Gloria Jean's

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Fundamentals of Marketing Section: - B

Group No: - 5

Names {1} Osama Sohail {2} Somia Ibrahim {3} Arslan Quyyum {4} Raziah Tajammal

Registration No L1F08BBAM2005 L1F08BBAM2039 L1S09BBAM2011 L1F08BBAM0017

Submitted to: -

Sir Agha Mehmood Ali

Assignment No: -

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Assignment’s Topic: Current situation analysis of an organization whose product is a service.

Submitted at: - 12th November 2009

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Topics of Assignment 7 P’s of services: (a) Product (b) Price (c) Placement (d) Promotion (e) People (f) Process (g) Physical Environment/Physical Evidence Differentiation/Positioning Ansoff Matirx BCG Matrix SWOT analysis

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History of Coffee: The history of coffee has been recorded as far back as the ninth century. At first, coffee remained largely confined to Ethiopia, where its native beans were first cultivated by Ethiopian highlanders. However, the Arab world began expanding its trade horizons, and the beans moved into Yemen, where until ca 1700 the major emporium was Mocha, and thence to North Africa and were mass-cultivated. From there, the beans entered the Indian and European markets, and the popularity of the beverage spread.

Origin of the word: The word "coffee" entered English in 1598 via Dutch koffie. This word was created via Turkish kahve, the Turkish pronunciation Arabic qahwa, a truncation of qahhwat al-bun or wine of the bean. One possible origin of the name is the Kingdom of Kaffa in Ethiopia, where the coffee plant originated; its name there is bunn or bunna. From the above paragraphs, a certain truth is revealed that coffee is actually a “drink of the east” not of the west. A certain misconception is found in the subcontinent that coffee is actually a drink originated from the west while the drink was properly brewed and made by the Arab traders and Sufis who usually drank the coffee to stay awake for their night prayers.

Establishment of Gloria Jeans Gloria Jean's Coffees was founded by Gloria Jean Kvetko in 1979 in Chicago, USA. Gloria Jean's Coffees began as a small coffee and gift shop in Chicago USA which now has over 110 locations throughout the U.S. Gloria Jean's Coffees USA is owned by Diedrich Coffee, Inc located in Irvine, California. In early 1998, Gloria Jean's Coffees Australia franchised its first store and within six years had opened 185 stores owned and operated by more than 100 franchisees. In 2003, a franchise opened in Darwin; this meant that the brand was now established in every Australian state and territory. In 2007 Gloria Jeans made its first debut at Defense in Lahore.

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7 Ps of Marketing Product

Price

Placement

Promotion

People

Process

Physical Evidence

Product: From their brand logo “Gloria Jeans Coffee” the only product that comes to mind is a hot cup of coffee brimming with froth. However that is not the case; Gloria Jeans prides itself in not only making a cup of good quality of coffee, with various flavors and “tones”, it also provides cold drinks, tea and bakery food like desserts etc; to not only quench the thirst but also to satisfy the palette of their customers. All of their drinks are pretty popular but only 2 drinks have made it to the top chart of the drinks list. Hot: -Cappuccino Flavored Coffee Cold: -Smoothies and Chillers Gourmet Food: - Cakes, Apple Pies, Sandwiches and other light snacks. There are some products who are not the top but are all time favorites of the customers Christmas Morning Coffee Full roasted blend with undertones sweet. Pumpkin Spice Coffee This fall favorite returns with our signature taste that resembles pumpkin pie in a cup. Butter Toffee Coffee It’s a smooth, creamy taste, with a touch of caramel coffee

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Price: As compared to the prices of other locally owned Cafes` like Freddy’s Café and Coffee, Tea and Company, their prices are reasonable.

Cafes`

Prices

Gloria Jeans Coffee, Tea and Company Freddy’s Cafe

Rs 200-500 Rs 500-999 Rs 500-999

Placement: This place houses not only students who are there to relax after the tedious hours of studying, but also business men of any class; but mostly executive class. Usually the real load comes at night when the day’s work is done and it’s time to hang out. Gloria Jeans has placed its two stores where most people come out and that are Gulberg and Defense in Lahore.

Promotion: Gloria Jeans go for promotion parties, news, internet, radio, billboards. They use magazines as their platform of advertisement. They haven’t opted for television where there are millions of viewers to catch the sight of Gloria Jeans but as their target market is small, that only includes high class, upper lower class and sometimes middle class they cannot afford to spend money in trying to attain the customers that are not in their target. They also give free seminars and lectures to students to make them aware that coffee is as equal a Muslim heritage as tea is. They offer the following deals to attract customers *Books and Coffee - Students Discount 10%. *Ladies Day Out-Discount 15%. *Midnight Extravaganza-1 small free dink after buying regular drink.

People: 6

Background music, people chit chatting combined with the smell and sound of fresh coffee beans being grounded defines Gloria Jean’s visitors. Gloria Jean’s has a mixed clientele of all ages; children come for the delicious desserts and cakes, professionals and busy executives drop in for a cup of coffee before heading back home in the evening and groups of fashionable aunties enjoy their little gossip session in a corner of the café. Students of all ages visit at Gloria Jean's Coffees outlets not just for group discussions, homework or for projects but also to hang out and have fun. Nevertheless, all is good as long as it’s serving its purpose of giving the people some peace of mind and entertainment at the same time. There are no waiters to serve the customers. Customers have to order at the counter and they get their desired food item in five to fifteen minutes. Almost 400 people visit this café everyday and the number increases on special holidays.

Target Segments Age Income Social Class Gender

Characteristics 25-35 and older. Sometimes children. Rs 35000-65000 Students, Business and Working Class Male and Female

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Process: The process of making coffee at the counter is simple but the complexity comes when the coffee has to be imported from the Australian farm itself for Gloria Jeans is a franchise company and according to standard rule the coffee has to be made exactly the same way using exactly the same material and procedure. The coffee beans are bought at good rates from the Rain Forest Alliance farms. The farmers that aren’t paid according to the crop become very poor and thus are not able to produce good quality crop year after year. This alliance was made to support the farmers by paying good and reasonable prices for quality coffee beans. Following are the procedures applied to obtain the coffee beans: - Point to be taken that the coffee is grinded freshly and powdered coffee like Nescafe is not used to maintain quality of the coffee.

Roasting Picking of Coffee Beans

Packaging Drinking

The customer then can order his coffee on the counter and the process only takes 15 minutes for the preparation. This whole process is Self Service, no waiters are appointed for it only the coffee makers are at the counter so that the customer can feel the true taste of coffee just by making his choice on the counter.

Grinding

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Physical Evidence/Environment: The worthy experience begins the moment you step inside Gloria Jean’s Coffee as the strong essence of coffee beans greets you. The whole place is designed in neutral tones, whether it is the wooden flooring, furniture, paint or even the lamps. Tones of brown dominate the area giving the café a casual and warm aura as cafés are meant to be places where you can relax, read a book or just catch up with friends. The light chocolate brown walls matched with the blackboard menus on them complete the café look. Sitting on the beige and brown sofas looking outside the window makes it the perfect nestling spot. A lot of sunshine pours in through the French-inspired windows adding to the friendliness of the place, unlike most dark, mysterious caves “Sheesha” cafés that have sprouted across the city. The ambience seems to cater with the orange sofas adding a splash of color against the warm brick walls; the woodwork gives the place a complete coffee house look. Rest assured you won’t feel uncomfortable while visiting Gloria Jeans. In addition to it, there is a little gossip session in a corner of the café while sipping coffees.

 Differentiation/Positioning: There are two types of coffee beans that are mostly used Robusta and Arabica. The Robusta is used commonly in households and local based Café. Robusta is not of high quality; its taste is not as strong as Arabica. Arabica has a strong taste and a lot of hard work is required to make its yield 2 times in a year while Robusta can produce yields 4-6 times a year. The only reason why Gloria Jeans is highly recommended by its customers is because of the “tones” of the coffee that Gloria Jeans can make. Like tea the tones have a lower, mild and strong taste that can only be produced by Arabica. Gloria Jeans uses this highly expensive Arabica beans to produce high quality coffee. Not to mention they are the only “foreign based” Café found in Pakistan. They do have a competition but only at Gross Competition, meaning with local based Cafés. There is no Net Competition yet because there are no international based Cafes found in Pakistan. Gloria Jeans uses which is a body recharger, and their every product from napkins to plates are from Australia, why to maintain the exact same quality of not only producing Coffee but also serving it in the exact same quality. Other local based café use simply Coffee powder and that doesn’t have the same taste as Coffee which is first freshly grounded then served. The difference here is of quality and positioning is that with that same quality they can serve different flavors of it.

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 Ansoff Matrix: -

According to the current situation, there were already many restaurants besides Cafés that serve coffee, so the entry of Gloria Jeans is no surprise that it actually entered the current market with the current product i.e. coffee thus it is a Market Penetration.

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 BCG Matrix: High

: Growth rate

Coffee

Low High

Market Share

Low

According to BCG matrix, Gloria Jeans is actually in the Cash Cow sector. Gloria Jeans come to Pakistan almost 2 years ago, in 2007 and with a large bang it got its reputation among the elite class of the society as the most excellent Coffee maker. But after its entry, the market share has escalated but the growth is still negligible. It’s because that the class that they have targeted is considered as Niche sector in Pakistan. Also Pakistan is still a Tea lover rather than a Coffee Lover. Besides coffee there are still some beverages that people have considered them as part of their daily lives like Coke, Juices and the like. Leaving them would be like leaving water, in literal sense. The most ridiculous problem that remains is that most people consider Coffee as the “Western Style” and traditional mindset of the people are not yet ready to accept this alien drink; although history speaks for itself that Coffee’s birth was in the Islamic Kingdom in 16th century but most people don’t know. And so Gloria Jeans is still struggling at the growth stage. 11

 SWOT Analysis: 1.Strengths

 Backward Integration  International coffee firm  Comparatively low prices  Pioneers in Pakistan

Strengths

Weaknesses

2.Weakness

 Culture  Low number of franchises  Catering fit into short range of

Opportunity

Threats

group

3.Opportunity

 Growth  Acceptance of the Coffee Culture 4.Threats

 Security  Large number of competitors  Lack of awareness among people  Red Tape

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