Marketing mix of Costa Coffee (7Ps of Costa Coffee)
This is a detailed assessment of the marketing mix of Costa Coffee (7Ps of Costa Coffee). Costa Coffee is a British coffeehouse chain. It has used the marketing mix to create its own brand identity. It has also used it to build customer loyalty and become the No 1 in the coffeehouse market in the UK.
Product strategies of Costa Coffee
Costa Coffee offers a range of products that satisfy a variety of needs and desires of its customers. Products include coffee, teas, hot chocolate, a wide range of bakery items, and a range of sandwiches, salads, and soups for lunch as well as breakfast.
Costa Coffee has items suitable for vegetarians and vegans, and many items are gluten, peanut, and nut free. Its coffee beans come from all over the world, and it offers many flavors and sizes so there is something for everyone. It is well-known for the quality of its products. However, it is worth noting that reviews online have shown customers’ mixed feelings about its products and services with many being happy while others branding some its products and services as poor (Trip Advisor, 2022).
Pricing strategies of Costa Coffee
Costa Coffee takes a very calculated approach to pricing, as it does with all things. It understands the value of its brand and therefore puts a lot of thought into how it prices its products. As a premium brand, its prices are generally expensive. Its prices are higher than many other coffee shops in the market. However, it can also be argued that it purses a competitive pricing policy as the competition in this industry is extremely fierce with famous brands such as Starbucks, Pret A Manger, and Caffe Nero are also vying for the market share.
Some analysts argue that Costa offers low-priced options for those who cannot afford high-end coffee as well as more expensive options which cater to people with more disposable income. It also strategically lowers its prices during certain times of year when they want to promote sales.
Place/Distribution strategies of Costa Coffee
Place is an important component in the marketing mix of Costa Coffee (7Ps of Costa Coffee). Costa Coffee has over 4000 stores and 10,000 Smart café machines worldwide (Costa Coffee, 2022). Its distribution strategy includes opening stores in heavily populated areas with good transport links. It offers convenient access for customers who are looking for a quick cup of coffee.
Similarly, with Costa Coffee app, customers can select their favorites and nearest store where the items are prepared and ready for them. This is also very convenient for customers who have limited time.
In the past, Costa Coffee mainly focused on brick-and-mortar stores. However, it has expanded into digital ordering platforms by partnering with Deliveroo, Just Eat, and Uber Eats. While this will increase its business, it may also impact on its profit margins once those delivery companies take away their fees.
Promotional strategies of Costa Coffee
Costa Coffee has applied a range of promotional techniques to attract customers. It provides a loyalty program for customers which rewards them with a free coffee in store once they have purchased 8 drinks.
Costa Coffee uses regular adverting on television and social media. It has had a companion recently in conjunction with Channel 4 UK which saw a number of Channel 4’s familiar hosts and actors having in-person conversations in its stores. However, it is worth mentioning that the coffee house has recently apologized for a rude ad.
People strategies of Costa Coffee
Thousands of people work with Costa Coffee every day who are key to providing customers with an excellent coffee experience. The company understands it very well and rewards employees accordingly. For instance, it announced in 2021 that it would increase pay by 5% for the 14,500 staff working at its stores across the UK (Sky News, 2021).
However, people working for its franchisees are not included in this. This reinforces the allegations that the coffeehouse treats franchisee workers differently. Therefore, it should revisit its HR strategies.
Process strategies of Costa Coffee
Costa Coffee has specific steps that employees must take when handling orders. Similarly, customers need to go through certain steps while ordering their favourites via Costa Coffee app, or online delivery platforms.
Physical environment of Costa Coffee
The last part of discussion in the marketing mix of Costa Coffee (7Ps of Costa Coffee) is the physical environment. Costa Coffee focuses on creating an inviting environment to entice customers to enter its stores and stay for longer periods of time. Its physical environment strategies involve providing excellent indoor seating, attractive décor, and high-quality furniture. These features encourage customer loyalty and increase customer spend.
It is vital for a business to understand its marketing mix so that it knows which elements to focus on and how to use them effectively. Having completed this analysis, it can be said that Costa Coffee has utilized the 7Ps of the mix very well; though there are still some areas where it should bring about some improvements.
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Last update: 25 January 2022
Costa Coffee (2022) Our history, available at: https://www.costa.co.uk/behind-the-beans/our-story/history (accessed 23 January 2022)
Trip Advisor (2022) Review of Costa Coffee, available at: https://www.tripadvisor.co.uk/ShowUserReviews-g1634202-d6522529-r246340559-Costa_Coffee-Pocklington_East_Riding_of_Yorkshire_England.html (accessed 22 January 2022)
Sky News (2021) Costa Coffee dishes out 5% pay rise to 14,500 staff in return for pandemic hard work, available at: https://news.sky.com/story/costa-coffee-dishes-out-5-pay-rise-to-14-500-staff-in-return-for-pandemic-hard-work-12403442 (accessed 23 January 2022)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.