MG 511 Strategic

Marketing
Case Study:
Marketing Planning at
Just Us! Cafes
Lecturer: Ms. x
Date: 20
th
Dec. 2010
Name: Senpaul Walsh
Student No: X

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Contents:
1.0 External Analysis 3
1.1 Competitor Analysis 3
1.2 Specific Competitor: Kicking Horse Strategy 4
1.3 PEST 4
1.4 Porters 5 Forces 4
2.0 Internal Analysis 5
2.1 Value Chain Analysis 5
2.2 BCG Matrix 5
2.3 Revenue Analysis 6
2.4 Geographic Concentration 6
3.0 SWOT Analysis 7
4.0 Key Issues 7
5.0 Strategic Alternative (A) 7
6.0 Strategic Alternative (B) 8
7.0 Strategic Alternative (C) 9
8.0 Bibliography -
9.0 Appendices -




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1.0 External Analysis
In order to develop effective strategies Just Us Cafs are required to examine the
external environment in which they operate. I have carried out the following analyses:
Competitor Analysis
Specific Competitor: Kicking
Horse
Pest Analysis
Porters 5 Forces

1.1 Competitor Analysis
Competitor Channels Locations No. Shops
Kicking Horse Coffee Shops, Gourmet
Stores, Restaurants
West Coast, Canada
Quebec & Ontario
N/A
Kraft Foods Stores, Universities United States Mainstream
P&G Millstone Mainstream Canada & United States Mainstream
Nestle Mainstream Canada & United States Mainstream
Lowblaws Private Label Loblaws Stores Canada Mainstream
Just Us! Coffee Shops, Universities,
Gourmet Stores,
Supermarkets
Nova Scotia, Quebec &
Ontario
4 Coffee Shops & On The
Shelf
Trident Bookseller & Cafe Coffee Shop Halifax, Nova Scotia 1
Java Factory Coffee Shop Nova Scotia-Halifax,
Darthmouth, Upper
Tantallon
3 Coffee Shops
Tim Hortens Restaurant Nova Scotia General-
Wolfville(2), Halifax(21)
170
Second Cup Coffee Shop & Retailer Canada General, Nova
Scotia(6)-Halifax(5)
360

As we can see from the above table, JU have several competitors across the line
in the local market, Nova Scotia, and the wider market, Canada and US. Bergen
and Peteraf (2002) suggest a two step competitor analysis framework when
comparing competitors. Within their framework they suggest that from the
outset a company must recognize and classify all competitors. By doing this JU
can actually identify both direct and future potential threats to their company.
See Appendix A. This in turn will alert them to the most immediate threats short
term and long term as well assist formulating a strategy. The second stage of the
framework model is concerned with the evaluation of the competitions
resources and the prediction of rivalry. They discuss how by understanding your

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competitors resources you can predict the scale of future threats. Therefore for
JU, they need to understand who they are competing with within the local
market and big players entering that market, i.e. Trident only have one shop so
JU could in turn be a threat to them whereas Java factory could be a threat to JU.
Bergen and Peteraf (2002) also note that if two firms within the one market have
similar resources, which would appear to be the case for JUs local market of
Nova Scotia, then this should in turn allow them to satisfy the same customer
needs, therefore making the need for strong branding and differentiation
essential.
1.2 Specific Competior: Kicking Horse
Another important form of analysis is to examine other companys strategies to
see what has worked and what hasnt and the risks/results involved. For JU, I
feel looking at Kicking Horse is a very good way to test out future strategies.
As stated within the case, Kicking Horse is a major competitor in the Canadian
market. They are based however on the West coast of Canada, British Columbia.
As a method of differentiation, the company leveraged the heritage and local
aspect of the product in order to expand i.e. using the local names and culture to
differentiate their product. They also used endorsements with NGOs and an e-
commerce site to further promote their brand. Through these tactics, it provided
Kicking Horse an established platform within their local market and an
opportunity to expand globally into the US and Europe. This strategy proved
very effective and JU should examine it carefully.
1.3 PEST Analysis
See Appendix B
1.4 Porters 5 Forces
The most powerful and widely used tool for systematically diagnosing the
principal competitive pressures in a market, and assessing the strength and
importance of each, is the Five Forces Model (Porter 1979).
See Appendix C

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2.0 Internal Analysis
JU must not only understand the industry and market they are operating in but also
their own internal capabilities and strengths/weaknesses. Therefore we must conduct
an internal analysis of JU. I have carried out the following analyses:
Value Chain Analysis
BCG Matrix
Revenue Analysis
Concentration Examination

2.1 Value Chain Analysis
See Appendix D
2.2 BCG Matrix
As JU provide various organic products it is important to examine the more
profitable ones and not so profitable in order to either focus marketing effort on
weaker products or discontinue them.
After careful examination of JUs product offering and Appendix 1 of the case
study I believe that they have:
Stars: Coffee & Tea
Dogs: Sugar
Cash Cows: Cocoa
Coffee and Tea appear to be the largest growers
in the trade figures with significant growth rates
in volume averaging approximately 15% across
both categories over a four year period. Perhaps
JU should look at the profitability of the sugar market and consider placing less
emphasis on it.





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2.3 Revenue Analysis
Quarter Grand Pre Wolfville Barrington Spring garden
Q1 $134,625 $123,912 $90,562 $123,709
Q2 $175,217 $138,898 $104,877 $148,356
Q3 $215,909 $142,984 $112,504 $152,758
Q4 $213,673 $134,205 $111,142 $180,625

By examining the revenue streams we can identify the weakest and strongest
times of year and target our marketing activity directly at these in order to
strengthen sales. It is clear from the table that Q1 is the weakest time of year and
perhaps some new innovative strategies could help increase sales here. Q3 is the
strongest period of the year and I believe that this is accountable to the summer
tourists.
2.4 Geographical examination
Another analysis I conducted was to look at the concentration of the JU coffee
shops and the potential markets
available to them. The illustrations
below show the concentration of the
shop locations. It is obvious to locate
in the more densely populated
areas; however the company could
be missing out on further
opportunities. Both shops in
Wolfville are within a mile radius of
each other and in Halifax they are
within 10 minutes walking distance
of each other. JU must consider this
when planning growth or expansion as they are reaching a limited audience
when so clumped together.



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3.0 SWOT Analysis
See Appendix E

4.0 Key Issues
Increase Marketing Spend
Targeting new markets or new buyers?
How can JU build on the assets they have in place already
Product Line and profitability
Need for clear MARCOMS
Increase volumes purchased in existing channels
Maintain/defend market share or attempt to grow
Assess Retail Channels and feasibility of Long term

5.0 Strategic Alternative (A) Joint Venture/Strategic Alliance
The first strategic alternative I propose is to attempt a joint venture/ strategic alliance
with a fellow competitor with similar values. This strategy could help JU with resources
and in increasing market share in the local market as well as providing a platform for
expansion outside the maritime states.
Sherman (2003) states that one of the possible reasons for a joint venture or strategic
alliance is to widen or integrate product lines. As we have seen from the SWOT analysis,
new product lines would provide JU with new opportunities for revenue. However an
important factor to consider when considering a joint venture or strategic alliance is to
give careful thought to the type of partner you are looking for and what resources you
and the partner will be contributing to the newly formed entity (Sherman 2003). From
careful examination of competitors in the local market I believe that a joint venture with
Kicking Horse would be most effective. The reasoning behind this is because they are
located on the opposite coast of Canada and have the same core values as JU. There are
mutual benefits for both parties by entering this agreement.



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Just Us! Kicking Horse
+Access to Distribution
Channels
+Online & Marketing
Expertise
+Greater access to
Eastern Market
-Cons outweigh Pros
+Expansion Nationally -Loss Of Control +Huge Publicity Opps e.g.
JUDES
-Upset Customers
+Positive Awareness of
Fair Trade to Nation
-May discontinue some
lines
+Innovative Products -Reduces Exclusivity of
upscale food retailers

In terms of feasibility of this strategy, I believe that it would be very beneficial for both
parties however I question the reality of it. In order for this strategy to be implemented
I believe that there would have to be more in the agreement for Kicking Horse to get on
board. I also acknowledge that this strategy may have knock on effects on JU. With a
joint venture, customers could perceive the company as selling out e.g. similar to
Innocent smoothie Coca Cola purchase. This in turn could affect the loyal customer base
as many customers may be attracted to the idea of the company being a small company
from a local town. Another knock on effect could be from the employees also. As stated
in the article the employees are all happy to be part of something good and although the
values will remain the same, management may change through the deployment of this
strategy as well as the direction of the company which could upset employees and in
turn reduce the workforce or productivity levels.
Therefore I would not recommend this strategy.

6.0 Strategic Alternative (B)
The second strategy is to remain in the Nova Scotia market and defend what JU already
has, no expansion.
The objective of this strategy is to continue maintain the 4 coffee shops and maintaining
the relationships with retailers. The benefits of this are that the company can focus on
its service offering and finding new product lines. However because of the competitive
environment it is not recommended and therefore is not the selected strategy. However
one solution to combating the intense competition in the market is to use a counter-
offensive defense as suggested in Wilson and Gilligan, 2005. This strategy of defense is used
in industry when a competitor launches an attack on the market. JU for example could

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12-18 Months
Online
MARCOMS Mix
Improve Brand
Performance
New Units
Increase Reach
Become NS Market
Leader
48-52 Months
Expand Nova
Scotia 52-60 Months
Continue To build
Awareness
Maintain
After 60 Months
Closer Proximity First
The Brand From Nova
Scotia
Expand
Mainland
Improving
Brand
Performance
Raise Volume
Brand
Revitalisation
Brand
Repostioning
Improve
Productivity
Raise Prices Cut Costs
either meet the attack head on or look for a gap or a weakness in its competitors strategy
through promoting their own strengths and highlighting the competitors weaknesses.

7.0 Strategic Alternative (C)

Improve Brand Performance & Expand Long Term

The chosen strategy that I have selected is a five year strategy. The concept behind
the strategy is to improve and build on the existing brand within the local market
with expansion plans 1) in Nova Scotia and 2) to mainland Canada.










As you can see from the above figure my strategy follows a four step process.

Improve Brand Performance:
At present as mentioned
earlier, JU are a relatively
recognizable brand in the
Nova Scotia market, Wolfville
& Halifax. I suggest that they

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aim to improve the brands performance. Doyle & Stern (2006) suggest the following
framework for improving brand performance.
For JU I suggest that they look to reposition the brand and leverage the story behind
the brand as their pull. As mentioned earlier I would also recommend that they aim
to cut costs through examining their value chain.

When repositioning it is crucial for JU to tell the story of the coffee fair-trade process
from start to finish and emphasize the fairness in the whole process thus leveraging
the brands personality. Brand personality can be defined as the embodiment of
personality traits of the consumer in the brand itself (West, Ford & Ibrahim, 2006;
P259). By leveraging this more as part of the offering JU will more be instantly
recognized by customers which is crucial. This story telling will also differentiate JU
from other fair trade competitors as well as educate the public, one of the
management teams goals. By using Aekers 1996 model for brand identity JU can
understand how the customer perceives them and position themselves adequately.
See Appendix F.
According to Ries and Trout (2001), the biggest challenge to win customers over is
within the mind of the customer before they even decide they want coffee. JU should
again as mentioned play on telling the story to be instantly in the customers mind.
They should also adopt a catchy memorable slogan, again reflecting their brand
personality.
As mentioned above, JU need to develop a clearer MARCOMS model. Marketing
communications (MARCOMS) refer to four different types of communication
channels advertising, public relations, personal selling and sales promotion.
MARCOMS give organizations the opportunity to establish, in this case strengthen, a
strong position in the market and assert their distinctiveness and also ties into what
the client wants to say as opposed to execution, which relates to how the message is
received. (West, Ford and Ibrahim 2006). There are many advantages of a successful
marketing communications strategy such as cost savings, which is crucial to JUs
needs.
I recommend the following:

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Advertising - This marketing channel aims to inform or influence one or more
persons about the product or service sold. Advertising is a long-term marketing tool
that can increase the brand awareness through television, radio, internet and press.
Advertising used in these mediums can encourage peoples interests and also sales. I
believe JU currently relies on the PR channel too much and should realign their
efforts with more emphasis on advertising, with online particularly. Online is
particularly effective at strengthening brand equity which again assists the
strengthening strategy (Wakolbinger et al., 2009). I feel the opportunity that social
media provides cannot be underestimated and can tie into using their loyal
customer base as brand ambassadors on facebook and hopefully in turn creating a
brand community. I also recommend that JU examine the online community life-
cycle suggested by Iriberri and Leroy (2009). There are 4 stages in the life cycle of
an online community, inception, creation, growth and maturity. By understanding
the phases of this life-cycle JU can guarantee that the rate of growth of their online
community.

I believe that increase in advertising will generate more traffic to the website and
therefore they should make the site more interesting. An interesting feature I would
feel would be online videos of the product process on the website from start to
finish. Another simple low cost form of advertising and using technology could be a
members club. By establishing this in the online environment they could then use
Electronic newsletters to keep in touch with existing customers. The benefits of
electronic newsletters to customers are simply that they can be issued in large
quantities on a low-cost basis and can reach a large portion of their target market.
They could also provide JU with important feedback regarding innovating their
product i.e. new flavours or lines. Once they have built their online base up enough I
think that e-retail could become an option for JU.
Public Relations (PR) This marketing communication channel can establish a
mutual understanding and reciprocal good will between itself and its stakeholders.
JU already as stated earlier have a huge emphasis on PR through cultural events in
their coffee shops and talks as well as receiving awards. I believe it is a successful
route to take but that for the current economic climate it is very expensive in terms

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of effectiveness on sales, ROI. Perhaps as above, money would be better spent in
advertising and more low cost events in house e.g. book clubs.
Sales Promotion Sales promotion can be used as a strategy to encourage customers
to make a quick purchase. Using this marketing channel only has short-term effects
on sales. Perhaps rewarding loyal customers could be a method of boosting sales in
Q1 the most difficult period for JU. I believe that by offering samples or coupons in
Q4 people may come to redeem them in Q1. Bawa and Shoemaker (2004) highlight
that free samples also aid brand recognition and have a measureable long-term
effect on sales up to 12 months after the initial after the promotion.
This brand improvement phase I estimate will take approximately 18 months to
implement considering the scale.
The next step is to expand within Nova Scotia and dominate the market. As
mentioned earlier there is a highly concentrated location of shops. I suggest opening
new coffee shops but in more dispersed locations, thus increasing reach and aiding
domination of market. See below.
I suggest opening simple
stores that serve coffee and
not acquiring old cinema etc
as that is too costly. The
purple boxes indicate new
potential locations and the
green indicates a tourist
hotspot. I estimate that these
new stores will take the
strategy up to its 48
th
52
nd

months to be up and running
and profitable. It is also
important to note that this expansion method allows close relationship management
as they are relatively located to each other as opposed to in Toronto. By then the
brand should be the strongest in the Nova Scotia Market. Fan (2005), suggests that
strong widespread branding represents and promotes lifestyles and that brands
themselves become part of the customers culture, therefore I believe that by then

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people of Nova Scotia will associate JU as the coffee of Nova Scotia. This can also tie
into the retail branding as people will then be buying an experience of Nova Scotia.

The third part of my strategy is to maintain once these units are open and monitor
performances whilst building awareness. At this stage I believe that JU should be
equipped to enter the Canadian mainland market as the brand will be strong enough
to compete outside of Nova Scotia and awareness will be high enough to open stores
in larger cities thus the fourth step.
I feel that this strategy will be effective as it is long term and cost conscious in the
short term. As suggested in the article, there is a 20,000 budget however it could
potentially be 7%of the overall revenues thus being $161,276. The latter would be
sufficient to carry out this strategy with resulting increased revues funding the new
shops.
.






Product
Maintain and Expand
Focus on coffee/Tea For Expansion
Promotion
Loyalty Scheme
Price
Maintain Price
Place
Continue Retail Channels
More Coffee Shops
Just Us!

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7.0 Bibliography
Books:

Dess G.; Lumkin G. & Taylor L. 2004. Strategic Management, Text and Cases, McGraw-Hill.

Doyle & Stern, (2006), Marketing Management and Strategy, 4
th
Ed., Prentice Hall.
Keller, (2008), Strategic Brand Management, 3
rd
Ed., Pearson Education.
Murray & ODriscoll, (1996), Strategy and Process in Marketing, Prentice Hall.
Ries,A. and Trout, J., (2001), The marketing classic positioning: the battle for your mind, McGraw
Hill.
West, Ford & Ibrahim, (2006). Strategic Marketing, Oxford Publishing.
Wilson, R. And Gilligan,C., (2005), Strategic Marketing Management (3
rd
Edition), England: Elsevier
Butterworth-Heinemann.

Journals:
Bawa, K., Shoemaker R., (2004) The Effects of Free Sample Promotions on Incremental Brand
Sales, Marketing Science, Vol. 23, No. 3, pp. 345-363.
Bergen, M., and Peteraf, M., (2002), Competitor Identification and Competitor Analysis: A Broad-
Based Managerial Approach, Managerial and Decision Economics, Vol. 23, No. 4/5,
Fan, Y. (2005) Ethical branding and corporate reputation, Corporate Communications: An
International Journal, Vol. 10.
Hanas, J., (2008) Going Green, Marketing News, 2/1/2008, Vol. 42 Issue 2
Hughes, G. and Fill, C., (2007), Redefining the nature and format of the marketing
communications mix, Marketing Review, Vol. 7, Issue 1, pp45-57.
Iriberri, A. and Leroy, G. (2009) A life-cycle perspective on online community success.
ACM Computer Survev.41, 2, Art. 11.

Sherman, A. (2003), Growth through Joint Ventures and Strategic Alliances, Fast track Business
Growth, Chapter 21.
Wakolbinger,L., Denk, M. and Oberecker,K., (2009), The effectiveness of combining online and
print advertisements, Journal of Advertising Research, Vol. 49, Issue 3, pp360-372.


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8.0 Appendices

Appendix A: Bergen and Peteraf (2002) Mapping Competitors



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Appendix B: Pest Analysis

Political: As highlighted throughout the case, a huge political factor involved in the
industry was the certified recognition of actual fair trade and the whole process.
Economic: The economic environment is constantly changing and as we can see from the
case, some competitors are providing partially organic ranges as well as
mainstream organic coffees. JU pricing is at a slight premium and in the current
environment; disposable income of consumers can play a large role in choosing a
product. JU must be aware that a consumers feeling toward one product may be
influenced by their income, regardless of how strong they feel about fair trade.
Social: As mentioned in the case, the overall coffee experience seems to be a large part
of the attractiveness of JU and competitors. Any future strategy must be
designed with this experience in mind rather than expanding rapidly and
diminishing the experience factor.
Technology: Technology is constantly evolving and JU can seize a significant advantage by
utilizing technology more. JU needs to examine the improvements technology
can make in the manufacturing process and in their advertising.
Pest
Analysis
Political -
Fair Trade
Economic
-Climate
Social-
Experience
Technology-
Evolving
Manufacturin
g Technology

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Appendix C: Porters 5 Forces



Threat of New Entrants: Threat of New Entrants is high within the market as there
are very few barriers to entry and fair trade coffee trends
are extremely popular so it is an attractive industry.

Buyer Power: Buyers threaten an industry by forcing down prices,
bargaining for higher quality or more services, and playing
competitors against each other (Dess et al 2004:53). As
mentioned in Appendix B-PEST, the customers income
plays a huge role in selecting a product therefore if they
decide to bypass fair trade products because of the
premium price they can hold allot of buyer power, thus
making buyer power in the industry high.
Competitive
Rivalry HIGH
Threat Of
New Entrants
HIGH
Buyer Power
HIGH
Supplier
Power LOW
Substitutes
HIGH

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Threat of Substitutes: There are various substitutes for fair trade coffee in the
industry such as regular coffee, tea etc but not only coffees
but in the general beverages market e.g. Coca Cola, Water
etc. As a result of this there is a very high threat of
substitutes.

Supplier Power: Supplier power is relatively low as the industry is fair trade
coffee. From previous knowledge, coffee suppliers were
being exploited and continued to produce. It is simply
because of the willingness to partake in fair trade that they
have gained power. However I still believe that due to the
underdevelopment of the producing countries allot of the
power still lies with the buyers.

Competitive Rivalry: Competitive rivalry is relatively high as seen in previous
competitor analysis. There are many competitors in the
local market and on the shelf within the mainstream
markets.


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Appendix D: Value Chain Analysis
The Value Chain is a method that can be used to analyze JUs internal environment. Porter
(1980) created a generic value chain model which listed activities that could be found in most
firms. These activities can be divided into primary and support activities, which aim to create
value for customers, whilst exceeding the cost of such activities.


The primary activities create value for customers. These activities consist of inbound
logistics, operations, outbound logistics, marketing and sales, and service. At JU, some
primary activities include importing the coffee beans, manufacturing process,
packaging, coffee shop service itself, customer service etc.. These primary activities are
supported by JUs infrastructure e.g. Coffee Shop Manager Etc. Appendix 2 of Case Study.
The support activities are responsible for facilitating and enhancing the primary
activities. The profitability of JU depends on the relationship between these primary and
support activities. The value chain can help JU define their core competencies. It can
also be reconfigured in order to gain a competitive advantage. This reconfiguration
involves analysing the operating costs and assets that are required for each individual
activity in the value chain. By reviewing the costs associated with each activity, JU can

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Strengths
Loyal Base
Customer
Engagement
Multiple Channels
Reasonably Strong
Brand
Weaknesses
Shops Too
Concentrated
Low Marketing
Spend
Opportunities
Potential for Nova
Scotia dominance
New Fair Trade
Products
Social Media/Online
Threats
High Competition
Starbucks
Lack of clarity on
FairTrade
Clouded Focus
determine which activities are sources of cost advantage or disadvantage when
compared to competitors. An example for JU could be to outsource the packaging
element of their process to save on costs.



Appendix E: SWOT











Strengths:
Loyal Customer Base; JU have built up a loyal satisfied customer base and this is a
very important asset to the company
Customer Engagement: As their stores are quite quirky JU also partakes in a lot of
social initiatives and therefore that is one of the core
strengths of the brand

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Multiple Channels; as the company is a wholesaler also they are using multiple
channels which increases revenue streams. However this
can be a threat also.
Strong Brand: JU has reasonably strong brand recognition within the
maritime states and this again is a crucial asset to the
companys future strategies.
Weaknesses:
Shops Concentrated: As mentioned in analysis, shops are very concentrated and
thus limits audience and reach.
Low Marketing Spend: At present there is a very low marketing budget spend and
this attitude will prove a weakness if it continues for JU.
Opportunities:
Nova Scotia Dominance: There is an opportunity for JU within the local market for
increased market share as they re one of the leading
recognizable brands and have a foothold already.
New Fair trade products: With more and more fair trade products becoming readily
available a huge opportunity to increase the product
portfolio is on the horizon for JU
Social Media/Online: The online environment presents JU with a huge
opportunity to increase brand awareness, engagement and
utilize its loyal customers feedback at a very low cost.
Threats:

High Competition: As mentioned in earlier analysis, there is high competition
in the industry and also a high threat of substitutes.
Without significant value proposition and differentiation JU
could become a victim to substitutes or competitors.

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Starbucks: Starbucks introduction to Nova Scotia and their new
organic line poses a huge threat for JU as their resources
are far more than JUs and so Starbucks could soon
dominate local market.
Clarity on Fair Trade: An issue highlighted in the case was that of clarity and
regulation on fair trade. It is to be seen that the fair trade
term is been thrown around too commonly and applied to
every product, thus potentially reducing effect of one of JUs
key USPs.
Clouded Focus: At the moment JU are using multiple channels of
distribution however with various challenges on the
horizon a decision needs to be made on a strategy.
Operating and managing two separate strategies can create
a clouded vision within the company and a decision needs
to be made on prioritization.












Appendix F: Aekers Model

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