Assume that you are a consultant to the company. Present a complete analysis and actionable set of recommendations to Mr. Christophe Reale, managing director of Expressamente at Illy. Your analysis should include a set of reasonable alternatives and a plan (including qualitative and quantitative justification) that could be implemented by the date outlined in the case. The following, while not intended to be the sole focus of your report, can help you navigate through the case.
1. What do you know about the situation?
– Coffee industry booming.
-High saturation and aggressive competition
-Demand is heavy for premium coffee
-Growth of Niche markets
-Illy- viable, sustainable, international (people know about it *6mil espressos consumer per day worldwide)
2. What are the issues/problems? Are they important? Why? Why not? -Have to prioritize markets, where is the greatest potential/risk -Illy place in within a global market
-What type of marketing strategy to peruse
-Every market (location) is different, from culture to taste habits/presence -Need to be able to localize markets but at the same time to deliver a consistent message/feel/ambient of Espressamente-Very Important to consider upon entry into market -coffee paradox (see page 3)
3. What environmental changes if any, can you identify in the case? What impact does this have on the business? Their competitors and the “market” in general?
-Economic environment (forecast for speciality coffee)
-Depends on a healthy economy and strong customer spending to drive sales
– Growing middle class (Yes or no) prospects for successful coffee markets
– Developed nations (thousands of coffee shops) look to expand in emerging markets (China India already experiencing high competition) Timing is key (should be now) – recurring theme :concentration and saturation need to be different/innovative – developing nations had fewer laws related to
copyright and other regulatory measures
4. What are the strategic marketing tools that can be used to develop possible alternative solutions?
5. What marketing program issues should be addressed?
-Pace, rhythm and scope
6. What is the potential outcome of each of the alternatives suggested?
7. What other alternatives has management not yet considered? What impact will these have? 8. What role do the members of the “team” play in the successful outcome of your plan?
Criteria for the Evaluation of the Mid-Term Report:
1. Identification of the issue (s) to be resolved or the task facing the manager. (10%) 2. Analysis of the situation facing the organization – both the external environment and the organization itself. Evaluation of the marketing orientation of the company will be important. Use of appropriate marketing concepts and models, both qualitative and quantitative if applicable. (30%) 3. Identification of at least 3 alternatives that are mutually exclusive + Criteria used to select the most appropriate (20%+10%)
4. Recommendations that are actionable and which logically relate to the issue and analyses that were done in 1, 2 and 3 above. Recommendations are fleshed out and a Marketing Program is clearly identified. (15%)
5. Grammar, report presentation, logic followed and persuasiveness of the report. (10%)
Espressamente statement: Exclusive destination with an emphasis on quality and aesthetics.
-First mover (inventor of the precursor and espresso machine) -Unique coffee blends
– Brand awareness Scope (over 140 countries and 50k+ high end restos, 6mil cups per day) – Reputation (known as best coffee in Italy and a must have in Italian restos worlds finest tasting coffee) -Brand personality (recognized for quality and espresso culture obsession for quality and innovative design) -Brand equity (associated with upscale culture, fashion) (—prestigious–) – Top automated system and sophisticated machinery
– Product expansion (mugs machines, accessories )
-200 locations, 30 countries
– Beautiful locations, design and decor of coffee shops
-Considerably low sales volume in India, Japan and Brazil
– Sales volume growth fluctuations (very unpredictable from year to year) Opportunities:
-Increasing forcast of emerging and developed markets
– Coffee industry booming
-growth of Niche markets
– increasing demand for specialty coffee
-Middle class growth in emerging countries (china India)
– chance to compete head- on with Starbucks
-growing disposal income in countries such as brazil
-Fierce competition heavy market players such as Mcds, starbucks -highly saturated market conditions
-Lavazza competition (similar to Illy, competes for that authentic Italian taste, both companies emerging from Italy)
-Variety of environmental and legal issues that surround the coffee industry – The “Coffee paradox”