Executive summary
Just Us! Coffee is the leader retailer and wholesaler of fair trade products in Canada. The company also deals in other fair trade products such as tea, sugar, and chocolate. Its main differentiation is to sell organic products under the fair trade umbrella. Fair Trade gives the company a sense of social responsibility and environmental responsibility in addition to dealing in premium quality products. The fair trade market is a growing market supported by its differentiation values. Just Us! Café wishes to expand its business in order to maintain its share of the current market in Canada. Meanwhile the company has to deal with challenges of competition from the big food and coffee brands such as Kraft, McDonalds, and Starbuck who have recently started selling Fair Trade certified coffee. The company needs to retain the “Just Us!” brand recognition and increase awareness of the fair trade concept among coffee consumers. The paper is an elaborate marketing plan for the company to realize its marketing goals
Company description
Just Us Coffee Roasters was founded by Jeff Moore and Debra Moore in 1995. The two had a background in community development and social work. In 1995 while on a trip to Cuba, Jeff helped the country, which was going through a period of economic crisis, get new market for its coffee. On returning to Canada, he was able to secure a business relationship with fair trade farmers in both Mexico and Cuba. He was able to import fair trade coffee direct from Mexico to Canada and in 1996, the company was incorporated.
The company now operates under Fair Trade and imports roasted and organic coffee from fair trade farmers. Coffee is its main product which generates the highest revenue for the company. It also deals in other fair trade products including tea, sugar, and chocolate. Its products are distributed through coffee shops, restaurants, university, health food stores, and grocery stores. The company has experienced growth since its inception. It has managed to create employment opportunities for many people all over Canada. In 2009, it had a workforce of 69 employees all spread across its coffee shops in Canada. Additionally, the company has a management team of nine. Its sales have been on the rise from year to year.
The company has a strong value system based on business ethics, sustainability, and environment and social responsibility. Their values system considers the needs of all stakeholders affected by their activities. The management believes in growing, supporting, and developing the fair trade market not only in Canada but globally. In line with supporting the concept of fair trade, the founders started a nonprofit organization called JUDES in 2005. The organization aims at raising awareness on social and environmental matters affecting international development. It gives consumers an opportunity to make a difference by encouraging responsible development and conscious consumerism.
Mission/Vision
Its vision statement is “to be a leading Fair Trade business that builds on quality, professionalism, and innovation for the benefit of all stakeholders.” Its mission statement is “to be a viable, progressive, and leading fair trade business which serves as a model for worker s ownership, social responsibility, and environmental responsibility; while at the same giving customers the best possible value, service, and information”.
Competitive advantage
The company is among the first to be certified by fair trade especially in dealing with coffee products. It meets the international standards and criteria set by Fair Trade. Since its inception, the company has experienced growth and branded itself strongly within the Canadian market. It is in fact the leading retailer and wholesaler in fair trade certified products in Canada. The company also has a strong distribution channel. It roasts and packages coffees and other products in its production line and ships them to health food stores, supermarket chains, universities, churches, and small coffee shops. A significantly large proportion of its revenue comes from wholesale sales to large retailers and distributors.
Situational analysis: External environment
Competitor analysis
The company has several competitors within the wider Canadian market. Using the competitor analysis framework suggested by Bergen and Peteraf (2002) two main steps need to be considered in the comparison process. All competitors need to be recognized and classified in order to identify both future and current threat. It will also assist to formulate a strategy. The second step in the framework is to evaluate competitor’s resources and predict the extent of competition. This helps to analyze the magnitude of threat posed by competitors both currently and in the future. It is imperative therefore for Just Us! to understand the companies they are competing with in the Canadian market as well as other companies entering this market. The following table compares the company’s competitors.
Kicking Horse
It is the major competitor within the local Canadian market. However it is mainly based in Ontario, British Columbia and the west coast regions of Canada. It uses a differentiation strategy based on the heritage and culture of the locals in the west coast. They brand their product using local and cultural names to enable consumers to differentiate between its products and those of its competitors. Kicking Horse has also been endorsed by Wings over Rockies, a nongovernmental organization that deals in protection of sustainable livelihoods and wild life. Its products are also fair trade and organic certified. It has an expanding customer base that can be attributed to its business culture, quality products, and the growing number of its restaurants, grocery chains, gourmet food stores, and coffee shops. The moment Kicking Horse establishes a commanding customer base in a local market it proceeds to expand its business to other markets. It has a presence in the US and in Europe. In Canada, it uses Loblaws stores as one of its main distributors in Quebec and the west coast.
Kraft Food
Kraft food has a strong presence in Canada with its wide range of products. The company supports production of sustainable coffee through its long time partnership with Rainforest Alliance.
PEST analysis
Political environment
The political factor that has been highlighted all through the company’s case is the certification of fair trade and organic. It is clear that a company has to first be certified in order to deal in fair trade goods. Such a company has to meet the international standards set by Fair Trade. It then has to support social and environmental responsibility.
Economic environment
The economic climate from the case is constantly changing. Some companies provide mainstream organic coffee while others provide partial organic ranges of coffee. Disposable income of coffee consumers can determine the sales of the product. This is a factor that keeps on changing and the company needs to consider its pricing appropriately because it prices its products relatively high.
Social environment
The social environment is increasingly becoming conscious and knowledgeable about coffee. The fair trade market is gaining a growing support from ethical consumers. They value quality of the product and the want to know the story behind the coffee they consume. Basically, they are sensitive to the production process and are keen to know the state of famers who produce the coffee.
Technological environment
Technology never ceases to grow. The company already has online shops taking advantage of consumer who prefer to purchase their coffee online. However, there is need for the company to examine technology use in order to make full potential of its benefits.
Porter’s five forces
Threat of new entrant
The threat of new entrants is very high because of the attractive nature of the fair trade market. Some of the fair trade products are extremely popular especially coffee and with such considerations, it is easy for a new entrant to simply have interest in the market.
Bargaining power of buyers
Buyers have a bargaining power when they are able to demand for high quality and low prices of a product. The disposable income of consumers is a critical factor that can determine the volume of sales of the high premium fair trade products. If buyers have a low disposable income, they can easily by pass the highly priced fair trade products and opt for other regular products. This implies that the bargaining power of buyers is actually high in the fair trade market.
Threat of substitute products
The threat of substitute product for fair trade good is high because there are various products which consumer can be convinced to buy in place of the certified fair trade products. These are mainly beverages, soft drinks, and regular coffee.
Bargaining power of suppliers
Suppliers have bargaining power but their power is low. Coffee farmers are the main suppliers in fair trade. Previously, they used to be exploited but have recently gained power due to the terms and condition of fair trade. The fact that most of the farmers come from underdeveloped countries, much of the bargaining powers leans more towards buyers than towards farmers.
Competition
The rivalry among competitors is quite high. The Canadian local market alone has quite a good number of competitors all dealing in fair trade products.
Situational analysis: Internal environment
Internal analysis helps the company to understand its own strength and weaknesses in order to maximize the opportunities available in the external environment and also minimize external threats. Using the BCG matrix, it is important to examine the company’s strongest and weakest products. This will help to know the marketing strategy needed to strengthen the weak products or to optimize on the strong products. It also helps to decide where to focus the marketing effort and investment. After a critical analysis of the case, coffee and tea are the main products that generate the highest amount of sales for the company. The two products enjoy a relatively high market share and a high market growth rate. Sugar is the least performing product whereas cocoa has a relatively high market share but a low growth rate. Coffee and tea have shown an increase in volume of 15 percent over a period of 4 years. Based on this analysis, the company needs to evaluate the viability of sugar in the industry in terms of profit and sales. If the product fails the assessment, the company should reduce its marketing effort on sugar and focus more on the other three products: cocoa, coffee, and tea.
Revenue analysis
Revenue analysis helps to identify the strongest and weakest periods in a financial year and subsequently focus marketing effort appropriately in order to maximize on sales and profit. According to the case, the company generates the least amount of sales within the first quarter of a year. Sales in all the four local markets where it has a presence are at their minimum during the first quarter. They increase in the second quarter of the year and are at their best in the third quarter. The fourth quarter sees a slight decrease of sales from the previous quarter. This implies that quarter 1 is the weakest period of the year. The company therefore needs to come up with some new strategies to increase sales during Q1. The strongest period of a year is Q3 and this can attributed to the fact that the country witnesses a growing number of tourists visiting during summer.
The company has four coffee shops, two in Wolfville, and two in Halifax. The shops are located close to each other in both towns. The concentration of the shops suggests that the company needs to be keen when planning its expansion. The shops need to meet a wider audience by spreading them widely.
Market product focus
The company wishes to diversify its line of products in order to increase sales and also maintain its current share of the market in the near future. A critical factor for its success is to invest more on advertising.
Marketing goals and objectives
The main goal of this marketing plan is to improve the performance of ‘Just Us!’ brand and expand its operation for the long term.
The objectives is to
- increase online presence by taking advantage of online advertising though social media
- increasing its number of coffee shops from 4 to 10 within the next three years
- increase sales of the existing strong products by 20 percent within the next three year
Product and service description
The main products lines that company need to emphasize include coffee, tea, and chocolate. Coffee is the most viable product line of the three.
Currently, the company is only based in Nova Scotia and it needs to expand the number of its coffee shops into mainland Canada. Improving the performance of the brand will require raising the volume of products and improving on productivity. Therefore, the critical factors to consider include: cutting the cost of production, increasing prices, brand repositioning, and brand revitalization. Improving brand performance will also require telling consumers the story behind the brand. Consumers are becoming more sensitive to the background of coffee production. When repositioning brand, the company will emphasize the importance of the story behind fare trade coffee production.
Marketing program
Advertising
The marketing strategy focuses on advertising with the aim to influence both potential and existing customers to purchase the products. Advertising has a powerful influence in brand awareness and recognition. The company will engage in advertising through television, internet and press. These are the most common medium with the potential to encourage people’s interests. Social media is highly influential in the world today considering the fact the company also targets young people to consume its products. A close examination of the online community will be done to identify their needs and desires for coffee. There needs to be a huge traffic to the company’s website in order to take advantage of the online community. This will take online advertising effort.
Public relations
Public relation is a key marketing strategy for the company to realize its marketing goals. Already, though JUDES and the museum, the company has an opportunity to establish a good relationship with its stakeholders especially consumers.
Sales promotion
Promotions are good at convincing consumers to make quick purchases. However, the effect is short term. The strategy can be used during the high sales period of a year in order to encourage even more sales. Rewarding of loyal customers has a potential to boost sales in the low sales periods. For instance, a customer who collects coupons in the last quarter of the year can redeem the coupons in the first quarter.
Currently, there are only four stores and the company needs to expand its presence to reach a wider audience.
Marketing organization
Implementation plan
References
Aaker, D., & McLoughlin, D. (2010). Strategic Marketing Management: Global Perspective. J Wiley & Sons.
Dess, G., Lumkin, G., & Taylor, L. (2004). Strategic managment, texts and cases. New York: McGraw-Hill.
IVEY. (2010). Marketing plannning at Just Us! Cafes. Ontario: The Richard Ivey School of Business.
