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I understand that only the content in the main body of my work will be marked, and hat the content in the Appendices will be checked, but will not contribute to the marking of my assignment. Task One Unexpressed buoyant growth and impressive results (Anderson,2012), clearly display its product as highly desirable in the coffee industry (Ernst et al,2010), which, impression-focused trends within society Bennie et al,201 1).
However, recent loss of market share and the ubiquity of Enshrines in the mass- market, which conflicts with it’s concept of best-in-class service, best quality and premium brand identity, suggests that issues are prevalent within the company’s racketing strategy (Abracadabra,2010).
Unexpressed critical marketing issue is that its product innovations no longer offer necessary opportunities for differentiation, which has arguably lead to increasing competition and the questioning of Unexpressed capability in exceeding its competitors. The issue has materialized through a rapidly growing market segment (Appendix I), which has attracted competitors, particularly due to the low entry barriers (Porter, 2008), and the new understanding of the company’s non-entitlement to patent rights on their capsules.
This intense competition from substitute capsules, sees reasoning behind the most critical strategic marketing issue as Unexpressed products are inherently similar to those of competitors and are correspondingly up to ‘50% cheaper than Unexpressed own capsules’ (Anderson,2012,pop), meaning that the company not only no longer possesses a differentiation advantage, but direct competitors may prevail from a cost advantage (Hill, 1988).
More specifically, offerings from competitors such as the Ethical Coffee Company are meeting market demand of its targeted ‘coffee connoisseur’ customers by adhering towards recent trends of an ‘authentic, more environmentally-friendly, coffee ultra’ (Anderson,2012,pop).
Mattson(2008) suggests that a maintainable marketing strategy is based upon delivering and integrating true value at a strategic level, as opposed to the selling of an artificial image, which Enshrines has arguably been culpable (Anderson,2012,pi), through its arguable ‘greenmailing of its recycling efforts (Peterson,2013). This absence of assessing changing customer needs, new customer targets and exploiting new production technologies, whilst direct competitors are doing so, indicates a lack of spurred innovation (Holey et al,2008,p. 72). The highlighted insufficiency in product innovations, suggests that Enshrines currently lacks the attributes to outperform its competitors in the future and benefit from sustainable competitive advantage (Anderson,2012), which is key to a company’s long-term organizational success (Drummond et al,2008). Furthermore, the issue is particularly prevalent as Unexpressed revenue logic appears to be built around the razor-blade model (Gobble,2014), whereby profit is solely made from capsule sales and not from the machines.
This is the company’s most critical strategic marketing sue as it can easily change the nature of market exchanges and Unexpressed effectiveness in the quickly growing premium single serve industry (Anderson,2012), which would arguably negatively effect Unexpressed value creation, which is essential requirement of sustainable strategic management (Holey et al,2008) and may inhibit the company’s ability to Value capture’ and sustain profitability.
Enshrines must implement a marketing strategy that coherently reinforces its socio environmental and financial resources, in order to strengthen its brand value and develop its competitiveness within the increasingly symbolic based competition caravan,2013). Enshrines is currently limited to the espresso segment of the premium single serve capsule market.
Given the intense competition, fight for market share and difficulties in ensuring the sustainability of competitive advantage from increased product innovations, combined with the company’s innovative and premium strategic intent, its branded and sophisticated offerings, visionary leadership styles and a speedy a risk taking organizational culture (Anderson,2012), it is suggested that a differentiation approach (Hill,1988) is used in the formulation of a deliberate racketing strategy (Kipping and Calumet,2010), in order to maintain the perception these attributes in the consumers mind, thus adding value to the product and bran Additionally, Enshrines arguably possesses an intrinsically superior product by WA of its innovative stance, therefore, it is advised that a differentiation strategy may enable Enshrines to ‘maintain its intrinsic differences (quality, premium stance and service) in the face of competitor imitation’ (Murray,1998,IPPP). Kettle and Sings(1981 ,cited Holey et al,2008) argue that successes in competitive marketing treated are mainly reliant upon a combination of defensive and attacking actions, s to build a sustainable advantage in the marketplace.
Consequently, it is proposed that Enshrines maintain its current espresso capsule activities, with its usual continuous innovation, whilst simultaneously embarking upon a ‘Bypass Strategy, whereby Enshrines should use its capabilities as pioneers of the single serve coffee capsule market (Anderson,2012) and its inherent innovative capabilities to avoid competitors by altering the marketplace (Holey et al,2008,p. 322). With industry reports suggesting that the single serve coffee market is growing, wit Remuneration,2014), and the admission that espresso pod coffee is becoming ‘mainstream’ (Sassier-Alexander,2013), it is suggested that Enshrines creates a new segment within the industry to target to the large tall’ coffee at home segment.
Due to Unexpressed strong brand identity, premium-quality and luxury services, it is suggested that its competitor positioning is maintained in the new market at a high pressure (quality) and high price to ensure that its intended strategy is properly aligned with its positioning (Drummond et al,2008). Related, the target consumers will be largely unchanged as ‘real coffee connoisseurs’ are demanding more biophysicist, innovative coffee products (Anderson,2012) and are becoming less price sensitive to ‘at home coffee purchases’. The four parameters of strategic marketing can be used to covey the ways in which the marketing strategy could be implemented. The product (and arguably service) offering, should firstly be differentiated (Holey et al,2008), to develop a new machine, that is capable of making large tall’ coffees which should be outsourced to a prestigious company, as before, as Enshrines does not have competencies in this area.
The core capsule product should then be altered to fit the new machine, that offers a range of customizable tall’ coffees, according to the customers individual preferences, which is imperative with the driving force of today’s marketplace being individualizing (Ban and Marshall,2013). It is suggested that Enshrines still source its products from its AAA Sustainable Quality Program, to enhance its Corporate Social Responsibility initiatives and utilize its unique high pressure system, which are important elements to the target consumers and differentiate Enshrines from other market players Deviations in the product logic can be used to solve the critical issue of insufficient product innovation and resultant intense competition, as the product can attain a newfangled lease of life beyond the current product life cycle, from its ‘breakaway positioning (Moon,2005).
Enshrines is still suggested to use its razor blade model, with revenue primarily being made through capsule sales at high gross margins. Thus, a super-premium pricing strategy (Holey et al,2008), is suggested, that is slightly higher than Enshrines espresso capsules, to ensure consistency with the brand image, product line and positioning and to reinstate Enshrines as a differentiated and innovative brand in the consumers mind, thus giving added value (Hindquarter and Liz, 104). Unexpressed current innovative distribution logics are unique to the marketplace, being focused on direct channel structure, the internet and digitization in the distribution system (Anderson,2012).
With upward trends towards individualizing, convenience and e-commerce purchasing (Ban and Marshall,2013), it is suggested that Enshrines maintain its unique and ‘exclusive’ distribution system, as these arguably are a source of competitive advantage and customer value, despite being costly. Furthermore, promotional efforts surround exclusive clubs and aspiration branding. It is suggested that Enshrines maintain these avenues, but newly engages online loyalty scheme, whereby social benefits such as invitations to exclusive events are given, which will align with the aspiration wants of Unexpressed target demographics and possibly lead to customer retention and increased spending (Weeklies et al,2014).
The suggested marketing strategy will address the aforementioned insufficient product innovation and the resultant intense competition from substitutes, as the strategy builds upon differentiated, sustained positioning that meets the long-term rends in the market and recessives its customers needs, thus giving Enshrines a strong platform for which its value creation can be utilized from a unique emotion- driven added value (Betterment et al,2014). Driven by internal consistencies and intrinsic innovation, it is suggested that this strategy is difficult for competitors to imitate (Lee and Chou,2012). Furthermore, by focusing on the utilization of the company’s core resources and capabilities, the competitive advantage derived from the intended strategy is suggested to be sustainable (Wilson and Gilligan,2005) and aligned with the company’s intended marketing activities and customer perceptions.
Task Three In spite of the proposed intended marketing strategy arguably being sustainable and appropriately aligned to the current external environment, it is important to devise a contingency marketing strategy, to accommodate unexpected events or conditions, so to minimize any negative effects (Ginsberg and Pentagram,1985). This is of particular importance due to the increasingly changing and customer-orientated global marketplace, whereby the adaptation of strategy is a key success factor (Hoc and Quant,2010). The coffee industry is rapidly evolving and especially subject to global engagements (Sassier-Alexander,2013) within its external environment.
It is important for Enshrines to anticipate these trends, as they can hugely affect the necessary nature of innovation taken, demand levels and consumer perceptions, which are all critical aspects of successful sustainable competitive advantage and the dealing with of the aforementioned critical issues, particularly intense competition (Wilson and Gilligan,2005). Through external analysis of the marketing environment, the global engagement of increasing environmentalism can be observed. The PESTLE analysis (Holey et al, 2008) has highlighted environmental factors, such as the need for reusable and recyclable products, water-saving technologies and energy saving in distribution systems.
This is similarly expressed within coloratura trends towards fair-trade, artisans products and the transparency of environmental efforts (Stratton and Werner ,2013). In spite of Unexpressed attempted ecological and fair-trade initiatives, Nestle has ‘attracted increasing criticism from environmentalists’ (Anderson, 2012,pop), with claims not matching their actual activities, thus widening the customer satisfaction gap (Paranormal, 1985, cited: Holey et al, 2008). If trends towards these initiatives were to increase as predicted, with coffee already being the (1998) suggest that Unexpressed performance may fall below the customer’s ‘zone of tolerance’, resulting in dissatisfaction and a lowered added value.
Competitor analysis also showed the Ethical Coffee Company’s, wholly biodegradable offerings, made the industry rivalry extremely intense due to the serving of a product innovation that satisfied a common need of Unexpressed target consumers. It can therefore be realized that the behavior of consumers and producers through the alee chain is rapidly changing, thus, it is imperative that Enshrines recognizes the interconnectedness of environmental, social and economic scopes of sustainability (Peterson, 2013). The contingency marketing strategy suggested for Enshrines in the face of increased global trends towards the aforementioned aspects of sustainability, is a sustainability marketing strategy (Lee and Edwards, 2013), characterized by long-term ethics of sustainability being integrated into the broadening shareholder circle.
Despite various academics suggesting that sustainability micromanaging is incompatible tit the dominant social paradigm (Mediaevalist, 2014), the attitudes of Unexpressed target consumers are likely to be in favor of the sustainability engagement (Stratton and Werner ,2013). The suggested contingency marketing plan will maintain the pricing strategies and revenue logics, with the distribution systems also being continued in the same fashion. Conversely, the core product will be changed to include 100% of the coffee to be sourced through its AAA Sustainable Quality Program and the actual capsule to be wholly biodegradable. Amendments in the promotional logic of Unexpressed strategy ill involve the incorporation of the story of the Journey of the company’s sustainable coffee production from producer to capsule.
Additionally, it is suggested that the loyalty scheme from the initial strategy will be changed to offer the reward of donations to impoverished coffee growing communities from increased consumer spending, which is particularly focal given recent increases in charitable donations, predominantly when the donation has a connected responsibility with the event (Easier et al,2014), as with the consumption of coffee. If the external environment were to experience the aforementioned changes, it is vomited that the contingency marketing strategy would holistically communicate sustainability as an integral aspect of the customers previously highlighted multifaceted value perception, by allowing the customer to shape Unexpressed strategic response to sustainability, thus allowing a strategic fit (Holey et al,2008). Furthermore, the alignment of strategy with the shift in cultural-norms and the partnering with stakeholders, will develop a more sustainability based organizational mindset.