Assessment Title: Hopkinson’s Coffee Company

Course Title: Marketing Strategy

Student Name: Areeba Amjad
Student ID: 23067549
Contents
Analysis and Evaluation...............................................................................................................................3
Marketing Strategy......................................................................................................................................4
Value Creation.........................................................................................................................................5
Increased and diversified product offerings............................................................................................5
Marry Sustainability.................................................................................................................................6
Creating an experience............................................................................................................................6
Effective utilization of resources..............................................................................................................6
Relationship Marketing...........................................................................................................................6
Collaboration with businesses.................................................................................................................6
Cost and Revenue Management.............................................................................................................7
Image and Market Repositioning.............................................................................................................7
Value co-creation....................................................................................................................................7
Strategy Canvas...........................................................................................................................................7
STP...............................................................................................................................................................8
Target Market..........................................................................................................................................8
Positioning...............................................................................................................................................8
Marketing Mix.............................................................................................................................................9
Product....................................................................................................................................................9
Price.......................................................................................................................................................10
Place......................................................................................................................................................10
Promotion..............................................................................................................................................10
People....................................................................................................................................................11
Physical Evidence...................................................................................................................................11
Process..................................................................................................................................................11
Risks and Challenges..................................................................................................................................11
Critical Reflection......................................................................................................................................12
Appendix...................................................................................................................................................13
References.................................................................................................................................................18
 Hopkinson’s Coffee Company

Analysis and Evaluation

The current position for Hopkinson’s coffee seem to be a challenging one. Where the company definitely
has some strengths up its sleeves, it finds it difficult to market them and hence many costumers fail to
acknowledge the point of differentiation which it offers. Apart from that, a current lack of innovation
and mismanagement of the costs keeps the company in an unstable position.

After a thorough analysis of the external environment, we see that the consumer and technological
trends are changing and not keeping up with these will push Hopkinson’s to eventually shut down. One
favorable factor however here tends to be the rise in demand of sustainable offerings and seeing this
gives us confidence that Hopkinson’s can sustain and compete in this market if it markets its
sustainability claims. The high prices of specialty coffee can also be justified by this so Tom should be
positive about this and should view these sustainable practices as a capability.

As there has not been a proper customer environment analysis the company is missing out on
determining customer touch-points and demands for its offerings. Additionally, we see a lack of
relational resources when it comes to customers. Tom does want to retain his customers, but
acquisition of customers is equally important and we see no such efforts aimed at customer acquisition
and this can be due to a lack of informational resources at Hopkinson’s.

Absence of effective targeting strategies leave Hopkinson’s with low customer turnouts during certain
seasons. Tom needs to take a holistic view of the external environment to determine its target market.
Additionally, we feel that the company also has weak customer-based assets and needs to develop and
implement strategies so it can enjoy a strong and sustainable position in the market.

While analyzing the products offered, we see that 90% of the company’s sales are contributed by
blended coffees, while single-origin coffees offer a 10% share to the sales. It tends to be a question mark
for the company. Analyzing the market, we see that single-origin coffees will experience a demand hike
in the coming future due to better and authentic taste. Tom needs to carefully evaluate the cost and
pricing strategy for these single origins as the cost of procurement for them seems to be high as well.

The barriers to entry in the market are low for the coffee industry and we see an increase in both direct
and indirect competition for Hopkinson’s. This also increases the customer’s bargaining power as they
have a lot of options to choose from. The establishment of a strong and sustainable competitive
advantage here would have helped Hopkinson’s create a significant and differentiated position in the
market but sadly, even after being present in the market for a significant time, Hopkinson’s has not been
able to build a distinctive and significant brand image which it can leverage, indicating insufficient
reputational resources. Since the market is hanging between growth and maturity stage, a clear point of
differentiation needs to be established. Hopkinson’s would need to aim to be in the initial consideration
set of the existing and potential customers during their decision making process. With a rise in demand

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of sustainably sourced products, Hopkinson’s can generate and then fulfil the need of its existing and
potential customers.

By roasting coffee at Hopkinson’s, Tom saves on outsourcing costs and this gives him a chance to
experiment with new blends. This can also be a source of additional profit margins for Hopkinson’s.
Analyzing the changing customer trends, where customers are becoming more cautious about product
provenance, the origin of their coffee and the entire process as well, this will give Hopkinson’s an
advantage over its competitors and will create its own uncontested spaces in the market. This also
implies that Hopkinson’s enjoys more control over its products and can craft and create new signature
blends that are available only at Hopkinson’s.

Hopkinson’s has been awarded multiple times as one of the best coffee present in UK, however, it still
needs to get certified for its sustainable efforts. In this case, effective use of marketing communication
will help Hopkinson’s build a narrative for itself. Apparently, customers do like the coffee at Hopkinson’s
but are unable to create word of mouth due to company’s lack of e-commerce presence which does not
appall or attract the potential customers.

We see that the company hires people that share the same values as that of the company, but with
sporadic promotions and no specific structure present, it can hinder employee productivity. So
Hopkinson’s not only needs to focus on its customer-based assets, but also its internal support assets.
Tom needs to analyze if the current manpower at Hopkinson’s is actually necessary as the company is
also suffering from high staff costs. An appropriate blend of technology and manpower will help
Hopkinson’s be operationally effective and cut down on its costs.

Tom also needs to evaluate what “value” means for his customers so he can create appropriate
strategies by addressing the customer pain points. Focus should not only be placed on the product
offerings but also the augmented product, the after sales services and excellent customer services to
ensure great and consistent service standards which will help build and experience owned by the
company.

Marketing Strategy

With the increase in both direct and indirect competition, Hopkinson’s needs to differentiate itself and
also needs to build strong relationships with customers so as to enhance customer loyalty. Apart from
that, the company needs to stay relevant by keeping in line with the dynamic consumer trends.

The first step here would be identifying a competitive advantage and to determine how to create value
for the customers, which would then lead us to establish a strong position in the market. Hopkinson’s
would need to adopt a resilient strategy (Collis, 2021)

Value Creation
Their needs to be a fit between the needs of the customers and the value being offered by Hopkinson’s.
A value proposition canvas helps us achieve this.

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Hopkinson’s needs to do the following to create value for its customers:

Increased and diversified product offerings

Adding additional offerings such as baked snacks and savory items apart from the current product
offerings would also help view Hopkinson’s as a holistic shop offering their customers a full snack meal.
Customers could either customize their meal or could choose from deal offerings. This is also essential as
all the competitors are already doing this and is now inevitable. The point of difference however for
Hopkinson’s here would be to bank on its heritage and exercise its sustainability claims in its additional
product offerings.

This also allows for collaborations with small firms in the industry which share the same values as that
of Hopkinson’s.

Tom can start selling limited edition single origin coffee-beans highlighting the benefits of them being
sustainably sourced and offering an authentic experience. He should also start considering takeaway
coffee and snacks as many people are short on time. It also tends to be an option offered by the
competitors. It is high time that Tom starts investing money in building an e-commerce presence and
also thinks of supplying single-origin coffee beans via various channels. He can offer an in-shop
experience or sell these limited edition coffee beans through his own website only in UK (initially). In
addition to portraying the products offered, the website can also have a dedicated section highlighting
the origin of the specialty coffee offered every month.

Marry Sustainability
Tom should make sure that sustainability becomes the essence of the company from ethical and
sustainable sourcing to eco-friendly packaging, each and every nook of Hopkinson’s should be in line
with sustainable claims so the company can create an undisputed competitive advantage for itself. This

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also translates itself in hiring staff that is completely in line with the company values and culture. All of
these tactics would be in line with the differentiation strategy (Porter, 1980). This would also help
Hopkinson’s capture the specific market where customers can not quench their thirst for sustainable
offering, hence a part of flanking strategy.

Creating an experience
Consumers now not only look for products, but also an experience which they can thoroughly enjoy.
This ranges from the ambiance, quality and consistency of the product to the service being offered. In
order to create a position for itself in the market, Hopkinson’s should also focus on experience creation.

Effective utilization of resources

A company can only differentiate itself if it capitalizes on its resources and uses them efficiently.
Customers, especially students, sitting and spending extended periods of time at the coffee place should
be seen by Tom as an opportunity to increase business. He needs to utilize the cellar as a part of the
coffee place allowing more customers to sit, enjoy and spend time.

The cellar can be transformed into a dining space and a lounge, with various charging spots,
comfortable seating and a LED so students and
professional can come and spend time with their
friends or can study in a corner. He can keep the same
rustic interior, which signifies the heritage of the
company and can add frames and other marketing
materials highlighting the sustainability efforts taken
by the company.

Relationship Marketing
According to competitive strategies outlined by (Treacy
& Wiersema, 1993) the company needs to build customer intimacy. Hopkinson’s can add onto the
relationship building efforts by creating a loyalty club for its customers. The club would not only have
current members and employees of the company but also prospective customers who want to know
more and are attracted towards the sustainable products offered by Hopkinson’s. Members of the club
not only get insights and information about the suppliers, partners and sustainable practices, but also
get tips and tricks from employees on how to brew their coffee a special way to get the most taste out
of it. This will help create customer loyalty and help Tom focus on relationship marketing, attract
tourists and other potential customers and also help Tom keep the store busy even during summers
and Christmas. There is a potential that his customers will be transformed into advocates for the brand
extending his reach aiding in marketing efforts.

Collaboration with businesses

With sustainability being the hot topic amongst industries, and consumers wanting businesses to be
more sustainable on their behalf, gives Tom another opportunity to expand in another market with his
current offerings. He can meet up with companies and discuss the opportunity of Hopkinson’s being a
potential beverage supplier for them. This will add on to the revenue for Hopkinson’s.

Cost and Revenue Management

While the sustainability efforts taken by Hopkinson’s are commendable, sourcing authentic and single
origin coffee also tends to have a higher cost. Considering that Tom personally visits and spends time at

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the small farms, this is an additional expense which can be reduced a bit not hindering the specialty
claims. My recommendation here would be to increase the single origin coffee phase from a week to a
month, so an increased number of customers can be made aware of the origin every month.

Image and Market Repositioning

Hopkinson’s needs to position itself in the market as a “sustainable specialty coffee shop”. It should
invest in marketing communication efforts so as to communicate its point of difference. Both Gen Z and
millennials are keen towards sustainability and even willing to pay extra for sustainable products.
Additionally, studies have shown that 75% of youth wants companies to be socially responsible and
want to see brands taking adept measures to ensure consumer and employee safety (Tidswell, 2023).
This gives Tom a chance to bank on this consumer trend and highlight his efforts towards sustainability
and partner wellness through social media and his own website. This will help him not only to cater to
the demand of his current consumers, but will also attract other customers who want to approach and
buy from sustainable brands.

Value co-creation
Tom can ensure value co-creation by allowing customers to be a part of the decision making process of
the new products such as snacks being offered at Hopkinson’s. This will allow the company to determine
the interest of its existing and potential consumers. Sampling and choosing the best product offerings
would help ensure value-co creation.

Strategy Canvas
Keeping in line with the above recommendations for value creation, we propose a strategy canvas for
Hopkinson’s that enables Tom to identify the factors where he needs to strengthen his position.

Strategy Canvas
High
Low

Price Sustainable Takeaway Diversified Seasonal Quality Customer

Menu Variations Service

Hopkinson's Traditional Coffee Shop

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Hopkinson’s can create a sustainable competitive advantage for itself by offering unique, high quality
sustainable blends, hence this would be the new value proposition

Using the Four Action framework, we would suggest Hopkinson’s to,

Raise: Sustainability, specialty coffee, variety of offerings, value for money, social responsibility

Create: App platform, customer communities, create welcoming spaces

Reduce: Raw material costs

Eliminate: Labor

The proposed marketing strategy for Hopkinson’s is as follows:

STP

Target Market
Tom should take a multi-segment approach and branch out of catering to students and tourists and
should also target professionals who need regular coffee runs. The company nestles in a primary
location of the city with various offices and a business center nearby. Not only this, coffee shops also
tend to be a great place for social gatherings. Offering coffee alternates would also attract non-coffee
drinkers. This would allow Tom to have an extended customer base which is also less dependent on
seasonal factors. This would allow him to penetrate in the market.

Certain proposed target market segments for a multi-segment approach would be the following:

Demographic Geographic Psychographic Behavorial

Students Bristol, UK The middle majority Drink coffee at least

The Innovators twice a week
Professionals
Openness Coffee enthusiasts
Male/ Female Conscientiousness
Extroversion Looking for sustainable
Age 16+ companies

SEC: A, B, C1, C2

Positioning
With the new value proposition developed above, Hopkinson’s aims to be a brand that offers:

“Unique, high quality sustainable blends”

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The positioning approach would be a benefits based positioning where Hopkinson’s is a brand that
every environment cautious coffee enthusiast is looking for.

Marketing Mix

Product

According to Kotler, there are 5 levels of a product ranging from the core benefit offered to the
expected product. Following are the recommended product levels for Hopkinson’s:

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Price
Hopkinson’s needs to generate profits while building its market share, for that purpose it needs to
follow these pricing strategies:

Product Pricing Strategy

Blended Coffees Competitor based pricing

Single Origin Coffees Value-based pricing

It can offer introductory prices for its unique signature blends to encourage trial amongst consumers.

Place
Hopkinson’s can adopt a hybrid channel structure. Single-origin coffee and other blends can be either
sold in the shop, over website or Tom can give exclusive distribution to retailers who are known for
sourcing sustainable products. With limited intermediaries and retailers involved, Hopkinson’s can
practice control over the channels and can also focus on developing customer relationships.

Promotion
A careful evaluation of the media consumption habits of Hopkinson’s target market would suggest us to
create a digital presence and leverage the digital landscape. The communication objectives primarily
are to raise brand awareness and to build trust. Using affective components can help tap the
environment-friendly sentiments of the potential target market. As the company already faces higher

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operational costs, it can achieve its marketing communication objectives if it utilizes the digital space
effectively.

Hopkinson’s can bank on user-generated content and referrals over the digital landscape to build trust
and to generate loyalty.

People
Considering Tom’s efforts towards hiring employees, we see that he has been careful about the kind of
individuals he wants to hire. Tom needs to focus on internal marketing so he can communicate his
future plan to his employees and the prospective and opportunities it will bring for them. This will help
employees and Tom direct their efforts in the same direction. Tom can motivate them by
communicating a new employee motivation and promotion plan once they achieve their goal.
Additionally, trainings for employees should be conducted periodically to ensure they are providing
consistent service to the customers. Employees would also be expected to follow a code of conduct.

Physical Evidence
Hopkinson’s needs to extend efforts in order to create a consumer-friendly social space where people
love to spend time. This can be ensured by having consistent marketing collateral placed throughout the
shop, provision of great customer service and by ensuring safety and cleanliness.

Process
The process at Hopkinson’s would involve customers placing their orders with the employees, who
either prepare the orders for takeaway or dine-in. Employees are also responsible for collecting
feedback. There would be standard operating procedures for all the processes.

Risks and Challenges

Hopkinson’s would face the following challenges:

 Certain recommendations would need high investments – such as in technology

 Introduction of technologies will also expose the company to cyber-security threats
 Certain employees might not feel in line with the new strategies, hence Tom would face
resistance
 There should be constant efforts to sustain the competitive advantage
 Collaborations and partnerships with other local firms can also pose a risk as compared to in-
house production.

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Critical Reflection

The framework being discussed here is “Blue Ocean Theory”. It aims to create an undisputed and
uncontested market space amongst a highly competitive industry.

Blue Ocean strategy essentially takes a customer-centric approach and focuses on customer demands.
When it comes to Hopkinson’s and Nespresso, it helped present a strategic goal and offered a way out
of the competition by differentiating the company. By taking in account the expected changes in market
trends, it allowed for us to see how these companies can keep up with the trends. Since, the new
market space is uncontested, it will give Hopkinson’s a room to experiment with various strategies as
well as to see which one better works in its favor.

Blue Ocean also helps companies to develop an extensive customer base as creating one point of
differentiation can appeal to different consumers which the company didn’t even plan to target. This
was helpful in both Hopkinson’s case, where the company needed a sustainable POD to compete and in
Nespresso’s case where the current competitive advantage was no longer sustainable and the company
needed further differentiation to justify its premium position. Operating in a new market can also enable
a company, such as Hopkinson’s to have a “first-mover advantage” as no competition exists in that
market.

However, blue ocean strategy focuses solely on ways to create a competitive advantage using the
company’s resources and therefore at times can tend to disregard the external environment of the
industry. The strategy is also time-constrained as the dynamics of the external environment are ever-
changing and so are customer preferences. This is what we experienced with Nespresso, where the
barriers to entry in the industry were low and competition was ever rising along with the increased
customer needs for ecological and sustainable products. The creation of a competitive advantage can
also not ensure success if the company does not utilize resources effectively. For a blue oceans strategy
to be effective, the employees and the rest of the stakeholders need to agree to its proposed tactics.

Where blue ocean theory helps create an uncontested market space but it doesn’t promise that this
new segment will be big enough and actually viable and profitable to be sustained for long. This also will
never suggest that the competition has ended, because competition in every industry tends to be
inevitable. This strategy also doesn’t promise that the company’s core competency would be utilized.

Another flaw here is that all companies might not have enough capital to market their value to the
consumers as the strategy focuses on creation of new value for customers. For example, Nespresso
might have enough assets and financial resources to implement blue strategy, but it will definitely be a
risk for Hopkinson’s. It also provides no guidance on how companies can generate demand for the value
they are offering, this is something that Hopkinson’s would need to figure out itself. Companies can also
be unsure whether there will be a significant return on investment as creating a new competitive
advantage can be resource extensive. Blue ocean theory also does not consider the fact that the current
resources of the company might change and the strategy would then not be helpful. Not taking a
resource based view also doesn’t ensure effective utilization of resources.

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Appendix

PESTEL:

Political & Legal:

None

Economic:

None

Socio-Cultural:

Students loved spending time at the coffee-shops

Technological:

Competitors had takeaway ordered via apps

Ecological:

Rising interest about sustainability

Growing interest among consumers for reassurance about product provenance, supply chains, and
worker welfare

Meso Environment:

Suppliers:

Most of the producers Tom buys from are small family firms and Tom knows them personally.

Competitors:

Direct and indirect competition is increasing

Customers:

Growing interest among consumers for reassurance about product provenance, supply chains, and
worker welfare

Market:

The out-of-home coffee segment was estimated to grow by 16 percent

Porter’s 5 Forces

Threat of new entrants:

Competition is high and ever increasing. The barriers to enter the market are low.

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Bargaining Power of Customers:

The bargaining power of customers is high as they have alternative solutions to choose from.

Rivalry in the industry:

Since competition in the industry is increasing, the rivalry between the industry is rising. . Starbucks,
Caffè Nero, and Costa Coffee. McDonald’s (McCafé) and the supermarkets. Significant growth in ‘artisan’
coffee shops in Bristol over the last few years. Direct competition is growing. With new entrants such as
Tim Hortons and ‘dark kitchens’ who offer takeaway coffee ordered via an app

Bargaining Power of Suppliers:

The bargaining power of suppliers is high as they offer original, authentic and high quality coffee.

Threat of substitute products

Is high

Micro Environment:

Customer based assets:

The relationship with customers’ needs development

High reputation

Competitive advantage: specialty coffee

The product and service quality high

Internal support assets:

No cost advantages

High skill and expertise

Relationships with suppliers is good

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SWOT

Strengths Weaknesses

Heritage Doesn’t offer takeaway coffee and tea

Relationship building Drop in sales at Christmas and summer
Sustainability Queues at busy hours
Employee + Partner Welfare Ecommerce presence
Sources his own coffee Higher energy costs, higher staff salaries, and
have won several awards for their coffee
higher raw material costs.
Nice customer reviews
Brand Image?
Lack of innovation

Opportunities Threats

The out-of-home coffee segment was estimated Competition by major coffee companies
to grow by 16 percent Direct competition is growing

He is encouraged to see a growing interest among

consumers for reassurance about product
provenance, supply chains, and worker welfare

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TOWS

Strengths Weaknesses

Opp SO WO

Communicate the company’s Invest in ecommerce initiatives so the company

sustainability initiatives and the employee can build its market share and capture consumers
and partner welfare projects that use apps to order coffee.

Communicate the company’s amazing Additional offerings

reviews

Threats ST WT

Build a POD being the most sustainable Expand customer base

specialty coffee shop

PLC: Growth & Maturity

Ansoff:

Market Penetration Market Development

Target Professionals Collaborate with companies

Takeaway

Product development Diversification

Add confectionary items and snacks

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Blue ocean strategy: Create a POD

Strategies for Competitive Advantages:

Differentiation: Careful sourcing and customer – relationship

Refer to resilient strategy

Market Challenger

Position Defense

SPACE: Adopt a competitive strategy.

Image repositioning

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References

Ferrell, O.C. and Hartline, M. (2012) Marketing Strategy [online]. Cengage Learning. Available
from: http://books.google.ie/books?
id=YL8JzgEACAAJ&dq=9780357516362&hl=&cd=1&source=gbs_api.

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