Question

In this assignment, you will be selecting a product of interest and you will build a sales strategy to improve the sales performance for that product. A product is only one of the four pillars of a marketing strategy, and so you will need to build a thorough understanding of how the price of this product is set, what channels are available for the physical housing and distribution of the product, and how this product will be promoted (commonly referred to as the four “P”s of marketing:  Product, Price, Place and Promotion). This will be the main body of your research, and you will draw on all of these as you perform your analyses and draft your strategy.

You will be given the following scenario: Suppose you are leading a sales team tasked with either building a new market for your product in the location you choose, or for capturing existing market share for that product. The locations and the nuances of your product will largely fall on you as you make your choice, but you will want to keep in mind that the research you are doing will involve the dynamics of the industry, key players and competition, competitive intensity or barriers to entry, the legal environment, as well as geographic constraints. The location is largely up to you: We live in the great State of Maine, so you’re free to build a strategy that you can deploy locally, or you can choose a different state or country if you wish. The only real constraint is you will want to ensure that the product and place you select will make sense conceptually. It would likely be a doomed strategy to market a water-park deep in the Sahara Desert.

Answer 1

Sales strategy

Product: Sales strategy of XYZ coffee

Location : IT business park

Industry Demand Determinants and Profitability Drivers

The demand from the industry for quality coffee and snack goods is motivated mainly by a variety of factors like disposable income, per capita coffee use, health habits, world coffee prices. This industry is highly sensitive to the macroeconomic factors which affect the disposable household growth. The fall in household disposable income due to rising unemployment and low salaries during the recession created downward pressure on the industry's sales and profitability levels during the recession. Another important factor in the study of demand in the industry is the per capita intake of coffee, in which the rise in coffee consumption increases.

Analysis of the Retail Coffee and Snacks Industry

Threat of New Entrants: Moderate

The threat of new entrants to the industry is mild, as the barriers to entry are not strong enough to prevent potential players from entering the market.

The saturation of the market with a monopolistic business system is fairly high.

· The initial cost is not important for potential entrants since they can lease stores, facilities, etc. at a modest investment level.

Small coffee shops will compete with Products likes at a territorial level and there are no switching costs for customers. Even though it is a tough market, the probability of success for new entrants in the industry is moderate

Threat of Substitutes: High

There are lots of fair coffee alternative beverages, usually tea, fruit juices , water, soda, energy drinks etc. The social atmosphere may also be filled by bars and restaurants with non-alcoholic drinks.

Bargaining Power of Buyers: Moderate to Low Pressure

In this sector, there are several different buyers, and no one buyer will claim price reductions.

It sells vertically segregated goods with a large customer base making increasingly low-volume sales, eroding the influence of the purchaser.

But with high supply of replacement products, there are no swapping costs, business pioneers like   prices their product mix in comparison to competing stores with predominant retail price elasticity and competitive premium pricing.

* Customers in premium coffee retailing have a mild bias when they pay a premium for items of good quality but are watchful of extreme premium quality.

Bargaining Power of Suppliers: Low to Moderate Pressure

The key inputs into ' supply chain are coffee beans and premium Arabica coffee grown in selected regions that are normal inputs, making the cost of swapping between suppliers reasonably low

Intensity of Competitive Rivalry: High to Moderate

Consumers still have some expense of moving to other players, which results in high competition strength.

But it is important to remember that   retains a competitive edge by separating its products Of luxury goods and facilities, which are responsible for a reasonable degree of market strength.

Industry Life Cycle and Market Share Concentration

This industry is in a mature stage with a medium level concentration. Dunkin Brands make up more than 60% of the market share, giving them considerable market power in determining industry trends.

Sales Strategy

1. Serve Products of the Highest Quality:
2. Improve Location and Aesthetic appeal of its Stores:
3. Integrated Human Resource Management
4. Develop Goodwill among consumers due to Social Responsibly Initiatives
5. Serve Diverse Product Mix:
6. Improve Use of Technology and Mobile Outlets
7. Indulge Customer base loyalty:

One of the main tactics that have adopted since its inception is the differentiation of products providing differentiators such as quality product mix, places, credibility for coffee drinks and supreme customer care that translated into the development of a highly valued brand that is costly to replicate for competitors.

• Prime and Strategic Locations:
• Global Brand Recognition & Equity
• Aesthetic Appeal and Concepts of its Stores
• Human Resource Management and Company Culture
• Leveraging Technology and Mobile Outlets