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The Coffee Consultants: Needs Presentation

This presentation outlines strategic recommendations for Needs Convenience to improve the awareness and perception of their premium coffee offering and ultimately boost sales. Key objectives include using effective promotional tools, optimizing advertising techniques, and refining pricing strategies. The findings suggest a need for rebranding, targeted advertising, and enhancing store signage. Additionally, location analysis indicates that proximity to competitors affects coffee sales significantly. A comprehensive approach focusing on brand identity, pricing, and consumer engagement is crucial for success.

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The Coffee Consultants: Needs Presentation

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  1. The Coffee Consultants: Needs Presentation Alessandro Galeone Lindsey MacLaughlin Mark Muller Matthew Osborne Tanyaradzwa Mtetwa

  2. Agenda • Introduction • Objectives • Methods • Findings & Recommendations • Rebranding • Location Analysis • Advertising & Promotion • Pricing, Margins & Wastage • Conclusion

  3. Introduction • Our Goal: To help Needs Convenience develop strategies to help increase awareness and perception of their premium coffee and to help boost coffee sales • Key Factors: Promotional tools, pricing strategies and advertising techniques were the focus of much of our research

  4. Objectives • Increase Awareness & Perception • 36.5% of survey respondents aware of Need’s coffee but many did not associate with the Java Station • General negative perception of convenience store coffee (old, inconsistent taste, poor quality, etc.) • Increase Coffee Sales • Negative correlation between proximity of competition and Needs coffee sales • Positive correlation between coffee sales and adjoining Fast Fuel locations

  5. Objectives • Improve Advertising Effectiveness • In store coffee advertisements blend into other advertised products causing customers to miss them • Opportunity for Needs to differentiate from other convenience stores; currently advertising like other convenience stores • Optimize Pricing Strategy • Needs currently has competitive pricing at second lowest in the Antigonish market

  6. Methods • Coffee Observations • Observed competitors in Antigonish and New Glasgow, counted the number of consumers that bought coffee in peak hours (7-9 a.m.) • General Coffee & Needs Surveys • Interview locations at Sobeys and Needs in Antigonish, and at Sobeys in Stellarton

  7. Methods • Taste Test • Consumers rated Needs coffee on a scale of 1-10 to determine actual opinion of quality • Consumers were chosen throughout the Antigonish population • Store Location Analysis • Used Google Maps to find factors that contributed to individual stores’ high and low coffee sales such as proximity of competition, attachment to a Fast Fuel and geographic location

  8. Rebranding: Findings • Important to Customers • Importance to buying decision rating- 3.8/5 • 43% of survey respondents rated branding 5/5 • Another 24% rated branding 4/5 • Strong Brands lead to Strong Sales • Tim Horton’s 60% of surveyed industry sales • McDonalds 34% of surveyed industry sales • Increased brand image/awareness leads to higher sales + market share • Low Brand Awareness • 40% of surveyed respondents aware of mother parkers coffee • 25% of surveyed respondents aware of the Java Station • 36% of surveyed respondents aware Needs sells premium coffee

  9. Rebranding: Recommendations • Re-name Java Station • Low correlation to Needs • Low brand awareness/image • “Need’s Coffee” • Build Customer Loyalty • Loyalty program to increase consumer re-purchase • Can lead to larger customer base and higher brand image/awareness • New Brand Focused Marketing Efforts • Current efforts too spread out • Increase brand awareness through reinforcement • Premium image, premium quality differentiation • Focus on brand, not distributor

  10. Store Location & Coffee Sales • Top locations have little or no nearby competition • Locations with a neighboring secondary competitor will have low coffee sales • Needs is forced to compete with secondary competitors such as Tim Hortons

  11. Advertising & Promotion • Expanding Interior Store Signage • Promote upcoming events • Adds aesthetic quality in store • Examples include banners, window graphics and LED displays • Expanding Exterior Store Signage • Increases store traffic • 24/7 advertising with one-time cost • Boosts store sales • Flexible messaging • Creates impulse sales

  12. Advertising & Promotion • For a wider reach initiate advertising strategy in partnership with Sobeys • Increased brand awareness • Larger advertising platform • Examples include special events, samples, coupons at Sobeys locations

  13. Pricing, Margins & Wastage • Competitively priced • 23% below average medium, 3% below average large & 8% above average for extra-large • A&Ws $0.75 coffee of any size leads the way • The rest of the competition have roughly the same prices • High Margins • The coffee industry in general has some of the highest margins out there • Needs’ average margin is about 78% • Not much opportunity to increase margins

  14. Pricing, Margins & Wastage • Overall Performance • According to internal data annual coffee revenues are $1 432 500 • With 78% margin that gives a COGS of $310 300 • Residual income is then $1 122 200 • Wastage at $1500 per day saps $547 500 from this total annually; that’s 38.2% of residual income

  15. Pricing, Margins & Wastage • Wastage • Represents a key opportunity to increase coffee program profitability • Approximately 100 locations average under 10 cups sold per day • Introduce single brew Tassimo or Keurig machine in these locations • Effectively reduce wastage costs • Use Sobeys relationship to acquire machines and pods at lower cost • No major change to margins • Many brands make these “pods”

  16. Conclusion • Rebranding • Advertising: Exterior Signage • Promotion: Free Coffee Giveaways • Partnership with Sobeys • Single Brew Coffee System

  17. Questions

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