Peg's Coffee Clutch has 20 years in the business of coffee. The company has the thread from local and multinational competitors. The local competitors are Joe Joe's Cup of Joe, Sallie's Little Sip and The Big Cup. The multinational competitors are Starbucks, McCafe (McDonalds), Pacific Coffee and The Coffee Bean and Tea Leaf. It is necessary for the company to create a new product with a new strategy that helps it to increase sales in a moment when the founder has health problems.
The new product must maintain the values of friendship and compromise of the company with the clients, but it must meet with the new coffee consumers that need a different proposal to the traditional coffee shop. Multinational coffee shops as Starbucks and the McDonalds coffee store–McCafe- are taking an important stake in the coffee shops market, especially in the young consumers.
The proposed product to be developed by Peg's Coffee Shop has the inspiration from the Do-It-Yourself trend that applies to the fast food, ice cream, and hardware stores. A cup of coffee has infinite possibilities of flavors, colors, and presentations. The question that triggers the creation of the new concept is:
"Why the client cannot have a personalized and unique cup of coffee?"
The proposal is that the client could have the ability to "customize" the coffee cup with the following specifications:
■ Coffee Bean proportion: The client may combine two or more coffee beans in the same cup of coffee. The company may offer coffee beans from the Americas, Africa, and Asia.
■ Sweet concentration: The client may have the control of how sweet is the coffee. The client may select white or brown sugar and honey
■ Milk or cream: The client may select if the coffee has milk or cream.
■ Other ingredients: The client may add to chocolate, vanilla or other ingredients to the coffee. The ingredients may vary according to the month of the year.
The most similar product to the proposal of Peg's Coffee Clutch is the Nescafe Espresso Machine, which offers limited possibilities of coffee flavors. The proposal of Peg's is to have infinite coffee combinations using the four previous specifications in a machine designed exclusively for the company.
The Peg's DIY Coffee will be the name of the personalized coffee, available to the clients inside the store and outside of the counter. The introduction price of the product will be 5.90 USD. The price will be higher than the Cafe Mocha with a menu price of 4.85 USD and the Cappuchino Coffe with a menu price of 4.30 USD. The introduction price for the product will allow the company to pay the depreciation costs of the new machine, research and development costs; besides it is necessary to differentiate the new product from the existent products and a higher price helps in that strategy. The price differentiation is a similar strategy that other companies in the restoration sector follows with satisfactory results. The Peg's DIY Coffee Machine complements the product offer of the store and the Clutch Truck.
The Peg's DIY Coffee is a product designed to capture the interest of the new generations of coffee consumers, that is, the age group from 18 to 24 years and convert them to loyal clients of the company.
It is a requisite for the company to register the technology and the brand Peg's DIY Coffee, because, the product or brand has unique characteristics and it will receive emulation from another coffee shops. The same strategy Nestle followed with Nescafe, Peg's Coffee Clutch must do with Peg's DIY Coffee. The original plan for the product is to offer the product in the store and the Clutch Truck, but there are other possibilities to provide the product with a franchise system similar to Nestle, but it will depend on the product sales in the first three years after the launch.
The marketing strategy for the new product must follow the six "M" of marketing: market, mission, message, media, money and measurement. The target market for the new product is the young coffee consumers from 18 to 24 years. The mission and message are to offer a unique product that changes the way to drink coffee. The used media to share the message are the social networks. The necessary money for marketing will be no more than 5% of the total budget. The indicator for the commercialization strategy is to sell one thousand cups per day of DIY Coffee in the first three weeks of the campaign (Carnegie, 2015).
A Customer Relationship Management system (TechTarget, 2015) must administer the arrival of new clients and the return of old customers to the company. The combination of social networks affiliations, billing system, and Clutch Card data allows the company to have the information of all the clients in a centralized in a database to analyze consumption patterns, preferred products, and other metrics that will help the company to improve the existent products.
Reference List
Carnegie. (2015). The 6 M’s of Mastering Your Integrated Marketing Campaign. Retrieved June 22, 2016, from http://www.carnegiecomm.com/blog/the-6-ms-of-mastering-your-integrated-marketing-campaign/
TechTarget. (2015). customer relationship management (CRM). Retrieved June 22, 2016, from http://searchcrm.techtarget.com/definition/CRM
