Introduction for Brake Coffee Inc
Brake Coffee Inc. is a micro-enterprise dealing in high quality blended coffee. Its headquarters as well as initial place of business is 487 Fulton Street, New York. The name Brake is derived from the combination of derivatives from the names Brazil and Kenya. Brazil is one of the highest producers of coffee in the world while Kenya produces perhaps the world’s highest quality coffee (Barjolle et al, 2017). The brand sold by Brake is, therefore, a specialized blend between Brazilian and Kenyan coffee carefully blended and roasted to create an extremely unique product. Brake has two avenues of sales to wit direct sales and through online stores. Directs sales in the form of packed coffee and ready to drink coffee are sold at an outlet situated at the company’s premises aforesaid. The online store is an advanced website that allows for direct interaction between the Brake and its customers. Customers order and pay for coffee through the website with the same being delivered as and where the customers desire albeit at their own expense.
Environmental Analysis
Competitive Analysis
The USA is recognized as the largest coffee market in the world with an overwhelming majority of the populace being avid coffee drinkers (Loftfield etl al, 2016) . Among the major recognized centers for both the sale and consumption of coffee is the city of New York. The competitive analysis for the coffee business is however complex in nature. The vastness of the market is a major positive factor but it comes with a large ally of well-established players. These well established players can only be defeated through uniqueness and peculiarity which is the main premises on which Brake Coffee is based (Howard & Jaffee, 2013).
Delegate your assignment to our experts and they will do the rest.
Economic Environment
The economic environment in the USA has generally improved over the last few years compared to the immediate aftermath of the 2008 financial crisis. From a more specific perspective however, even the 2008 financial crisis did not have a major effect on the coffee industry as a whole. Coffee has a somewhat cultic following in the USA with ardent drinkers remaining as fervent customers even when the general economy is down (Loftfield etl al, 2016) . It would, therefore, be safe to state that the general economic environment favors the product.
Political Environment
The key political issues relate to the source of raw materials, to wit Kenya and Brazil. Albeit the two nations are relatively politically stable, there is a risk of civil strife as well as corruption. The two risks can easily affect the availability of coffee as well as increase scrutiny from private regulators on civil issues. Political issues however do not create a risk of any crippling effects (Howard & Jaffee, 2013).
Legal Environment
Whereas there are no current legal worries for Brakes, potential ones do exist. The first regards a possible change in the customs and importation regulation for coffee due to a variety of reasons either in the USA or in the two main exporters Kenya and/or Brazil. Another potential legal risk would be the introduction of rules and/or laws regulating caffeine distribution from a perspective of health (Rosenfeld et al., 2014). Both issues are potential but not probable.
Technological Environment
The contemporary technological environment is however quite conducive for Brake. According to Ahn & Jung (2016), the use of the internet in the USA is universal and cuts across all generations including the so called ‘digital immigrants’ to wit the older generation. This establishes a ready means for Brake to reach out to its potential customers. Further, technology is now available for the creation of a self-contained online shop. In it, customers can interact with one another as well as with the company, make orders and payments for the same (Howard & Jaffee, 2013).
Social-cultural Environment
According to Loftfield etl al. (2016), almost 75% of Americans over 20 years of age take coffee, 49% of them on a daily basis. However, coffee taking varies demographically. Different demographical groups take different varieties and blends of coffee. This creates a need to either focus on a specific group or create a variety of products to fit different groups. Further, coffee contains caffeine, which from some cultural perspectives is a drug. Overall however, the cultural environment favors Brake Coffee (Howard & Jaffee, 2013).
Primary and Secondary Market Analysis
Brake’s primary market is online shoppers with the secondary market being those customers who visit the company’s restaurant or purchase from choice stores in New York.
4Ps Analysis
The Product is extremely unique variety of blended coffee. The nature and number of blends vary according to client demands including seasonal blends such a Christmas, Easter and Thanksgiving blends. The Place where the coffee is availed is the online shop. This makes the coffee available across the nation upon demand subject to delivery channels. As a secondary avenue, the coffee is also available at the first Brake restaurant and a few convenience stores. Promotion is mainly done through social and mainstream media which inter alia provide links to the online shop. This online promotion is always preceded by a major multimedia advertising campaign that include TV and Newspaper advertising mainly focused around New York City. The pricing is strategic and the initial price was lower than the contemporary market price, currently, a discount is given to every initial repeat customer. There are also discounts for customers who recommend the product to other customers through the online shop website.
5Cs Analysis
The Customer needs are not only for a beverage but also a specialized and personalized drinking experience. The coffee blends and flavors are tailor-made to meet the needs of a cross section of customers. This factor is clearly communicated during the online interactions with the customers on social media. Regarding the Company skills, the brand name of the company cites two major and exotic coffee producers of coffee. The brand names of the different blends were carefully picked to maintain the exotic impression. Further, a kind of closely knit family atmosphere is maintained with the customers through the online avenues. Competition especially for the secondary market is overwhelming due to the well-established coffee producers and marketers (Mathe-Soulek & Roseman, 2015). The online market is however not congested hence Brake has been able to create a niche therein. The main collaborators are the customers themselves who are circumspectly encouraged to make referrals. Successful referrals are rewarded. From the context perspective, coffee is a well-established mainstream product with minimal regulation or cultural prohibitions albeit potential ones exist (Kotler et al, 2015).
STP Analysis
Two major market segments are the main target for Brake. This is the traditional coffee market mainly focused on the mature members of the society whose age range keeps on increasing and currently rates at past the age of 40. The second is the relatively younger generation. The first target group contains more avid coffee consumers while the latter contains a group that is more accessible online. The first group is targeted through traditional selling points of coffee being an American tradition as well as the health benefits of coffee. Issues of quality also feature. The younger generations are targeted through depicting Brake coffee as ‘hip and cool’. Coffee is portrayed as a fashionable yet acceptable drink. From the positioning perspective, Brake is marketed as a new brand compared to the other old and tired brands that sell the same thing all the time. Brake contains a high variety of blends that suits the seasons of the year and needs of the customer. Brake generally sells what the customer wants instead of making the customer buy what Brake wants to make (Kotler et al., 2015).
Short Term and Long Term Goals
The initial and paramount short term goal of Brake is to create a major intercourse about the company and its products. Meticulous records are maintained regarding how many people visit Brakes Website and other social media sites, the nature of inputs made and the number of referrals made. America is an extremely competitive society thus competition would be a great way to achieve this with a good example being a competition to design a logo with the reward being both a financial token as well as something unique like getting to pick the name of one the coffee blends. A raffle where winners get to experience coffee picking in Kenya and Brazil would also achieve this. The second short term goals is to have over 1 million hits on the company’s website that also contain the online shop and also have 50,000 customers within the next 100 days.
The long term goals include the gradual shifting of coffee purchasing from direct purchasing to online purchasing. Shifting 20% of the market in the first 5 years of the business is the initial long term goal. This will be achieved through enhancement of the relationship culture between producers and the customer. This enhances the retention rate of the customers achieved and a higher customer engagement. Through marketing, more customers shall also be reached creating new customer adoption. With regard to the remaining 80% who may still retain direct purchases mainly controlled by the competition, Brake’s second long term goal is to increase the number of direct sales points from the initial one to seventy. Twenty will be in New York with the rest spread across the USA.
SWOT Analysis
Strengths Innovative nature of the product to wit blending coffee from two major producers (Barjolle et al, 2017). The internet based direct marketing which ensures a relationship between Brake and the customers The exponentially lower costs of online and social media marketing. The geographical Source of the product (Barjolle et al, 2017). | Weaknesses Lack of an established brand name. Lack of established infrastructure as the company is both new and relatively small. Overreliance on the internet. Lack of experience in the coffee industry. |
Opportunities High proliferation of internet use. A well-established coffee drinking culture (Loftfield etl al, 2016). Reduced competition on the online coffee sales sector Relatively lower regulatory regimens (Rosenfeld et al, 2014). | Threats Competition from more established coffee blenders and sellers (Mathe-Soulek & Roseman, 2015). Potential political instability in the foreign raw material sources. Potential stringent caffeine regulation (Rosenfeld et al, 2014). Possible price fluctuation of raw materials due to international events. |
Customer needs Analysis
| Customer Segments | Customer Needs |
| First Segment: the Older Generation | A product that provides better health. Convenience in communication and delivery A product they can relate to. Value for money |
| Second Segment: the Younger Generation | Social acceptability Ease of communication and appeal A product that seems to be fashionable. Low pricing |
Conclusion
The coffee market in the USA is both vast and assured hence a good place for a unique investment. It is however, also a highly competitive field complete with well-established players with a strong following. Brake Coffee Inc. comes in with a fresh concept not only from the perspective of the product offered but also the nature of marketing employed. By focusing on blended coffee, Brakes products have an assurance of both availability and quality yet at reasonable prices. The idea of variety creates an ability to sell what the customer needs which is a great way of showing customers that they are valued. Further, seeking to shift coffee purchasing from the common store purchasing to an online platform is a great concept. It not only brings in innovation and novelty but also the future of sales and marketing. Further, online sales and marketing enhances the reach while at the same time reducing the costs.
References
Ahn, J., & Jung, Y. (2016). The common sense of dependence on smartphone: A comparison between digital natives and digital immigrants. New Media & Society, 18 (7), 1236-1256. doi:10.1177/1461444814554902
Barjolle, D., Quiñones-Ruiz, X. F., Bagal, M., & Comoé, H. (2017). The role of the state for geographical indications of coffee: Case studies from Colombia and Kenya. World Development . http://dx.doi.org/10.1016/j.worlddev.2016.12.006
Howard, P. H., & Jaffee, D. (2013). Tensions between firm size and sustainability goals: Fair trade coffee in the United States. Sustainability , 5 (1), 72-89.
Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015). Marketing . Pearson Higher Education AU.
Loftfield, E., Freedman, N. D., Dodd, K. W., Vogtmann, E., Xiao, Q., Sinha, R., & Graubard, B. I. (2016). Coffee Drinking Is Widespread in the United States, but Usual Intake Varies by Key Demographic and Lifestyle Factors. The Journal of nutrition , 146 (9), 1762-1768.
Mathe-Soulek, K., & Roseman, M. G. (2015). Consumer Perceptions of Nonnutritive Sweetened Coffee in the Quick Service Restaurant Industry. Journal of Food Products Marketing , 21 (3), 293-305.
Rosenfeld, L. S., Mihalov, J. J., Carlson, S. J., & Mattia, A. (2014). Regulatory status of caffeine in the United States. Nutrition Reviews , 72 (suppl 1), 23-33.
