Coffee Companies and Media: Gaining Competitive Advantage

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Table of Contents

Introduction
Research methodology
Evidence of finding
Summary of the research/Conclusion
Bibliography
Footnotes

Introduction

Coffee is one of the worlds most famous beverages, used in the same way across the globe. Its use dates back to the Ethiopian highlands in the 13^th century where it is believed to have been used for the first time. A legendary story is told when discussing on the origin of coffee, where by a goat farmer (Kaldi) discovered berries that made his goats hyperactive at night after feeding on them. Kaldi is said to have introduced this idea to the monks, who proved that indeed the plant had the ability of keeping one awake for long hours at night.

Word travelled fast and before long it was being used to make drinks in the Arabian Peninsula, before making a penetration to the rest of the world. Coffee is now cultivated in almost all continents and its export is considered to be the most booming business globally which has been ongoing since late 18^th century. This crop comes in two broad categories namely, Arabica and Robusta coffees depending on the origin.

Considering the global popularity it is one of the most valued drinks and has a lot of influence in peoples lives. Many coffee processing companies have emerged all over the world each with a distinct competitive structure to boost their survival in the dynamic market. There are however three major players in the industry namely Starbucks, Nescafe and Peets who all capitalize in the production of instant coffee. They have all adopted different forms of commercials to capture the market from all over the world.

Research methodology

This study involves an analysis of the three major players in the coffee industry namely Starbucks, Nescafe and Peets in terms of their use of the media in gaining competitive advantage. It is aimed at addressing the advertisement media used, how effective this has been to the companies, ways in which this can be improved and the strategies that can be borrowed by other companies in the same industry.

The media in question here includes television commercials, print media, social media and so on. As a result of effective advertisement, these companies have been able to withstand tough economic times and some such as Starbucks has been able to recuperate from what was seemingly considered to be a downfall^[1].

Some of the questions to be addressed in this paper include the steps taken to evolve the products to fit the needs of the present generations and the advertising channels employed to stay on top in the world of dynamic technological changes. This includes the evolution of the advertisement methods from traditional form to modern advertisement media, the challenges encountered while conforming to technology and the strategy on how to counter any unexpected future changes.

The second question to be considered in this research is how the companies have managed to grow over the years and still keep in touch with their customers in all walks of life. This is aimed at bringing out the fact that these companies have customers of all calibers including professionals, students, middle class people as well as the high and low classes.

They are able to satisfy the needs of all these people and provide them with products they can afford depending on their income levels. The third and final question is on how they are able to maintain the high market shares without having to compromise on quality of their products. This analyzes the fact that these companies have been able to survive the young and energetic emerging competitors without going down in quality, a step taken by many companies in the quest to make high profits and remain in the market for long.

In order to fully understand and develop answers to these questions, the companies will be analyzed separately in terms of how they have been surviving in the market. This study will also look at the trends in these companies in terms of how they have been performing in the past. This will include an analysis of the recession and expansion periods if any and the strategies which were employed during recession to ensure that the company survived.

The role of media in these will come in handy since advertisement is considered to be one of the most effective strategies to the success of any company. The issue here therefore is analyzing the different types of advertisements used and the roles they played in the success of the coffee industry as well as the extent to which these advertisement media have been relevant. This study will also consider the evolution of each kind of media and the relevance thereof in the current world.

Evidence of finding

Use of media in advertising has been purported by many authors and scholars to be one of the most effective methods of creating market awareness especially in todays world. Globalization has ensured that companies are able to sell their products not only in their local markets but also in international markets. This means that competition has grown and hence the need to be more proactive in creating awareness of existing and upcoming products.

Products such as coffee are used all over the world meaning that any company in this industry should be able to export. There are coffee companies in almost all countries hence the international competition is very stiff in this. One of the strategies in curbing this kind of competition is using a universally accepted language to communicate in adverts. English is one of the most commonly used languages all over the world.

Most people understand this language, implying that it is one of the best languages to use in advertisements aimed at having an impact in the global market. This claim is supported by AN (2010) in the article English in Advertising: Generic Intertextuality in a Globalizing media environment. He explains the popularity of English language in advertisement and this piece in relevant in this study since it brings out the reason as to why Starbucks, Peets and Nestle use English while developing their advertisements^[2].

Another article by Howard Schultz and Joanne Gordon, how Starbucks fought for its life without losing its soul is an illustration of the positive effects of advertising in the coffee industry. Here, the CEO illustrates how the company struggled to come back to life after nearing complete downfall.

As one of the strategies to revive the company, the management introduced online advertisements including Braille versions to be downloaded and used by people who are blind. By the time Starbucks was going down, it was a mature company and according to the CEO reviving it was one of the greatest challenges he had ever faced in his entire time at the company. Initially, he was more focused on seeing the company grow and failed to forecast what could happen after it reached the ultimate growth point.

This article also gives an overview of how the company was performing amidst competition from the other coffee companies^[3]. The strategies applied here can be used by any organization experiencing the same problem.

One of the greatest issues was as a result of negative publicity in that news went round that Starbucks was coming down. This affected the customer base a great deal and very high tech advertisements had to be created to attract the customers back. This means that the media can be used to both destroy and build the image of a company.

In the era of internet and social media, it has become very easy to send information across the globe and it is no longer possible to control the quality of information being broadcasted. Within a short time therefore, word has gone round that Starbucks was losing its stand and the competitors used this as the chance to take over their market share. This was however short lived since Howard together with his managerial team developed a plan and set it into action, which is what revived the company.

Kate MacArthurs article in The advertising Age titled How Starbuck Strayed is another article that illustrates the effects of media in the coffee business. From this piece it is notable that one of the reasons why Starbucks was going down is because they stopped specializing in what they were known best to produce and began to divert to other food products.

The coffee aroma which seemingly was the main attraction disappeared and the client base went down gradually. Those customers who were royal to the brand came out to complain and this is what is displayed in The advertising Age. For the company to come back to its previous position it was necessary to set up advertisements through various channels and this saw to its comeback.

One of the customers in fact came up with an idea that for Starbucks to survive, it would have to capture its customers first then move with them to the places they wanted to reach. He asserted that most companies failed as a result of growing to the extent that they leave their customers behind hence the growth becomes unsustainable. Starbucks would only attain this goal by maintaining reasonable prices while introducing more products using a balanced strategy.

Peets coffee and Tea as portrayed in Peter James article also illustrates the role that the media has played in the coffee industry. This is one of the highest importers in the coffee industry and has outlets in most places in the United States. This chain of restaurants is famous for producing coffee, selling roasted beans and making different blends of coffee.

As a result of the increasing competition, this company was forced to lay down strategies that would ensure it survives in the market. They had to expand the outlets and open new ones in different locations to increase the level of popularity. The media played a very big role in all this since it was used to advertise the upcoming outlets as well as ensure that the brand remained relevant^[4].

As a result of this, James noted that for any brand to maintain its market share there has to be a continuous show off for the product. Advertisement according to this article not only creates awareness but also ensures that the existing customers are proud to be associated with the brand. Most people like being associated with success and proper advertisement is the most effective channel for attaining this success in any organization.

To put more emphasis on this issue, Wilson and Mercy in their article The Qualitative impact of broadcast media advertisements on the perception of medicines in Nigeria illustrates the role broadcast media has played in creating awareness on over the counter medications. Broadcast media in this case includes radio and television which have been the most used media from time immemorial.

Of the two, television seems to be having the greatest impact owing to the visual nature of the commercials. People are able to relate more to the adverts since they get an idea of how the products look like and they also relate to the designs employed in the advertisements.

Radio is only used as a backup strategy for the population that cannot access television especially in the developing world where technology is yet to be fully embraced. Broadcast media which has been enhanced by use of satellite connections has been used to facilitate advertisements from all corners of the globe ensuring that knowledge of different brands of products has been transferred worldwide^[5].

As a result of this, international trade has grown and the entire world is now seen as a small global market. The fact that it is now possible to even make purchases over the internet has seen to it that products are sold in the international market without involving a lot of logistical setbacks. Generally, this is the point Wilson and Mercy were trying to bring out using the case study of over the counter medications.

Summary of the research/Conclusion

From this discussion and the literatures under review, a conclusion can be drawn on the most effective way of keeping the coffee industry on the move. From all the case studies, a presumption is made that advertising though different media has kept the players in the coffee industry on their feet hence ensuring customer satisfaction.

As a result of this, the quality of coffee has been put in check since no one would want to gain the title of being the producers of poor quality coffee. Considering the dynamic nature of the industry and the high competition from all over the world, such a reputation would see to it that the company completely looses the market hence being thrown out of the picture.

An example of this can be seen from the analyses of Starbucks and the challenges it went through while trying to restructure the company, in the bid to increase its productivity. While straying from the core business of the company, the results was a downward trend but lucky enough it was able to come back to life once more.

Advertisement saw to it that the customers who had taken off came back and the company even gained more. Print media should also not be left out in this, since it is through journals and magazines that most players in the coffee industry have gained their popularity. The best of them all however is the internet and social media since these are considered to be the fastest mode of communication in the current era.

Bibliography

Erhun Wilson and Mercy Erhun. The qualitative impact of broadcast media advertisement on the perception of medicines in Nigeria. Journal of Consumer Behaviour. 2003. Web.

Howard, Schultz and Joanne Gordon. Onward: How Starbucks Fought for its Life Without Losing its Soul, New York, NY: Rodale, 2011.

Khan, AN. English in Advertising Generic Intertextuality in a Globalizing Media Environment. 2010. Web.

MacArthur, Kate. How starbuck strayed. Advertising Age. 2007. Web.

Peters, James. Petes Coffee & Tea. Web.

Footnotes

Kate MacArthur, How starbucks strayed, Advertising Age, 2007.
AN, Khan. English in Advertising Generic Intertextuality in a Globalizing Media Environment, 2010.
Schultz, Howard and Joanne Gordon, Onward: How Starbucks fought for its life without losing its soul (New York, NY: Rodale, 2011), 29.
James Peters. Petes Coffee & Tea, 2002.
Wilson Erhun and Mercy Erhun. The qualitative impact of broadcast media advertisement on the perception of medicines in Nigeria, Journal of Consumer behavior, 2003.

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