Using PESTLE Analysis And Extended Marketing Mix For Di Bella Coffee’s International Expansion Strategy

Background on Di Bella Coffee and TORQ Product

Discuss about the Marketing Communications in Tourism and Hospitality.

The case study provides the example of TORQ, an innovation by Di Bella Coffee. The vision of the company is to provide a passion to the coffee lovers, with the help of a cup of coffee. The company tries to imbibe passion and motivation among the coffee lovers with the coffee cup. The passion, through which the company has built itself and its dedication towards the fellow coffee lovers, can be identified through its innovative products and the branding and marketing strategies. Recently, it has developed an innovative and unique coffee product, namely, TORQ coffee with the help of its research and development team. The product has become fairly popular in Australia. However, with the developed hold over the Australia market, the company’s ambition to enter into other international countries increased. The markets of India and China have been identified as attractive markets for the future investment of the company. The company attempted to follow the standardization strategy to enter these markets. It means that the company planned to sell a unique product to all the customers at different locations. There will be no customizations according to the local customers of the organizations. However, the lack of customization resulted in less profitability for the business organizations.

Therefore, it is essential for Di Bella Coffee to evaluate the local business environment before entering any potential market. The PESTLE analysis is a significant tool, which can be used by Di Bella Coffee to evaluate the business environment. It is a concept of strategic management tools, which helps the companies in analyzing the external business environment (Baker & Hart, 2016). Di Bella Coffee can use it to forecast the consumer response, before launching a new product into the market. It is a strategic marketing tool which examines the political, economic, social, technological, legal and the environmental aspects of a consumer market. It provides significant marketing information about the consumer market, which are needed to be evaluated when developing a marketing plan. The importance of each of the factors in the PESTLE analysis is different for each industry; however, Di Bella Coffee can use to evaluate the beverage industry in China and India. In the PESTLE analysis, the political factor sheds light on the extent to which the government might impact on the economy of a certain industry (Kotler, 2010). The government has a strong impact on the economy of a certain industry as the taxes or the duties directly impacts on the profitability of the companies. The political factors encompass the tax policies, fiscal policies, trade tariffs, which impacts on the business environment. The Indian and Chinese government implements several policies to control the competition in the market. There are also several regulations related to the food safety which can impact the company.

Standardization Strategy and its Impact on Profitability

The economic factors examine the determinants, which may impact on the economic performance of the companies. The economic factors have a long term impact on the economic performance of Di Bella Coffee. It encompasses several factors such as the inflation rate, purchasing power of the customers, interest rates and the economic growth patterns. The social factors encompass social environment, and other determinants such as the cultural trends, demographics and the population density. There are several factors such as interest of the coffee addiction and habit, which may impact the sales of the customers. The technological factors refer to the technological development of the geographical location. It impacts on the infrastructure, technical support and the awareness of the consumers (Doyle, 2011). The legal factors refer to the external and the internal laws which impact the business organizations. There are several laws applicable on business organizations such as Di Bella Coffee. Other than at, the internal policies and hierarchal structure of the company also impacts the operations of the company. The environmental factors, refers to the impact of the surrounding environment on the operations of the company.  It includes climate, geographical location, changes in the climate and the environmental laws (Pearson, 2013).

These issues can be used by the marketing team of Di Bella coffee while making the market entry strategy in the foreign markets of India and China. Although the company used internet to understand the consumer feedback and their preference, conducting PESTLE analysis provided in-depth information about the consumer market. It provides information about several important aspects such as the political environment and the economic health of the market, which cannot be obtained through internet based consumer survey.

In the present competitive times, strategic marketing is very important for the growth of the organization. The business organization should understand the needs and the consumer preference of the market and develop the marketing campaign accordingly. In the present times, the service industry is blooming, with significant focus on the quality of the service provided to the customers. The quality of service is also a measure for the core competency of the organizations. There are several aspects of good quality of service. These aspects have extended from the traditional 4Ps of marketing, which includes the product, price, place, and promotion. With service marketing, it is important to make the consumers aware that the organization is doing something for the consumers and the society as a whole (Rust & Huang, 2014). Moreover, with the current level of competitiveness, it is important for the organizations to provide comprehensive service to the customers.

Importance of PESTLE Analysis for Evaluating Business Environment

Currently, the different Ps of marketing has been extended to product, place, promotion, people, price, packaging, profit, presentation and policies and procedures. The product refers to the service or the offering of the organization to the customers. The company should assure that a high quality product is delivered flawlessly. The people refer to the people, who are engaged in the transaction of the services. It includes customers, employees, communities, and every person who is affected by the quality of the products and the services. The place refers to the marketplace and the strategic geographical location. It means, where the company is going to deliver the products, accessibility of the products and the market characteristics.

The price is another feature of the service marketing. It refers to the amount of monetary exchange for the product. If the product is priced too high, then the company can lose sales, if the products are marked too low, then the organization has to compromise on the profitability. The promotion is one of the most significant aspects of the marketing. It refers to the strategies, which are made to promote the product in the market.  The packaging is an extension of the product promotion. The packaging of the product has a significant impact on the perception of the consumers towards the product and eventually its sales. The perception of the product can be changed by the product packaging. These aspects of marketing are collectively called marketing mix. It is the process of addressing the competition and optimizes the profitability of the organization. The combination of all these variables is collectively called marketing mix and it is used to combat the competition and create a unique place in the mind of the consumers (Reeves, & Knell, 2013).

The marketing mix is used to align the business objectives of the organization with that of customers. It is a basic marketing strategy, which is used by combining different marketing components. The conventional marketing mix is applied and adopted to the business philosophy and the strategic planning of the organization. This marketing mix is used to inform, persuade and remind the customers about the unique product of the organization. It is used to create awareness among the customers and create their positive attitude towards the organization. In the marketing mix, the price of the product is complex dynamics (McCabe, 2010). It is derived from the fixed overheads, direct and indirect cost, profit margins and the risk and uncertainties with the organization.

D Bella Coffee can also use the concept of extended marketing mix to deliver high quality product to the customers. The company has already developed a unique product TORQ, which is blend of specific coffee flavors. The company has also decided the distribution platforms of internet stores. However, the organization has not focused on other aspects of service marketing. Delivering the product over the internet mediums has prevented the organization to provide a humane and personalized service to the customers. It has also barred the organization in developing a core competitive advantage (Faarup, 2010). A large number of customers are not familiar with the brand or the products. Therefore, it is essential to expand the distribution mediums. The sales person of the organization should try to provide exceptional services to the customers. Other than that, the sales personnel of the organization should emphasize on understanding the needs of the customers and providing them with efficient services.

References

Baker, M.J., & Hart, S. (2016). The Marketing Book. Routledge.

Doyle, C. (2011). A Dictionary of Marketing. OUP Oxford.

Faarup, P.K. (2010). The Marketing Framework. Academica.                                   

Kotler, P. (2010). Kellogg on Marketing. John Wiley & Sons.

McCabe, S. (2010). Marketing Communications in Tourism and Hospitality. Routledge.

Pearson, D. (2013). The 20 Ps of Marketing: A Complete Guide to Marketing Strategy. Kogan Page Publishers.

Reeves, R., & Knell, J. (2013). The 80 Minute MBA: Everything You’ll Never Learn at Business School. Hachette UK.

Rust, R.T., & Huang, M. (2014). Handbook of Service Marketing Research. Edward Elgar Publishing.