Service analysis (7P’s) and recommendation : Caffe’ Nero
Caffe’ Nero was founded by Gerry ford in 1997 which aiming to be authentically Italian, serving premium espresso-based coffee, fresh high quality food, and a neighborhood gathering spot by the end of 2000, the Nero team had built 31 cafes and established the company as a national brand and received British Design Council award for best company identity (Official Caffe’ Nero website). Caffe’ Nero considered themselves as both a fast moving consumer good (FMCG) or service provider. when marketing 4P’s strategy is enough the marketing mix is used when assessing the tools that can be used to influence buyer decisions(Kotler et al. 2009) When marketing FMCG the first 4P’s: 1.) product which is value or benefit provide to customer. 2.) place which is distribution channel granting accessible to organization including internet, retailer and wholesaler 3.) promotion which is communicating message and value to customer in relevance to benefit and value of using particulars product rather than the feature of product. and 4.) price which factor that costing to consumer and providing income to organization. of the marketing mix is often sufficient to use (Kotler et al. 2009) .
In addition of the service organization, others 3P’s : 1.) people which refers to customers, employees, management and everybody else involved in it 2.) physical evidence which refers to The surrounding in which the service or product is delivered 3.) process which refers to procedure and activities through the entire process of providing service to customer(Zeithaml & Bitner, 2003) are another major part to considered due to 5 characteristics of the service provider and service receiver that are “intangible, inseparable, heterogeneity and perishable”(Zeitham’, Parasuraman, and Berry,1985). Ensuring majority of the consumer satisfaction service provider make use of these three element transferring from intangible service to more imaginable tangible service in addition of increasing in consumer satisfaction will lead to increasing in profit and brand loyalty.
The marketing mix helps companies to develop better strategies, so that then product or service they offer would target their target market accurately.7P’s strategies help service organization to identify, obtain, manage their competitive advantage and unique selling proposition (USP) this attracts the audience’s attention and place them in the right combination of positioning in the consumer mind and organization real positioning. The model of the marketing mix may be implemented to help the individual and the Company how to produce the new offer to the place of the market. It may also be used to examine the current strategy of the marketing (Hamel & Prahalad, 2010)
Overall market analysis: To integrating analysis of the 7P’s marketing mix accurately marketer needs to know the overall situation and behavior of organization. In addition with designing proper 7P’s strategy to meet their target market satisfaction and maintain customer good relation in the right position.
Target market: In the establishing of Caffe’ Nero retail business mostly intention on coffee lovers, tourists and italian food lover unhesitatingly mains target market is switching to middle income, middle age customer group that looking for their Italian style in culinary art, business people and student. Positioning: Caffe’ Nero position themselves as valuable premium grade coffee provider, cheaper price in comparison to their main competitor integral with strong brand positioning as a European-continental-style chain of coffee shops. Furthermore there already expanded to several country in European union creating a enormous opportunity for synchronizing more ingredient, culture, food in order to enhance their the advantage in positioning.
Unique selling proposition (USP): Caffe Nero’s selling strategy importantly stress on its differentiating themselves in a pure Italian theme. Caffe Nero portrays its self from simply a café. evolve to more complicated an ideal mix of a café liquid body substance bar and building. so Caffe Nero isn’t restricted to solely providing an area coffee and snacks. In the other hand customer able to go there simply to get pleasure from a meal with the European vogue decorating environment.
7P’s analysis and Service evaluation
Limitation of analysis : Caffe’ Nero in Bristol city only
1.) Product: As a resulted of there positioning and USP guidance Caffe’ Nero product mainly divided in to two main categories
-Coffee: Caffe’ Nero providing European continental-style coffee offering which is different from the American style of its competitors. They providing high quality range of espresso based coffees with unique Italian style blend (Nero secret blending) made up from specific places beans which is exclusive to Caffè Nero. In addition custom recipe with customer size specification. In comparison with competitor in language of coffee customization Caffe’ Nero has less customization to offer to customer. They focusing on fixed menu and recipe. Customer can choose coffee only from original menu and special sessional promotion menu
-Food: Nero foods inspiration taken from the Italian and Mediterranean menu which required to be simply but tasty, serve with fresh and matched ingredient in addition with healthy eating for help concerning customer. To expose himself into food market Nero face much more competitors in similar product range such as sandwich shop, restaurant they need to remain the inconstantly meaning of delicious to accommodated customer satisfaction.
2.) Pricing : They use Premium valuable pricing strategy combine with odd pricing strategy for coffee. in comparison to the rivals’ products prices small cappuccino in Starbucks is £2, in Costa Coffee £1.79, in Caffè Nero £1.55. Combining with additional discount rate for member. In the other hand they using middle pricing for food product that is set insignificantly higher than convenience store pricing but lower than restaurant pricing to attracts eat-out customer
3.) Place: Caffe’ Nero distributing in 4 branches in bristol city, each of
branch aimed to capture most of population and business district which near to majority of targeted market. These distribution channel is providing easy access and convenience to customer in addition with time saving and cost saving to access. In the other hand they have some benefit gap to utilizing and developing new promotion such as business meeting hours coffee and food delivery that still need to be accomplished.
4.) Promotion: Caffe’ Nero Using strong and intensive promotion campaigns to pull customer into them and creating opportunity to turn them to loyalty consumer. They focusing on their club card which provide point collection every time customer buying from Nero, in addition with Nero special refill mug that is lower price per glass of coffee plus a chance to win a prize after customer refill feedback card. In comparison with competitor Nero have edge advantage when using bundle promotion with their foods. Consequently they is no advertising from Caffe’ nero to create brand awareness and no attractive intention for student.
5.) People: Staff of Caffe’ Nero is well trained with welcome and a positive looking. Company culture try to focus on a passion for making the finest coffee and have fun doing it in professional ways . Caffe’ Nero focusing educating coffee making skill on youth staff who has ambitious to success as well as well trained barista. “They people need to know the brand inside out” spoked by CEO Gerry ford (Official Caffe’ Nero website). They have staff training and monitoring to keep them in track for satisfying customer.
6.) Processing : Consider as a handmade in every glass making coffee, Nero required customer waiting in a peak hours time for coffee (eg. morning, afternoon) due to capacity of staff can’t produce coffee in time, but Nero have a little gimmick between waiting line that let customer select more ready-to-eat product such as sandwich or snack. however in the rush hour Nero need to employ more people to meet customer demand
7.) Physical evidence: They design facilities according to they positioning and USP by using , black color representing EU, larger table compare to normal coffee shop for food, creating Vogue European coffee drinking
experience, staff and utilities always have a brand logo.
7P’s evaluation: From analysis above overall analysis and 7p’s analysis both telling that Caffe’ Nero doing well in term of differentiate themselves from competitor and delivery service, good in positioning and maintain their positioning consequently their USP derivative from product, price, physical evidence and place. They can deliver service and product as long as they have well trained labor but it depend on demand of coffee during days from people, processing and finally they are good at retain and remain existing customer relationship but not good at create awareness or new potential customer from promotion.
-Product: Increase in customization menu by using there differentiation synchronizing more ingredient, culture, food, coffee, tea in order to enhance their the advantage in positioning and customer value.
-Promotion : Caffe’ Nero need to attract more university student and create awareness to them because bristol city tend to be more educational city in the future and the number of student will increase every year. Promotion such as student card discount or free sampling need to applied to create intensive for student.
-Place : They have potential to develop coffee and food delivery through the business area that close to their branch especially in the rush hour time that they employee not enough to meet customer demand, delivery product make demand diversify and create another way of making profit for them.
-Processing: in the peak hour of coffee consummation Caffe’ Nero need to put some interesting thing rather than let consumer waiting only. such as the information about their coffee, coffee blending toys, example of coffee seed, or EU seasonal event decoration
Caffè Nero Group Ltd. official website – www.caffenero.com
Gary H ., Prahald C.K. , (2010) Strategic intent, Harvard business press.
Zeithaml V., and Bitner, M. ,(2003) Service Marketing: Integrating Customer Focus across the Firm, McGraw-Hill,New York
Zeithaml V., Berry L. & Parasuraman A. ,(1988), Communication and control processes in the delivery of service quality, Journal of Marketing, Vol 52, pp 35-48.
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