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Fundamentals of Marketing

Submitted at: - 12th

November 2009

Section: - B Group No: - 5

Names Registration No

{1} Osama Sohail L1F08BBAM2005

{2} Somia Ibrahim L1F08BBAM2039

{3} Arslan Quyyum L1S09BBAM2011

{4} Raziah Tajammal L1F08BBAM0017

Submitted to: - Sir Agha Mehmood Ali

Assignment No: - 1

Assignment’s Topic: - Current situation analysis

of an organization whose product is a service.

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Topics of Assignment

7 P’s of services: -

(a) Product

(b) Price

(c) Placement

(d) Promotion

(e) People

(f) Process

(g) Physical Environment/Physical Evidence

Differentiation/Positioning

Ansoff Matirx

BCG Matrix

SWOT analysis

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History of Coffee: - The history of coffee has been recorded as far back as the ninth

century. At first, coffee remained largely confined to Ethiopia, where its native beans were first cultivated by Ethiopian

highlanders. However, the Arab world began expanding its trade horizons, and the beans moved into Yemen, where until ca 1700 the major emporium was Mocha, and thence to North Africa and

were mass-cultivated. From there, the beans entered the Indian and European markets, and the popularity of the beverage spread.

Origin of the word: - The word "coffee" entered English in 1598 via Dutch koffie. This word was created via Turkish kahve, the Turkish pronunciation Arabic qahwa, a truncation of qahhwat al-bun or wine of the

bean. One possible origin of the name is the Kingdom of Kaffa in Ethiopia, where the coffee plant originated; its name there is bunn or bunna.

From the above paragraphs, a certain truth is revealed that coffee is actually a “drink of the east” not of the west. A certain misconception is found in the subcontinent that coffee is actually

a drink originated from the west while the drink was properly brewed and made by the Arab traders and Sufis who usually drank the coffee to stay awake for their night prayers.

Gloria Jean's Coffees was founded by Gloria Jean Kvetko in 1979 in Chicago, USA. Gloria

Jean's Coffees began as a small coffee and gift shop in Chicago USA which now has over 110 locations throughout the U.S. Gloria Jean's Coffees USA is owned by Diedrich Coffee, Inc located in Irvine, California. In early 1998, Gloria Jean's Coffees Australia franchised its first

store and within six years had opened 185 stores owned and operated by more than 100 franchisees. In 2003, a franchise opened in Darwin; this meant that the brand was now

established in every Australian state and territory. In 2007 Gloria Jeans made its first debut at Defense in Lahore.

Establishment of Gloria Jeans

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7 Ps of Marketing

Product Price Placement Promotion People Process Physical Evidence

Product: - From their brand logo “Gloria Jeans Coffee” the only product that comes to mind is a hot cup of

coffee brimming with froth. However that is not the case; Gloria Jeans prides itself in not only making a cup of good quality of coffee, with various flavors and “tones”, it also provides cold

drinks, tea and bakery food like desserts etc; to not only quench the thirst but also to satisfy the palette of their customers. All of their drinks are pretty popular but only 2 drinks have made it to the top chart of the drinks list.

Hot: -Cappuccino Flavored Coffee

Cold: -Smoothies and Chillers

Gourmet Food: - Cakes, Apple Pies, Sandwiches and other light snacks.

There are some products who are not the top but are all time favorites of the customers

Christmas Morning Coffee -

Full roasted blend with undertones sweet.

Pumpkin Spice Coffee -

This fall favorite returns with our signature taste that resembles pumpkin pie in a cup.

Butter Toffee Coffee

It’s a smooth, creamy taste, with a touch of caramel coffee

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Price: - As compared to the prices of other locally owned Cafes` like Freddy’s Café

and Coffee, Tea and Company, their prices are reasonable.

Cafes` Prices

Gloria Jeans Rs 200-500

Coffee, Tea and Company Rs 500-999

Freddy’s Cafe Rs 500-999

Placement: - This place houses not only students who are there to relax after the tedious hours of studying,

but also business men of any class; but mostly executive class. Usually the real load comes at

night when the day’s work is done and it’s time to hang out. Gloria Jeans has placed its two

stores where most people come out and that are Gulberg and Defense in Lahore.

Promotion: Gloria Jeans go for promotion parties, news, internet, radio, billboards. They use magazines as

their platform of advertisement. They haven’t opted for television where there are millions of

viewers to catch the sight of Gloria Jeans but as their target market is small, that only includes

high class, upper lower class and sometimes middle class they cannot afford to spend money in

trying to attain the customers that are not in their target. They also give free seminars and

lectures to students to make them aware that coffee is as equal a Muslim heritage as tea is.

They offer the following deals to attract customers

*Books and Coffee - Students Discount 10%.

*Ladies Day Out-Discount 15%.

*Midnight Extravaganza-1 small free dink after buying regular drink.

People: -

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Background music, people chit chatting combined with the smell and sound of fresh coffee beans

being grounded defines Gloria Jean’s visitors. Gloria Jean’s has a mixed clientele of all ages;

children come for the delicious desserts and cakes, professionals and busy executives drop in for

a cup of coffee before heading back home in the evening and groups of fashionable aunties enjoy

their little gossip session in a corner of the café. Students of all ages visit at Gloria Jean's Coffees

outlets not just for group discussions, homework or for projects but also to hang out and have

fun. Nevertheless, all is good as long as it’s serving its purpose of giving the people some peace

of mind and entertainment at the same time. There are no waiters to serve the customers.

Customers have to order at the counter and they get their desired food item in five to fifteen

minutes. Almost 400 people visit this café everyday and the number increases on special

holidays.

Target Segments Characteristics

Age 25-35 and older. Sometimes children.

Income Rs 35000-65000

Social Class Students, Business and Working Class

Gender Male and Female

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Process: - The process of making coffee at the counter is simple but the complexity comes when the coffee

has to be imported from the Australian farm itself for Gloria Jeans is a franchise company and

according to standard rule the coffee has to be made exactly the same way using exactly the

same material and procedure. The coffee beans are bought at good rates from the Rain Forest

Alliance farms. The farmers that aren’t paid according to the crop become very poor and thus are

not able to produce good quality crop year after year. This alliance was made to support the

farmers by paying good and reasonable prices for quality coffee beans. Following are the

procedures applied to obtain the coffee beans: - Point to be taken that the coffee is grinded

freshly and powdered coffee like Nescafe is not used to maintain quality of the coffee.

The customer

then can order his coffee on

the counter and the process

only takes 15 minutes for the

preparation. This whole

process is Self Service, no

waiters are appointed for it

only the coffee makers are at

the counter so that the

customer can feel the true

taste of coffee just by

making his choice on the

counter.

Picking of

Coffee Beans

Roasting

Grinding

Drinking

Packaging

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Physical Evidence/Environment: - The worthy experience begins the moment you step inside Gloria Jean’s Coffee as the

strong essence of coffee beans greets you. The whole place is designed in neutral tones, whether

it is the wooden flooring, furniture, paint or even the lamps. Tones of brown dominate the area

giving the café a casual and warm aura as cafés are meant to be places where you can relax, read

a book or just catch up with friends. The light chocolate brown walls matched with the

blackboard menus on them complete the café look. Sitting on the beige and brown sofas looking

outside the window makes it the perfect nestling spot. A lot of sunshine pours in through the

French-inspired windows adding to the friendliness of the place, unlike most dark, mysterious

caves “Sheesha” cafés that have sprouted across the city. The ambience seems to cater with the

orange sofas adding a splash of color against the warm brick walls; the woodwork gives the

place a complete coffee house look. Rest assured you won’t feel uncomfortable while visiting

Gloria Jeans. In addition to it, there is a little gossip session in a corner of the café while sipping

coffees.

Differentiation/Positioning: - There are two types of coffee beans that are mostly used Robusta and Arabica. The Robusta is

used commonly in households and local based Café. Robusta is not of high quality; its taste is

not as strong as Arabica. Arabica has a strong taste and a lot of hard work is required to make its

yield 2 times in a year while Robusta can produce yields 4-6 times a year. The only reason why

Gloria Jeans is highly recommended by its customers is because of the “tones” of the coffee that

Gloria Jeans can make. Like tea the tones have a lower, mild and strong taste that can only be

produced by Arabica. Gloria Jeans uses this highly expensive Arabica beans to produce high

quality coffee. Not to mention they are the only “foreign based” Café found in Pakistan. They

do have a competition but only at Gross Competition, meaning with local based Cafés. There is

no Net Competition yet because there are no international based Cafes found in Pakistan.

Gloria Jeans uses which is a body recharger, and their every product from napkins to plates are

from Australia, why to maintain the exact same quality of not only producing Coffee but also

serving it in the exact same quality. Other local based café use simply Coffee powder and that

doesn’t have the same taste as Coffee which is first freshly grounded then served. The difference

here is of quality and positioning is that with that same quality they can serve different flavors of

it.

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Ansoff Matrix: -

According to the current situation, there were already many restaurants

besides Cafés that serve coffee, so the entry of Gloria Jeans is no surprise that it

actually entered the current market with the current product i.e. coffee thus it is a

Market Penetration.

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BCG Matrix: -

According to BCG matrix, Gloria Jeans is actually in the Cash Cow sector. Gloria Jeans come to

Pakistan almost 2 years ago, in 2007 and with a large bang it got its reputation among the elite

class of the society as the most excellent Coffee maker. But after its entry, the market share has

escalated but the growth is still negligible. It’s because that the class that they have targeted is

considered as Niche sector in Pakistan. Also Pakistan is still a Tea lover rather than a Coffee

Lover. Besides coffee there are still some beverages that people have considered them as part of

their daily lives like Coke, Juices and the like. Leaving them would be like leaving water, in

literal sense. The most ridiculous problem that remains is that most people consider Coffee as the

“Western Style” and traditional mindset of the people are not yet ready to accept this alien drink;

although history speaks for itself that Coffee’s birth was in the Islamic Kingdom in 16th century

but most people don’t know. And so Gloria Jeans is still struggling at the growth stage.

High

Gro

wth

rate

:

Market Share

Low

High Low

Coffee

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Strengths

Weaknesses

Opportunity Threats

SWOT Analysis: -

1.Strengths

Backward Integration

International coffee firm

Comparatively low prices

Pioneers in Pakistan

2.Weakness

Culture

Low number of franchises

Catering fit into short range of group

3.Opportunity

Growth

Acceptance of the Coffee Culture

4.Threats

Security

Large number of competitors

Lack of awareness among people

Red Tape