- What are the possible alternatives with regard to pricing, product mix and franchising decisions and their implications to Barista’s current positioning? What are your recommendations?
Product Mix:
Alternatives: Barista should consider other products that go well with coffe for the Indian customer – this can be some pakoras , samosas, other fried products, idli, cakes and puffs etc so that the customers can enjoy coffee with various combinations. They can alo think of introducing various types of tea apart from coffee.
Implications: This approach will draw customers who want to have snacks with coffee or tea and this can help in increasing the footfalls.
Recommendation: Barista should consider the above alternatives to become more popular and to increase sales.
Pricing:
Alternatives: Instead of uniform pricing Barista should consider location based pricing of its offerings.
Implications: The purchasing power varies in different locations of India including the metros, semi-urban and rural areas. Due to this reason a premium offering from Barista will not be an attractive option for people in various parts of the country.
Recommendation: Barista should study the purchasing parity in various regions of India and accordingly it should price its products to increase popularity and sales.
Franchising:
Alternatives: Barista can increase its outlets in various parts of the country through the franchisee option.
Implications: If the franchisee outlets are monitored for quality and service by barista to maintain uniformity across all outlets then it can be a viable business strategy to increase its sales.
Recommendation: Barista should adopt the franchise route to increase the number of outlets more rapidly while reducing its capital investment in new stores especially the real estate.
- Recommend a growth strategy and formulate 2006-2007 marketing plan for Barista Coffee Company Ltd.
As a growth strategy for Barista the following should be considered in its marketing plan –
- Increase volumes by cutting prices to a certain extent without compromising on quality.
- Change the brand positioning of Barista from "premium" to a "popular hangout," that is, as a meeting place for an increasing number of people. In order to attract large numbers, it is imperative to make the menu affordable. Some low priced drinks should be introduced in line with the new positioning.
- Introduce specialty teas in order to increase its client base among the tea consuming regions.
- With a "hangout" positioning, it should open outlets in middle class localities as well as B-class towns.
- Adopt the franchise route to increase the number of outlets more rapidly while reducing its capital investment in new stores especially the real estate.
- Reduce costs and deliver profits.
- Concentrate on increasing the average bill size of people who are coming in to "recharge and unwind" by making them spend more and making them upgrade to more expensive blends.
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