Costa Coffee Marketing Strategy & Marketing Mix (4Ps)

Published by MBA Skool Team, Last Updated: September 14, 2021

Marketing Strategy of Costa Coffee analyses the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like product innovation, pricing approach, promotion planning etc. These business strategies, based on Costa Coffee marketing mix, help the brand succeed.

Costa Coffee marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives.

Let us start the Costa Coffee Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:

Costa Coffee Product Strategy:

The product strategy and mix in Costa Coffee marketing strategy can be explained as follows:

Costa Coffee is one of the most popular coffee chain outlets globally. Costa Coffee sells coffee, beverages & snacks as its main product offering in its marketing mix. The Coca Cola company purchased the brand from Whitebread company for $5 billion in 2019. The company offers a lot of variants and flavours in coffee. Most famous offering of Costa coffee are: Cappuccino, Latte, Flat white, Americano, Mocha, Expresso etc. Some of the ice blended products offered by costa coffee are: coffee cream, Mocha cream Frostino, Lemonade etc. Costa coffee also sells its products to businesses and caterers for example the company sells its vending machines to corporate offices and colleges under the brand name of Costa express. The product offered by costa coffee is the main driver in company’s business strategy as it uses a pull strategy to gather more customers and be liked by them. The company believes in giving wow moments to its customers with its main product coffee. A canned coffee version was also launched along with Coca Cola for retail chain outlets.


Image: Wikimedia


Costa Coffee Price/Pricing Strategy:

Below is the pricing strategy in Costa Coffee marketing strategy:

Costa Coffee has a diverse price offering in its marketing mix, though it is influenced by competition and is slightly premium.

The products offered by Costa coffee are priced at premium range because of its brand value and high quality. Costa coffee always believes that price is secondary for any customer and focuses on delivering good quality products. The company provides two variants in its beverages like small and large. The price is also directly proportional to the quantity ordered. Costa coffee also sells it coffee vending machine under brand Costa express. The price of this vending machine is competitive as compared to its other competitors like Starbucks, Cafe Coffee Day. The price of coffee also varies according to the supplement added to coffee like extra chocolate, cream etc. The pandemic impacted the sales as stores were shutdown, but were later opened for takeaways. The annual revenue of the company is around $1 billion.


Costa Coffee Marketing Strategy comprises of not only its Marketing Mix, but also segmentation, targeting, positoning, competition and analysis like SWOT. Also read Costa Coffee SWOT Analysis, STP & Competitors

Costa Coffee Place & Distribution Strategy:

Following is the distribution strategy in the Costa Coffee marketing mix:

Costa Coffee operates in nearly 3000 outlets spread over 30 countries. It operates in more than 2100 UK restaurants and over 1200 outlets are spread overseas. Costa coffee outlets are mainly targeted at upper middle class and rich people. Its outlets can be found mainly in shopping malls, airport etc. where there is high footfall. Costa coffee also modifies its menu according to the country in which it operates to gain more customer base.

The Costa Coffee website also allows its users to place orders online which can be delivered via a delivery partner in that region.


Costa Coffee Promotion & Advertising Strategy:

The promotional and advertising strategy in the Costa Coffee marketing strategy is as follows:

Costa coffee is a premium brand which does not rely much on advertisement on TV, print media etc. The most important marketing strategy followed by the company is to get word of mouth publicity from its customers as the brand Costa coffee not just provides coffee but also the experience. Also as a part of its promotional strategy of new products the company provides free samples to its customers to get the review about product and increase it purchase intention. Costa coffee also focuses on digital media to promote its campaigns and connect to its customers. The company also runs a loyalty program as Costa Coffee Club which allows its frequent customers to get discount on products and earn points on purchase of products from any Costa Coffee outlet. One of the promotional campaigns followed by the company is ShakeUpSummer which promotes company’s cold coffee products. Also Costa Coffee uses its logo on the cups that are served to the customers.


Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of Costa Coffee.


People:

Costa coffee globally focuses on its people ie employees and customers. The number of employees working in Costa coffee is more than 20,000. The employees of Costa coffee are trained to follow a highly professional and polite behavior with its customers. Each Costa coffee treats every customer with high regards and the overall experience of the cafe is majorly dependent on its employees. Also the employees are very well trained in communication skills as they have to deal with variety of people. Employees of Costa coffee also interact with customers in regional language along with English as their main language to make its customer feel more comfortable and friendly. Also its employees all over the world wear same color uniform which is deep black in color. This shows how its people strategy in its marketing mix has been important in its success.


Process:

Costa coffee follows a standard procedure as most of the big coffee houses around the world. Each outlet of Costa Coffee has very nice sitting arrangement. As the customer enters the outlet and make themselves comfortable, the menu card is presented to them by the employee working at Costa coffee outlet. The employee makes sure that each customer is treated politely and with a smile. After taking the order the employees make sure that the products asked by customers are made them available in minimum time and with high quality maintained. The last process is of paying bills for the products. Costa coffee uses a wide range of mechanism to process fee from customers like cash payment, online payment, credit/debit cards etc. In few of the outlet of Costa coffee there is a self service counter.


Physical Evidence:

The outlets of Costa Coffee are the physical evidence for the company. Costa Coffee operates in over 31 countries with a total outlet count of more than 3300. Major part of Costa Coffee business is established in UK with 2100 outlet established there. Also the products offered by cafe are the physical evidence for this coffee house. The company also sells some of its merchandise like its branded cups to its customer. Hence, this completes the Costa Coffee marketing strategy & marketing mix


About Costa Coffee:

Costa Coffee is the largest coffeehouse company in Britain and second largest coffee chain in the world. The largest coffeehouse chain being Starbucks and then followed by Costa Coffee. It was founded in London, England in the year 1971 by Italian brothers Bruno Costa and Sergio Costa. The headquarters of Costa Coffee is in Dunstable, England. Costa Coffee has more than 3000 stores worldwide in over 30 countries. Costa Coffee is a subsidiary of Coca Cola company, which purchased it from Whitbread company which owns multinational hotels and coffee shops.

Costa Coffee produces its own coffee and has owns its roastery. Costa Coffee also offers coffee machines under the brand ‘Costa Express’.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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