours. Kahawa Classic will help in lowering diabetes; reduce the colon cancer, and Parkinson disease, (Early 2008). Another advantage is that it helps you stay awake and with the low caffeine in our brand no side effects are expected whatsoever. We shall also offer Kahawa classic at lower prices compared to other brands so as to ensure it is economic friendly to the majority of citizens in the United Arab Emirates.
Competition Review
There are several coffee brands in the United Arab Emirates that are expected to provide competition to our Kahawa Classic with Nestle being the major rival. Their product is very similar to Kahawa Classic with the same type of quality. Java is another rival in the market and plans are underway on how we shall consumers that our product is better than theirs. There is the unquenchable caffeine indulgence, which shielded the country’s retail sector from the financially economic crisis (Diala 2010). As a matter of fact, coffee franchises and roasted coffee bean suppliers grew in number in 2009.
The US coffee chain joint saw its branches increase opening a total of 17 out of the possible 26 Middle East stores in the United Arab Emirates. As observed by Diala (2010) the country has “seen a strong move away from imported coffees to high quality locally-roasted produce. As we currently import from more than 20 countries, including Yemen and Nepal, we have been able to find a roast to suit most palettes and businesses”, (Par 7). Other major coffee bean roasters for example the Raw Coffee have been cushioned from the economic crisis. Thus as expected, coffee brand makers are doing everything to ensure the quality of coffee in the market remains high.
Besides making sure that our consumers enjoy a hot cup of coffee everyday, we shall expand and liaise with major snacks makers to promote their products as we try to lure the large number of customers who are looking for a hot or a cold breakfast sandwich
Facing competition from all the other coffee roasters, it is understood that it might be hard to penetrate the markets easily and thus we will have to look for the market niche that is looking for a premium product and prepared to pay for it at a cheaper price. With the number of café bars and stores increasing it is expected that with the introduction of our Kahawa Classic in the Dubai market the mushrooming business of café bars and stores will enable the product to be well received and appreciated by the consumers who are used to the other brands. This is in consideration that with the growing competition, the retailers have been kept on their toes in concocting the most imaginative and well appreciated coffee beverages to further boost the sales output.
SWOT Analysis
Strengths
Demand
The demand for coffee shops and better quality products at affordable and competitive market has been rising in the United Arab Emirates and thus our introduction of the Kahawa Classic at high quality and affordable prices will attract a higher market share compared to the other competitors whose coffee products are way above the prices we have set for Kahawa Classic.
Customer base
For any business to succeed when on its initial stages it is always an important factor to consider who the customers for your products will be. Kahawa Classic seeks to meet the demand of the whole population by offering affordable coffee packaged in small sachets with the container size increasing up to a 400 grams container depending on the purchasing power of the customer.
Weaknesses
Stores
The main likely weakness of our Kahawa Classic will be the logistics involved. Since the brand is still on its initial stages into the market, we might not be able to cater for demand if it increases unexpectedly due to the fact that we cannot invest fully in the market before conducting the market trials.
The importance of a market trial is that it will enable us understand who our customers are and what they like about Kahawa Classic as well as understanding those who do not like our products, what they are looking for and how we can improve our Kahawa Classic to make sure even the late adopters of our brand can get to benefit from tour products. This will help us in determining to which extent we can produce Kahawa Classic in our factory.
The fact that we are not nationally known as some of the other competitors, it may act as one of our weaknesses as we try to lure customers into our product.
Opportunities
Demand
The demand for quality coffee products have been increasing in the United Arab Emirates. To increase the demand of our Kahawa Classic, we will have to ensure that our quality remains high and the prices attractive in order to increase our customer base. Introducing Kahawa Classic of different flavours, aromas, and caffeine levels will be another opportunity towards yielding higher sales.
Diverse Target market
The diversity of the market due to the different age groups and the different financial status provides another opportunity for Kahawa Classic to increase its market share within the United Arab Emirates. This can be done mainly by repackaging into smaller affordable sizes and distributing the Kahawa Classic to all shops and coffee joints which are known to attract a big consumer consumption base, such as, the Starbucks Hotels as well as the local shop that may be found n the rural area within the country.
Threats
Trade relations
Of late there has not been smooth relations between Dubai and East African countries particularly Kenya, which is our main source of cheap Arabic coffee and this could limit our main source of raw coffee and thus if we have to look for new coffee suppliers then the price of Kahawa Classic would increase and this would not auger well with our customers.
New coffee brands
Rival companies may tend to copy us and this might force the customers to turn back to them for their favourite cup of coffee. In order to ensure our market share continue increasing, quality improvements in our Kahawa Classic has to remain our main goal.
Health concerns
This could become a threat as consumers concern over coffee consumption and its health effects unfinished researches which seem to contrast one another.
Marketing Objectives
- Increase consumer sales by 10 % through increased consumer awareness campaigns about the economic and health benefits of drinking Kahawa Classic by 10%.
- Increase our profits by 5% within the first six months by targeting and reaching a wider market pool than the other coffee brands already established in the United Arab Emirates.
We hope that all this will be achieved by increasing brand awareness, generating high quality leads for the sales force, improving the morale of the direct sales and increasing the sales by a certain percentage within a specific period (Covello & Hazelgren 2006).
Strategic Proposals
To achieve the stated objectives, the following are some of the considerations we may have to go through when setting up a successful marketing plan for Kahawa Classic.
Assuming that Kahawa Classic will be a strong product in an already established and attractive market we have decided to take up the combination of a cost leadership strategy and a differentiation strategy. While using the cost leadership strategy, we intend to produce and market Kahawa Classic at a lower price than what the competitors are offering. This can be achieved with our superior technology since we can blend our coffee at a large scale thereby achieving economies of scale. The differentiation strategy will include developing and making our customers believe that Kahawa Classic is superior to other coffee brands.
This will be achieved by using the superior technologies at our disposal, attractive packaging, and ensuring that we have a strong distributing network so as to make sure every customer in the United Arab Emirates will have a chance of enjoying our Kahawa Classic. Having defined what our overall objective will be, deciding on operational strategies is another vital thing to decide. These operational strategies will be put under the 4Ps of marketing and they are: pricing, promotion, place, and product.
Product
Product is a bundle of benefits being delivered to meet the needs of our customers, (Tronstad 1995). We shall use the product positioning strategy where we have created a different coffee brand never seen before in the United Arab Emirates by offering a low caffeine content coffee, which has been blended using modern technologies to ensure our customers get the best from Kahawa Classic. We have also designed the packaging of our coffee in a way that our customers will be attracted to them offering them in different packet sizes to ensure every customer can afford.
Price
Price is usually the amount our customers will be willing to pay in order to access our product this value comes along (Ellickson & Misra 2006). In today’s market place, pricing strategy falls under the following categories, everyday low prices, and price quality value and value added. With Kahawa Classic, we are planning to use the every day low prices strategy during our introduction period in order to make sure that we reach more customers thus ensuring that customers afford our while still deriving higher utility compared to other brands in the country. From a broader point of view the market will be divided into three sections; the high class, the middle class, and the lower class.
The high class is not interested on how expensive the product is, but the point of interest is the utility that the product is going to give. When they are buying things they are looking for something extra that can make them feel special and different; the price can be set high since the possibility is that the group will think that the higher the price the higher the utility. The middle class buy the common goods in the market. When they are the target group, the price should be harmonized with the competitor’s prices. If the target is the low class the goods should be available in the local slum and suburb shops and priced lowly.
Place (Distribution)
Place simply refers to the means through which our product will reach the consumer. To ensure that Kahawa Classic reaches our customers on time it will be very important to establish a distribution network that ensures that our product is at the right place and at the right time. Efficient and effective distribution is important. There exist two distribution channels through which goods can be distributed: the direct distribution and the indirect distribution.
For our case, to ensure that Kahawa Classic is well distributed and reaches our customers on time, we shall use the direct distribution model which shall involve distributing our products to every shop, restaurant and cafés within the United Arab Emirates to ensure everybody gets a taste of Kahawa Classic. Channels are both distributional channels and raw material supply chains. The company ensures at any one point it has all the resources required to remain competitive. Goods must be delivered where they are required in the right time. This will ensure that there are quality products,
Promotion
Promotion entails all the tools we shall use in order to communicate with our customers. They include advertising, sales promotions, direct marketing and public relations among others. In all these there exist two promotion strategies: the pull or the push strategy, (Nitschke, ND). For Kahawa Classic we shall use the pull strategy where our aim will be to promote our product by using a promotion mix of sales promotions, product benefits method of promotion and direct marketing. This is aimed at helping us understand what the customer is looking when buying our product and thus work towards improving the consumer desired quality.
Market Research Design
The market research will mainly focus on primary data which shall be got after conduction interviews through structured and non structured interviews. The sample will be approximately of about 600 consumers in the major towns of the United Arab Emirates. The structured interview will entail answering questions from the questionnaire done by answering the questions of questionnaire while the non structured will be based on understanding the consumer position about Kahawa Classic. This data shall then be fed to a statistical package for example the SPSS and then check how significant or how successful our introduction of Kahawa Classic into the market will be.
The secondary data shall mainly be collected from the journals, books, magazines and Electronic books in the internet. After conducting the tests we shall then assess the significance of the survey and then assess the profitability of introducing Kahawa Classic in the market.
Implementation
If from the analysis we feel that introduction of Kahawa Classic will be profitable, we shall introduce the product in two phases: Phase one will entail introducing the Kahawa Classic brand in the major towns in the United Arab Emirates. To ensure that our product attracts customers we shall liaise with major coffee joints and shops, such as, the Starbucks. Provide it at a cheaper price so that its introductory price will be cheaper than the other brands in order to ensure that it can fetch customers faster. In these major coffee joints we shall also advertise our products by using big wall posters so that any time customers visit these joints, they can see the new product on display.
In order to increase the market share phase II will entail widening our distribution channels, repackage the coffee into small packets that are price friendly and distribute them in all the supermarkets and shops with in the country. We shall also hold country wide campaigns for brand awareness and give our customers free samples to go and try for themselves how classic our Kahawa Classic really is.
Evaluation
After conducting a performance analysis, based on the sales we will have made, we shall discuss the viability of introducing the product in the United Arab Emirates fully by assessing the profitability through the projected sales.
Conclusion
After evaluation, if we find that our Kahawa Classic was well received by the people of the United Arab Emirates and there is a possibility of gaining profits, we shall move on and introduce the product fully into the market.
References List
Burnet, J., 2008. Core Concepts of Marketing. Zurich, Jacobs Foundation.
Covello, J., & Hazelgren, B. J., 2006. The Complete Book of Business Plans. London, Sourcebooks, Inc.
Diala, C. E., 2010. Coffee Industry Brews A Cup Of Success. Web.
Early, S., 2008. Health Benefits Of Coffee Justify Daily Java, So For Goodness Sake, Switch The Coffee Pot On! Web.
Euromonitor International, 2010. UAE Is Fastest Growing Market For Coffee In The World On Changing Consumer Tastes. Web.
Ellickson, P. B., & Misra, S., 2006. Supermarket Pricing Strategies. Web.
Holland, J. S., 2008. Arabica vs. Robusta: No Contest. Web.
Kotler, P., 2007. Marketing Management, 12th Edition. London, Prentice Hall Publishers
Nitischke, R., Not Dated. The 5Ps of marketing: Arago Partners LLC. Web.
Tronstad, R., 1995. Product Position. Web.