Just Us Cafe-yash

CASE ANALYSIS ON MARKETING PLANNINGAT JUST US! CAFES

UNDER GUIDANCE OFProfessor Dr. D.D Swain Associate Professor (Marketing) IMI- Bhubaneswar

SUBMITTED BYYashraj Behera PGDM – 2012-14 IMI -Bhubaneswar

Date: 14.10.2012

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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DECLARTATION

I hereby declare that the report titled “Marketing planning at just us! Cafes – A Case Study” submitted to Prof. Dr. Dinadayal Swain International Management Institute, Bhubaneswar, is a record of an original work done by me under his esteemed guidance.

YASHRAJ BEHERA 12PGDM-BHU025

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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CONTENTS

NAME

PAGE NUMBERS

1. INTRODUCTION

4

a. JUST US! CAFES 2. INTERNATIONAL FAIR TRADE

4

3. ABOUT COFFEE

5

4. INTERNATIONALCOFFEE ORGANIZATION

5

a. LATEST MARKET COFFEE TRENDS

5

5. ANALYSIS

6

a. PEST

6

b. PORTERS FIVE FORCES

6

c. BCG MATRIX

7

6. SWOT ANALYSIS

8

7. ISSUES

8

8. STRATEGIC MARKETING PLANNING

9

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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INTRODUCTION JUST US! CAFES Founders- Jeff Moore and Debra Moore USP-100% ORGANIC& FAIR TRADE COFFEE,TEA,CHOCLATE & SUGAR. Just Us!(JU) Coffee Roasters Co-op is a Canadian importer of fair trade coffee, tea, sugar, and chocolate. Based in Grand Pré, Nova Scotia, Just Us! Products are sold throughout Canada, typically in shops specializing in fair trade goods such as Ten Thousand Villages. As well, Just Us! Operates, a network of cafés, in Nova Scotia with locations in Grand Pré, Wolfville, and Halifax. The company was founded in 1996 by Jeff and Debra Moore and 3 friends, after a visit by Jeff Moore to the mountainous coffee-producing regions of Mexico in December 1995. The name was conceived as a pun on the word justice, reflecting the motivations behind the fair trade movement. The business began as a coffee roaster in New Minas. The roaster is now located in Grand-Pre. Fair Trade remains the main focus of the business. Just Us! has extended its product line to include chocolate, teas, and sugar and expanded operations to include affair chocolate factory in Grand Pré, Nova Scotia. FAIR TRADE Fair Trade is a way to gain better market access for small-scale Third World producer ion ships based on respect, empowerment and fairness that offer hope for a better future for these producers, their families and their communities. Conventional or "free" trade has been brutally unfair to Third World producers with the emphasis on minimizing costs and maximizing profits at nearly any price. There is an urgent need to "make trade fair", not just for the well-being of producers, but for the well-being of us all. Internationally, the Fair Trade International certifies producers and also governs national initiatives such as Fair Trade Canada, which in turn licenses and monitors business in Canada involved with Fair Trade.

INTERNATIONAL FAIR TRADE Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries to make better trading conditions and promote sustainability. The movement known as fair trade indicating the certification advocates the payment of a higher price to exporters as well as higher social and environmental standards. It focuses in particular on Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate, flowers, and gold.[2] There are several recognized Fair trade certifiers, including fair trade International (formerly called FLO/Fair trade Labeling Organizations International), IMO and Eco-Social. Additionally, Fair Trade USA, formerly a licensing agency for the Fair trade International label, broke from the system and is implementing its own fair trade labeling scheme, which has resulted in controversy due to its inclusion of independent smallholders (selling via contract production) and estates for all crops

About Coffee Coffee is a brewed beverage with a distinct aroma and flavor prepared from the roasted seeds of the Coffea plant. The beans are found in coffee "cherries", which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia, South Asia and Africa. Green (unroasted) coffee is one of the most traded agricultural commodities in the world. Coffee is slightly acidic (5.0-5.1 pH and can have a stimulating effect on humans because of its caffeine content. It is one of the most-consumed beverages in the world. International Coffee Organization The International Coffee Organization was established in 1963 when the first International Coffee Agreement (ICA) entered into force in 1962 for a period of five years, and it has continued to operate under successive Agreements negotiated since then.

Latest Market Trend of Coffee (World Wide) The ICO composite indicator increased slightly in September, up 1.9% on the previous month. This Performance was driven by Arabica, with all three group indicators registering price increases, while Robusta fell by 1.5%. This led to a widening in the arbitrage between the New York and London futures markets of 9.6%. The average price of the ICO composite indicator for coffee year 2011/12 was 169.82 US cents/lb, which is 17.4% lower than the 205.65 US cents/lb recorded in 2010/11. Volatility for all coffee groups also increased in September. In terms of production, coffee year 2011/12 has now ended, with a total volume estimated at134.3 million bags, effectively unchanged on the previous year. This is because the downturn in production normally associated with the biennial cycle of Arabica production in Brazil has been entirely offset by increased production in other countries. Exports in August 2012 totaled 9.2 million bags, compared to 7.8 million in August 2011. This Brings total exports for the first eleven months of coffee year 2011/12 to 99.6 million bags, a 2.7% increase on 97 million for the same period in 2010/11, and a record level for this time of the year.

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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ANALYSIS PEST Political: As highlighted throughout the case, a huge political factor involved in the industry was the certified recognition of actual fair trade and the whole process. Economic: The economic environment is constantly changing and as we can see from the case, some competitors are providing partially organic ranges as well as mainstream organic coffees. JU pricing is at a slight premium and in the current environment; disposable income of consumers can play a large role in choosing a product. JU must be aware that a consumers feeling toward one product may be influenced by their income, regardless of how strong they feel about fair trade. Social: As mentioned in the case, the overall coffee experience seems to be a large part of the attractiveness of JU and competitor’s. Any future strategy must be designed with this ‘experience’ in mind rather than expanding rapidly and diminishing the experience factor. Technology: Technology is constantly evolving and JU can seize a significant advantage by utilizing technology more. JU needs to examine the improvements technology can make in the manufacturing process and in their advertising.

PORTERS FIVE FORCES ANALYSIS Threat of New Entrants: HIGH -Threat of New Entrants is high within the market as there are very few barriers to entry and fair trade coffee trends are extremely popular so it is an attractive industry. Buyer Power: HIGH -the customer’s income plays a huge role in selecting a product therefore if they decide to bypass fair trade products because of the premium price they can hold allot of buyer power, thus making buyer power in the industry high. Threat of Substitutes: HIGH There is various substitutes for fair trade coffee in the industry such as regular coffee, tea etc but not only coffees but in the general beverages market e.g. Coca Cola, Water etc. As a result of this there is a very high threat of substitutes. Supplier Power: LOW Supplier power is relatively low as the industry is fair trade coffee. From previous knowledge, coffee suppliers were being exploited and continued to produce. It is simply because of the willingness to participate in fair trade that they have gained power. However due to the underdevelopment of the producing countries allot of the power still lies with the buyers. Competitive Rivalry: HIGH Competitive rivalry is relatively high as seen in previous competitor analysis. There are many competitors in the local market and on the shelf within the mainstream markets.

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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BCG Matrix

As JU provide various organic products it is important to examine the more profitable ones and not so profitable in order to either focus marketing effort on weaker products or discontinue them. Stars: Coffee & Tea Dogs: Sugar Cash Cows: Cocoa Coffee and Tea appear to be the largest growers in the trade figures with significant growth rates in volume across both categories over a four year period. Perhaps JU should look at the profitability of the sugar market and consider placing less emphasis on it. Also emphasis has to be made on lunch and bakery segments.

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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SWOT ANALYSIS Strengths: Loyal Customer Base-JU have built up a loyal satisfied customer base and this is a very important asset to the company Customer Engagement: As their stores are quite quirky JU also partakes in a lot of social initiatives and therefore that is one of the core strengths of the brand Multiple Channels; as the company is a wholesaler also they are using multiple channels which increases revenue streams. However this can be a threat also. Strong Brand: JU has reasonably strong brand recognition within the maritime states and this again is a crucial asset to the company’s future strategies. Weaknesses: Shops Concentrated: As mentioned, shops are very concentrated and thus limits consumers reach. Low Marketing Spend: At present there is a very low marketing budget spend and this attitude will prove a weakness if it continues for JU. Opportunities: Nova Scotia Dominance: There is an opportunity for JU within the local market for increased market share as they re one of the leading recognizable brands and have a foothold already. New Fair trade products: With more and more fair trade products becoming readily available a huge opportunity to increase the product portfolio is on the horizon for JU Social Media/Online: The online environment presents JU with a huge opportunity to increase brand awareness, engagement and utilize its loyal customer’s feedback at a very low cost. Threats: High Competition: As mentioned in earlier analysis, there is high competition in the industry and also a high threat of substitutes. Without significant value proposition and differentiation JU could become a victim to substitutes or competitors. ISSUES Increase Marketing Spend Targeting new markets, or new buyers? how can JU improvise the cafes it already owns Product Line and profitability Increase volumes purchased in existing channels

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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Maintain/defend market share or attempt to grow How to counter with other player with same competency (Fair Trade) STRATEGIC MARKETING PLAN There are certain marketing plans that I think, can be undertaken so as to address the above issues. 1. Alliance – either a joint venture or strategic alliance 2. Defending market share in Nova Scotia and improving brand presence and having new products- focusing on core competency. 3. Expanding market by becoming global-Targeting partially developed market. 4. Improvising on the distribution channel. 5. Focusing on the fact that they are the first Fair Trade Players. 6. More stress on individual segments like a. In spring garden they can customize more on lunch items as it a part of maximum revenue. b. More of drinks (flavored) may be served depending on the customer needs for which a consumer taste study may be required. c. Mix of ideas for café at Barrington is required like Bakery and lunches needs to be over hauled, drinks customized, coffee samples can be provided or shop can be made more attractive with attractive offers. 7. Free samples can be distributed to college students, special discounts like couple offer or student discount or lunch offers need to be provided. 8. Popularizing through Internet and targeting more and more educated mass, making them learn how JU is contributing towards people’s development in the procured areas. 9. JU can bring people from the native countries and share their feelings, how JU is helping them(via Free Trade); it will certainly bring a good brand presence and make an emotional attachment with the consumers. 10. Lastly more amounts has to be allocated for advertising for sure as, in this stiff competition, whoever will be able to attract more consumers will survive.

Source- http://www.justuscoffee.com/; http://www.fairtrade.net/; http://www.ico.org/

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