A

Marketing
Project Report on
“THIRD WAVE COFFEE”

SUBMITTED BY:
29125- Nikhil Asopa
29131- Nived Kannan
29140- Pat B Moyalan
29155- Priyanshi Vachhani
29166- Riddhi Jain
29172- Roshan Joseph

Project Guide:
Ms. Vinitha V
 CONTENTS

SL HEADING
No

1 INTRODUCTION
2 ABOUT THE COMPANY
3 ABOUT THE INDUSTRY
4 BACKGROUND
5 OBJECTIVES
6 NEED
7 WANT
8 DEMAND
9 ENVIRONMENTAL ANALYSIS
10 SWOT
11 STP
12 EXCHANGE AND RELATIONSHIPS
13 4 Ps OF MARKETING MIX
14 CRM TECHNIQUES USED
15 MARKET ORIENTATION
16 STRATEGIES USED
17 RECOMMENDATIONS
18 CONCLUSION
 INTRODUCTION

What comes to your mind when you hear the word “Coffee”?
A milk coffee, a Nescafe sachet or a filter coffee? Yes, but brands like Third Wave
Coffee, Blue Tokai, Slay Coffee have changed the face of coffee industry. Despite
Indians having a palette for sweet coffees, such brands have been able to develop
a palette for seemingly bitter black coffees. But if we dive deep into the black
coffee scene, we understand that there are flavors packed in black coffee due to
the
microclimatic conditions where coffee is grown, roasting techniques used &
brewing methods employed to brew a cup of specialty black coffee. Let’s try
understanding the flavor profiles on which the entire specialty coffee industry is
thriving.
The rise of Third Wave Coffee in the ever-changing coffee market has changed
our perception of and appreciation for our morning cup of joe. This marketing
report explores the nuances of Third Wave Coffee as a brand, breaking down the
essential components that have propelled its ascent to prominence and identifying
the elements that appeal to modern coffee lovers.
Fundamentally, Third Wave Coffee is more than just a drink; it's a cultural
movement, an ode to skill, and an investigation of various flavor profiles. This
movement emphasizes the distinctive qualities of each coffee bean, the openness
of the sourcing process, and the skill involved in roasting and brewing. As people
look for a more meaningful connection with their daily routines, Third Wave
Coffee has become a shining example of excellence.
 ABOUT THE COMPANY

Third Wave Coffee was established in 2014 by Ajay Rao and Laxman Rao in
Bangalore, India. Third Wave Coffee is a coffee roaster and cafe chain that
sources its coffee beans from single-origin farms around the world. The company
roasts its coffee beans in small batches in order to preserve their flavor. Third
Wave Coffee cafes offer a variety of coffee drinks, as well as tea, pastries, and
other snacks. The company has since expanded to several other cities in India,
including Delhi, Mumbai, and Pune. Third Wave Coffee has been credited with
helping to popularize specialty coffee in India. The Third Wave Coffee movement
began in the United States in the early 1990s. It is characterized by a focus on
high-quality coffee beans, small-batch roasting, and brewing methods that
highlight the unique flavors of the beans. The movement has been credited with
helping to improve the quality of coffee in the United States. Third Wave Coffee
is a member of the Specialty Coffee Association of America (SCAA). The SCAA
is a non-profit organization that is dedicated to promoting the highest quality
coffee in the world.

ABOUT THE INDUSTRY

The coffee industry, once dominated by mass-produced, instant blends, has

undergone a significant shift in recent decades. This transformation is largely
attributed to the emergence of third-wave coffee, a movement emphasizing high-
quality beans, ethical sourcing, and meticulous brewing methods. This report
delves into the world of third-wave coffee, exploring its origins, defining
characteristics, and impact on the broader coffee industry. Third-wave coffee has
created a demand for specialty beans, leading to a focus on quality production
and sustainable farming practices. Third-wave coffee has fueled the growth of
independent coffee shops offering a curated coffee experience and artisanal coffee
beverages.
Specialty Coffee Industry - With a projected valuation of USD 21,916.2 million
in 2022, the specialty coffee market is projected to expand at a compound annual
growth rate (CAGR) of 11.3% between 2023 and 2030. Speciality coffee has
become increasingly popular in recent years, and there are several reasons behind
this growing interest. A emphasis on sustainability, shifting consumer
preferences, and the influence of millennials—who have a great fondness for
coffee consumption—are a few of these causes. The rising number of coffee
shops, ready-to-drink (RTD) specialty coffee, and cold brew and nitro coffee are
some of the most recent trends in the worldwide specialty coffee business.
Furthermore, market vendors are finding that the growing demand for specialty
coffee variants presents an opportunity.

In order to boost profits, vendors are concentrating on expanding their brands,

diversifying their product offerings, and introducing new tastes. As an example,
the Swiss coffee company CoffeeB created a new variety of compressed coffee
balls in September 2022, referring to them as "the next generation of single-serve
coffee". It creates a shape-retaining capsule by using novel seaweed-based
material wrappers rather than aluminum or plastic ones.

BACKGROUND

From the practical, mass-produced blends of the past to the artisanal, specialty
coffee experiences that characterize the present era, the coffee industry has
undergone a remarkable evolution. Third Wave Coffee is a break from
conventional coffee paradigms, emphasizing authenticity, quality, and a
comprehensive understanding of the coffee journey from bean to cup.
 MEASURABLE AND ACHIEVABLE MARKETING
OBJECTIVES FOR THIRD WAVE COFFEE

Objective 1: Increase Brand Awareness and Customer Acquisition:

Metric: New customer acquisition, website traffic, social media followers
Target: Increase new customer acquisition by 15% within 6 months. Grow
website traffic by 20% and social media followers by 10% within the same
timeframe.
Strategies:
Run targeted online ads (social media, search engines) highlighting Third
Wave's unique selling points (USPs) - ethically sourced, delicious coffee, focus
on detail.
Partner with local influencers for reviews and promotions.
Offer referral programs to incentivize existing customers to spread the word.
Launch engaging social media campaigns with interactive content (polls,
contests) to attract new audiences.

Objective 2: Drive Customer Engagement and Loyalty:

Metric: Repeat customer rate, customer lifetime value (CLTV), social media
engagement (likes, comments, shares)
Target: Increase repeat customer rate by 5% within 6 months. Improve CLTV by
10% within the same timeframe. Boost social media engagement by 20%.
Strategies:
Implement a loyalty program with rewards for repeat purchases.
Host in-store events like coffee tastings, brewing workshops, or live music
nights.
Offer exclusive promotions and discounts to loyal customers via email
marketing.

Objective 3: Promote Ethical and Sustainable Practices:

Metric: Website traffic to sustainability information pages, social media
engagement on sustainability posts.
Target: Increase website traffic to sustainability information pages by 10%
within 3 months. Achieve a 15% rise in social media engagement (likes, shares,
comments) on sustainability-focused posts.
Strategies:
Create dedicated content (blog posts, videos) showcasing Third Wave's
commitment to ethical sourcing and sustainability.
Partner with local sustainable businesses for cross-promotion opportunities.
Highlight fair-trade certifications and origin stories of coffee beans on
packaging and in-store displays.
 NEED

1) Physiological Needs:
Coffee is not a physiological need in the strict sense, as it is not essential for
survival in the way that basic necessities like food, water, and shelter are.
However, some people may feel that they depend on coffee for various reasons,
and it can have physiological effects on the body.

Caffeine Dependence: Coffee contains caffeine, a natural stimulant that can lead
to physical dependence in some individuals. Regular consumption of caffeine can
lead to the development of tolerance, where the body becomes accustomed to a
certain level of caffeine and requires more to achieve the same effects.
Withdrawal symptoms, such as headaches and irritability, can occur in individuals
who abruptly stop or reduce their caffeine intake.

Stimulant Effects: Caffeine is known to stimulate the central nervous system,

leading to increased alertness and reduced feelings of fatigue. Many people rely
on coffee to help them stay awake and focused, especially in situations that
require prolonged attention or concentration.

Routine and Ritual: The act of drinking coffee can become a daily ritual and
part of a person's routine. For some individuals, the absence of this ritual can lead
to feelings of discomfort or a sense that something is missing from their day.

Social and Cultural Aspects: Coffee often plays a significant role in social and
cultural contexts. Meeting for a cup of coffee is a common social activity, and
coffee breaks are a part of workplace culture. The psychological comfort derived
from these social aspects may contribute to the perception of coffee as a
physiological need.
While coffee is not a true physiological necessity, it has become deeply ingrained
in the daily lives of many people, and its effects on mood and alertness can create
a perceived dependence for some individuals. It's important to note that moderate
coffee consumption is generally considered safe for most people, but excessive
intake can lead to negative health effects.
2) Esteem Needs: While coffee itself is not directly linked to esteem needs, the
act of coffee drinking can be associated with certain aspects of self-esteem and
social status. Here are a few ways in which coffee consumption can be related to
esteem needs:

Social Status and Rituals: In some cultures and social circles, coffee
consumption is associated with certain rituals and behaviors that can enhance
one's social status. For example, participating in coffee culture, appreciating
different coffee varieties, or brewing specialty coffee can be seen as a sign of
sophistication and cultural refinement.

Coffee Enthusiasts and Identity: For individuals who are passionate about
coffee, being knowledgeable about different coffee types, brewing methods, and
flavor profiles may contribute to a sense of identity and expertise. Being able to
discuss and appreciate coffee on a deeper level within a community of coffee
enthusiasts can contribute to feelings of self-worth and esteem.

Coffee often serves as a social lubricant, providing opportunities for people to

come together, share experiences, and engage in conversations. Being part of
social interactions, whether it's a coffee break with colleagues or meeting friends
at a coffee shop, can contribute to a sense of belonging and social acceptance,
which are important components of esteem needs.
While the act of drinking coffee itself may not directly fulfill esteem needs, the
social and cultural aspects surrounding coffee consumption can play a role in
shaping individual perceptions of self-worth, accomplishment, and identity. It's
important to recognize that these associations can vary widely among individuals
and cultures.
 WANT

1)Personilization & Customization: Coffee can be seen as a product that allows

for personalization and customization in various aspects. Here are ways in which
coffee aligns with the desire for personalization and customization. Many coffee
shops offer customization options for customers, allowing them to choose
specific coffee blends, types of milk, flavorings, and more. Customization in
ordering allows individuals to tailor their coffee to meet their exact preferences.

2)Status Want: Drinking specialty coffee can be associated with status for
several reasons, and the perception of specialty coffee as a status symbol often
ties into cultural and social factors. Specialty coffee is often associated with
higher quality and rarity. The beans used in specialty coffee are typically of a
higher grade and are sourced from specific regions known for producing
exceptional coffee. The rarity and exclusivity of these beans contribute to the
perception of specialty coffee as a premium product.
3)Social Want: Specialty coffee shops often contribute to a specific café culture
that is trendy and stylish. The ambiance, design, and aesthetics of specialty coffee
shops can attract a certain clientele seeking a unique and upscale experience.
Being a patron of such establishments can convey a sense of being part of a
fashionable and status-conscious lifestyle.

DEMAND

1)Community and Coffee Culture: Third wave coffee has come to be associated
with a unique coffee culture that emphasizes shared experiences and
community. Customers frequently want a sense of community with others who
value the art and science of coffee, rather than merely a transactional exchange.
2)Education and Awareness: There is a growing need for information regarding
the history, cultivation, and brewing methods of coffee. Third wave coffee
companies frequently satisfy this need by offering details on their products via
their websites, in-store events, and packaging.
3)Aesthetics and Ambience: The desire for a more sophisticated coffee
experience reaches the brand's or coffee shop's aesthetics. In order to improve
the overall customer experience, third wave coffee shops frequently make
investments in designing warm and inviting spaces with careful attention to
detail, ambience, and knowledgeable staff.
 ENVIRONMENTAL ANALYSIS

MICRO ENVIRONMENTAL FACTORS-

Micro environment refers to the environment which is in direct contact with

company and affects the routine activities of business straight away. It is a
collection of forces or factors that are close to the organization and can
influence the performance as well as the day to day activities of the firm. Six
components of micro environment are: Company, Suppliers, Marketing
Intermediaries, Competitors, General Public and the Customers.
Sure, here's the converted text tailored for a coffee brewing shop:

1] Company-
Within our coffee brewing shop, various groups contribute to our operations and
success. From our top management to finance, operations, human resources, and
research and development (R&D) teams, each plays a vital role in shaping our
marketing strategies. Close collaboration with these departments allows us to
make decisions aligned with broader strategies and plans. While our marketing
team takes the lead, other departments such as manufacturing, finance, legal,
and human resources also prioritize understanding customer needs and creating
value for them.

2] Suppliers-
Suppliers are crucial partners in our coffee brewing journey. They provide us
with essential inputs like high-quality raw materials, equipment, and tools
necessary for our operations. Ensuring the reliability and quality of our
suppliers is paramount for the smooth functioning of our business. Our
marketing managers maintain control over supplier availability and costs to
prevent any disruptions that could impact our sales and customer satisfaction.
3] Marketing Intermediaries-
In our coffee brewing business, marketing intermediaries play a vital role in
reaching our customers effectively. These intermediaries include individuals or
firms that assist us in promoting, selling, and distributing our products to our
valued customers. Whether it's middlemen connecting us with customers,
physical distribution firms aiding in warehousing and transportation, or
marketing service agencies providing market research and advertising expertise,
each intermediary contributes to our success.

4] Competitors-
Competition is an integral part of the coffee brewing industry. To thrive, we
must consistently provide greater value and satisfaction to our customers
compared to our competitors. Our marketing efforts not only focus on meeting
customer needs but also aim to gain a strategic advantage by positioning our
products effectively in the market, setting us apart from the competition.

5] Customers-
At the heart of our coffee brewing shop are our customers. Building strong
relationships with them is our top priority. We strive to engage our target
customers effectively and cater to their needs across different markets, including
consumer markets, business markets, government markets, reseller markets, and
international markets, ensuring that every cup of coffee we brew delights and
satisfies our diverse customer base.

MACRO ENVIRONMENTAL FACTORS-

Macro environment refers to the major external and uncontrollable factors that
influence the decision making of an organization. A company does not operate
alone in its business environment, but operates in a larger context. It comprises
of forces that provide opportunities, but at the same time also pose threats to
company. Six components of macro environment are Demographic, Economic,
Natural, Technological, Political and Cultural environments.
1] Demographic Environment-
Understanding the demographic landscape is vital for Cafe Third Wave Coffee's
success. Demography delves into population dynamics encompassing size,
density, age, location, gender, race, occupation, and more. Marketers keenly
analyze this environment as it encapsulates the driving force behind market
development: people. The rich tapestry of diverse demographics presents both
opportunities and challenges for our business.

2] Economic Environment-
The economic milieu significantly impacts consumer purchasing power and
spending patterns, pivotal considerations for Cafe Third Wave Coffee. For
instance, before venturing into exporting, scrutinizing the spending habits of a
target country's citizens is essential. Economic indicators such as GDP, GNI,
import duty rates, unemployment, inflation, spending patterns, and disposable
personal income shape our strategic decisions.

3] Natural Environment-
Cafe Third Wave Coffee acknowledges the importance of the natural
environment, which furnishes resources essential for our operations and is
influenced by our activities. Heightened environmental consciousness
underscores the significance of ecological conditions. Examples include air and
water pollution, floods, and droughts, which necessitate mindful consideration
in our endeavors.

4] Technological Environment-
In navigating the technological landscape, Cafe Third Wave Coffee conducts
thorough research on technology adoption and usage patterns. Understanding
technology penetration and user interface preferences guides our
communication and campaign strategies. Adapting to evolving technological
trends ensures our relevance in the market.

5] Cultural Environment-
The cultural milieu profoundly shapes societal values, preferences, perceptions,
and behaviors, crucial considerations for Cafe Third Wave Coffee. Appreciating
cultural nuances is imperative for effective marketing decision-making. Failure
to grasp foreign cultures can result in cultural missteps, underscoring the
importance of cultural sensitivity in our endeavors.

SWOT ANALYSIS

1] Strengths:
Premium and Artisanal Brand Image: Third Wave Coffee has carved a niche for
itself by focusing on high-quality, ethically sourced coffee beans and brewing
methods. This attracts coffee connoisseurs who appreciate the finer details of a
cup.
Focus on Customer Experience: Third Wave Coffee goes beyond just a cup of
coffee. They aim to create a warm, inviting environment that fosters a sense of
community and allows customers to linger and enjoy the experience.
Ethical and Sustainable Sourcing: Their commitment to ethical and sustainable
sourcing resonates with environmentally conscious consumers who are willing
to pay a premium for responsible practices.
Growing Presence: With over 90 cafes across 6 cities in India, Third Wave
Coffee is establishing a strong regional presence.
Third Wave Coffee has created a premium and artisanal brand image. It attracts
people seeking a refined coffee experience with an exclusive and focused
environment.

2] Weaknesses:
Limited Reach: Compared to larger chains, Third Wave Coffee has a smaller
footprint, limiting its accessibility to a broader audience.
Higher Price Point: The focus on premium coffee and experience translates to a
higher price point, potentially excluding budget-conscious consumers.
Limited Menu: Their focus on coffee excellence might come at the expense of a
wider food and beverage menu, which some customers might prefer.
The premium positioning of Third Wave Coffee may limit accessibility for a
broader audience, which might restrict its market share growth. Sourcing high-
quality coffee can also increase the cost price, affecting the profits in case of
economic fluctuations.

3] Opportunities:
Expansion: Third Wave Coffee has the potential to expand to new cities and
regions in India, catering to a growing market of coffee enthusiasts.
E-commerce Platform: Developing a strong e-commerce platform can allow
them to sell their coffee beans, merchandise, and brewing equipment to a wider
audience beyond their cafes.
Partnerships: Collaborations with local businesses, roasters, or even events
could create a buzz and attract new customers.
Sustainability Initiatives: Highlighting their ethical and sustainable practices
through marketing and educational campaigns can attract environmentally
conscious consumers.
Third Wave Coffee can consider broadening its market by creating awareness
through educating customers about specialty coffee. It can also introduce
innovative and limited-time offerings to attract a wider audience while
maintaining a sense of exclusivity.

4] Threats:
Competition: The coffee market is becoming increasingly competitive, with
established chains and new entrants vying for market share.
Fluctuations in Coffee Bean Prices: The price of coffee beans can be volatile,
impacting their bottom line and potentially forcing price hikes.
Changing Consumer Preferences: Consumer preferences in the coffee industry
can evolve rapidly. Third Wave Coffee needs to stay adaptable to maintain its
appeal.
Established competitors in the premium coffee segment challenge Third Wave
Coffee’s market share. It also does not have a diverse menu and might lose out
on customers who do not prefer coffee. Economic fluctuations can also impact
consumer spending on premium products.
 STP

Targeting:
Age Group Insights
In the early 2000s, coffee culture began experiencing a change. There was a new
wave of transformation taking over — a shift from big coffee chains to smaller,
specialty coffee houses. Consumers wanted to know where their coffee was
coming from and who was making it.
Third Wave Coffee has targeted the age group between 18-24. The growing
popularity of specialty coffee, culture of café meetings, working from café among
this category is attributed to the growing interest in food and beverage, value of
authenticity and unique experiences, focus on health and sustainability, and the
impact of social media and digital technology.
The age group between 25-39 is estimated to expand at a CAGR of about 12.0%
during the forecast period. This segment has witnessed immense popularity over
the past few years. As people of this age bracket are more open to experimenting
with new tastes, brewing methods, and coffee origins, which specialty coffee
readily provides. Moreover, specialty coffee also offers a wide range of
customization options, allowing individuals to tailor their coffee experience to
their preferences, making it more appealing to this demographic.

“Such a cool place to work from”

1) Coffee Enthusiasts:
• Characteristics: As the coffee market is maturing to the ne heights,
individuals with a deep appreciation for coffee as a craft and who
seek unique, high-quality beans are the major target market. They
are likely to experiment with different brewing methods and are
interested in learning about the origin and processing of coffee.
• Targeting Strategy: Craft marketing messages that highlight the
distinct flavor profiles of single-origin beans, the artisanal roasting
process, and the diverse brewing methods available.
 2) Conscious Consumers:
• Characteristics: Consumers who prioritize ethical, mindful and
sustainable practices in their purchasing decisions. They are
interested in the transparency of sourcing, fair trade, and
environmentally friendly initiatives.
• Targeting Strategy: Emphasize the brand's commitment to ethical
sourcing, fair compensation for farmers, and environmentally
sustainable practices. Highlight certifications and partnerships that
align with these values.

3) Adventurous Palates:
• Characteristics: Individuals who enjoy exploring new and unique
flavors. They are open to trying different coffee varieties, including
limited editions and micro-lots.
• Targeting Strategy: Introduce and promote limited edition or
experimental coffee offerings. Use creative and descriptive language
to evoke the diverse flavor profiles of the beans.
The market segmentation of Third Wave Coffee is typically divided into four
variables - demographic, geographic, behavioral, and psychographic. These
variables will be the basis for specifying a company's target market. Every
company has various variables for its marketing strategy; however, since Third
Wave is an Indian company, it is proper to tackle several categories within Indian
context.

Segmenting:

In our exploration, 6 segments of coffee consumers are identified and

described:

1) "responsible, aspiring to be connoisseurs",

2) "loyal coffee enthusiasts",
3) "pragmatic users",
4) "coffee laypersons",
5) "sophisticated connoisseurs",
6) "consumerists, connoisseurs, but not at any price"
The third wave coffee movement emerged in the early 2000s and has continued
to thrive until the present day. Its central tenet is sustainability and ethics,
whereby the emphasis has shifted towards procuring coffee beans from small,
independent farmers who receive fair compensation for their produce.
Additionally, this movement has ushered in novel brewing techniques that
highlight the inherent flavors of coffee.
Third-wave coffee uses psychotropic segmentation, which is a marketing
strategy based on altering a consumer's mood or perception.
Focus on Experience: Third-wave coffee shops create a specific ambiance.
Modern decor, minimalist design, and carefully curated music all contribute to a
sensory experience that evokes feelings of sophistication, discovery, and
appreciation for the craft of coffee.
Psychographic Segmentation: They target specific customer mindsets. This
could be people who value quality and are willing to pay a premium for
ethically sourced, single-origin beans. They might also target customers who
enjoy the ritual and social aspects of coffee, creating a space for conversation
and connection.
Emotional Connection: Third-wave coffee shops connect coffee with
emotional well-being. The focus on fresh ingredients, precise brewing methods,
and knowledgeable baristas creates a perception of a healthier, more mindful
coffee experience.

Positioning:

Third Wave Coffee positions itself as a premium and artisanal coffee brand
with an emphasis on the quality and origin of its coffee beans. It focuses on the
craftsmanship of brewing and delivering a distinct coffee experience.
It caters to people who appreciate the best of coffee, from bean to cup. It targets
premium coffee drinkers. The exclusive and minimalist ambiance invites people
who are seeking a tranquil and focused environment. This makes it ideal for
professionals seeking to work while sipping on handcrafted coffee. Third Wave
Coffee addresses the demand for a more premium coffee experience.

Positioning is considered the last stage among the three pillars of marketing
strategy. Positioning a product in the market entails a strategic approach that
involves marketing a brand to create and nurture an image in the customers'
minds within the target market.
In Third Wave Coffee' case, the company has created a unique market
positioning so that they effectively distinguish their products from the
competing brands and provide them with an excellent strategic edge in their
target markets. The company's positioning strategy is customer-based, giving
more than what the customer needs. Besides producing great coffee, it promotes
a good reputation to its target market through excellent store ambiance,
environmental protection, and social commitment. As a result, customers will
feel that they also contribute to nature and society by using the products Third
Wave Coffee offers.
Every coffee chain has free Wi-Fi services and a comfortable place where
customers can rest or study. The company also goes out of its way to promote
social responsibility as it focuses on the community.
 EXCHANGE AND RELATIONSHIPS

1) Fair and Direct Trade:

Principle: Third Wave Coffee emphasizes fair and direct trade
relationships with coffee producers. This involves paying a premium for
high-quality beans and establishing direct connections with farmers.

Benefits: The exchange is not just monetary; it involves a mutual

understanding of the value of quality coffee. Third Wave brands
recognize and compensate farmers for their dedication to producing
exceptional beans.

2) Direct Consumer Interaction:

Approach: Third Wave Coffee shops encourage direct interaction between
baristas or staff and customers. This might include discussing coffee
choices, recommending brew methods, and sharing information about the
beans.

Benefits: Personalized interactions create a more intimate and memorable

experience. Customers feel valued, and the relationship extends beyond a
simple transaction to a genuine connection with the brand.

3) Storytelling and Brand Narrative:

Approach: Third Wave Coffee brands often tell a compelling story about
their journey, values, and the people involved in the coffee-making
process. This narrative creates an emotional connection with customers.

Benefits: The relationship becomes more than a buyer-seller dynamic; it

becomes a shared narrative. Customers feel a connection to the brand's
mission and values, fostering loyalty and advocacy.
 4 P’s OF MARKETING MIX

The marketing mix, often referred to as the 4 Ps, is a framework that businesses
use to develop a strategic approach to marketing. The 4 Ps represent the key
elements of a marketing strategy: Product, Price, Place, and Promotion. Let's
explore how these elements apply to Third Wave Coffee:

1. Product
➢ Specialty Coffee Beans:
Description: Third Wave Coffee brands focus on offering specialty coffee beans
sourced from specific regions or farms. These beans are often single-origin,
emphasizing unique flavors, aromas, and quality.
Key Features: High-quality beans, distinct flavor profiles, transparency in
sourcing, and often a focus on sustainable and ethical practices.
 ➢ Artisanal Roasting and Brewing:
Description: The product offering extends beyond the beans to the craftsmanship
of roasting and brewing. Third Wave Coffee emphasizes artisanal methods to
bring out the optimal flavors in the coffee.
Key Features: Meticulous roasting techniques, alternative brewing methods (e.g.,
pour-over, AeroPress), and a commitment to the art and science of coffee
preparation.
➢ Limited Editions and Micro-Lots:
Description: Third Wave Coffee brands may introduce limited edition or micro-
lot coffees, providing customers with unique and exclusive options.
Key Features: Rare and small-batch releases, often showcasing experimental or
high-scoring beans, creating a sense of exclusivity.

2. Price
➢ Premium Pricing:
Description: Third Wave Coffee is positioned as a premium product, reflecting
the emphasis on quality, transparency, and craftsmanship.
Pricing Strategy: Higher prices compared to mass-market coffee products,
justified by the unique and superior quality of the coffee beans and the overall
coffee experience.
➢ Subscription Models:
Description: Some Third Wave Coffee brands offer subscription services,
allowing customers to receive regular shipments of freshly roasted beans.
Pricing Strategy: Subscription pricing may offer discounts or added value for
customers committing to recurring purchases, contributing to customer loyalty.
3. Place
➢ Specialty Coffee Shops:
Description: Third Wave Coffee is often associated with specialty coffee shops
that provide a curated and immersive coffee experience.
Distribution Channels: Exclusive coffee shops, cafes, or roasteries that serve as
both points of sale and spaces for community engagement.
➢ Online Platforms:
Description: Many Third Wave Coffee brands leverage online platforms for
direct-to-consumer sales. This includes e-commerce websites where customers
can purchase beans and related merchandise.
Distribution Channels: Online stores, providing accessibility to a broader
audience and often including subscription services.
➢ Collaborations and Partnerships:
Description: Some Third Wave Coffee brands collaborate with other businesses,
such as restaurants or specialty food stores, to extend their reach and introduce
their products to new audiences.
Distribution Channels: Collaborative efforts to place products in complementary
businesses or retail locations.
4.Promotion:
➢ Educational Initiatives:
Description: Third Wave Coffee brands engage in educational initiatives to
inform customers about the coffee-making process, the origin of beans, and
brewing techniques.
Promotional Activities: Workshops, blog posts, social media content, and
packaging that communicates the brand's commitment to education and
transparency.
➢ Community Engagement:
Description: Building a community around the brand is a common promotional
strategy. This involves creating spaces for customers to connect, hosting events,
and fostering a sense of belonging.
Promotional Activities: Social media campaigns, events, and collaborations that
emphasize community-building and shared coffee experiences.
➢ Storytelling and Brand Narrative:
Description: Third Wave Coffee brands often tell a compelling story about their
journey, values, and the people involved in the coffee-making process.
Promotional Activities: Brand narratives communicated through websites, social
media, and packaging to create an emotional connection with customers.

In summary, the 4 Ps of Third Wave Coffee marketing reflect a focus on premium

products, a commitment to quality and transparency, a unique and immersive
customer experience, and a strategic approach to pricing and distribution that
aligns with the brand's values.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

TECHNIQUES

Third wave coffee shops prioritize customer relationships and creating a unique
coffee experience. They leverage various CRM techniques to achieve this goal:

1. Personalization:

Recognizing and remembering customers: Baristas learn regulars' names,

preferences, and brewing methods. This personalization creates a sense of
community and belonging.
Curating recommendations: Baristas suggest drinks based on individual taste and
past orders. This personalized service enhances the customer experience.
Loyalty programs: Third wave shops often offer loyalty programs with rewards
for frequent customers. This encourages repeat business and builds customer
loyalty.
2. Data-driven insights:

Utilizing CRM software: Third wave shops use CRM software to track customer
data, including purchase history, preferences, and feedback. This data is used to
personalize interactions and develop targeted marketing campaigns.
Analyzing customer behavior: Shops analyze customer data to understand
preferences, buying patterns, and peak hours. This helps them optimize inventory,
staffing, and menu offerings.
Leveraging social media data: Shops monitor social media mentions and reviews
to understand customer sentiment and address concerns. This helps them improve
their offerings and customer service.

3. Building a community:

Hosting events and workshops: Third wave shops host events like coffee
cuppings, brewing workshops, and community gatherings. This creates a sense of
community and fosters customer engagement.
Collaborating with local businesses: Shops partner with local businesses like
bakeries and artists to offer unique offerings and experiences. This creates a sense
of place and attracts customers who appreciate local collaborations.
Engaging on social media: Shops use social media to share behind-the-scenes
content, coffee stories, and customer experiences. This humanizes the brand and
builds relationships with online audiences.

4. Embracing technology:

Utilizing mobile apps: Third wave shops offer mobile apps for ordering, payment,
and loyalty points. This provides convenience and enhances the customer
experience.
Investing in digital signage: Shops use digital signage to display coffee
information, menus, and promotional offers. This keeps customers informed and
engaged.
Providing online ordering and delivery: Shops offer online ordering and delivery
services for added convenience and accessibility.

5. Focusing on transparency and sustainability:

Sharing sourcing information: Third wave shops are transparent about their coffee
sources, highlighting origin, farm practices, and sustainability initiatives. This
builds trust and connects customers with the ethical sourcing of their coffee.
Promoting responsible practices: Shops highlight their commitment to
environmental and social responsibility, showcasing compostable packaging, fair
trade practices, and community engagement efforts. This resonates with
customers who are increasingly conscious of sustainability and ethics.
 MARKETING ORIENTATION OF THIRD WAVE
COFFEE

Current Orientation:
Third Wave Coffee primarily follows a product-oriented marketing strategy. They
emphasize the quality of their coffee beans, roasting techniques, and brewing
methods. Their marketing focuses on:
Direct sourcing: Highlighting ethically sourced, high-quality coffee beans from
individual farms.
- Transparent processes: Emphasizing the meticulous roasting and brewing
methods used to bring out the unique Flavors of each bean.
- Expertise and knowledge: Positioning themselves as experts in coffee, educating
customers about different origins, roasts, and brewing methods.
- Community building: Creating a sense of community around their cafes,
attracting coffee enthusiasts who appreciate the experience.

Our Perspective on Societal Marketing:

While the current product-oriented approach has been successful, transitioning to

a societal marketing concept could further enhance their brand image and attract
a wider audience. Societal marketing focuses on meeting the needs and wants of
customers while simultaneously contributing to the well-being of society.
Here's how Third Wave Coffee could implement societal marketing:
- Sustainable practices: Emphasize their commitment to sourcing
environmentally and socially responsible coffee beans. Partner with farms that
practice fair trade, organic farming, and sustainable water usage.
- Educational initiatives: Offer workshops and seminars on coffee appreciation,
brewing techniques, and the coffee industry. Collaborate with universities and
local organizations to educate the community about responsible coffee
consumption.
- Community engagement: Support local initiatives, partner with NGOs, and
organize events that promote social good and environmental awareness. Use their
platform to raise awareness about important issues related to coffee production
and consumption.
- Transparency and accountability: Publish detailed information about their
sourcing practices, environmental impact, and social responsibility initiatives.
Encourage feedback and engage in open dialogue with customers about their
values and priorities.

Benefits of Societal Marketing for Third Wave Coffee:

- Stronger brand identity: Appeal to a wider audience of socially conscious
consumers who value ethical and sustainable practices.
- Increased customer loyalty: Build deeper relationships with customers who
share their values and appreciate their commitment to social responsibility.
- Positive public image: Gain recognition for their positive impact on society and
environment, leading to increased brand trust and goodwill.
- Attract and retain talent: Attract employees who are passionate about their
mission and want to contribute to positive change.
- Long-term sustainability: Ensure the long-term sustainability of their business
by aligning their practices with the needs and expectations of a changing society.
By transitioning to a societal marketing approach, Third Wave Coffee can not
only continue to provide high-quality coffee but also contribute to a more
sustainable and equitable future for the coffee industry and the communities they
serve. This shift will allow them to attract a broader customer base, strengthen
their brand identity, and contribute positively to society as a whole.
 STRATEGIES TO INCREASE ENGAGEMENT,
LOYALTY, AND CUSTOMER LIFETIME VALUE

Current strategy
Wave Coins: Fueling Customer Loyalty
Third Wave Coffee Roasters have introduced a unique loyalty program centered
around "Wave Coins." The concept is simple yet effective – customers receive a
10% cashback on every transaction in the form of Wave Coins. These virtual
coins can be accumulated and redeemed for various rewards within the cafe's
ecosystem.
The Wave Coins program increases customer loyalty as they are incentivized to
return to the establishment for their coffee purchases. It creates a sense of
achievement for customers as they watch their Wave Coins balance grow with
each transaction. Afterall, who doesn’t like their wallet filling up?
The exclusivity of the program is what adds to its appeal; customers must scan
the QR code at the store to be eligible for earning Wave Coins, hence making
each purchase a participatory experience.
Moreover, by requiring a minimum of 50 Wave Coins for redemption, Third Wave
Coffee Roasters encourage repeat business, as customers strive to reach the
threshold to unlock their desired reward. This strategy effectively retains existing
customers and motivates them to continue engaging with the brand.
Referrals: Building Community and Expanding Customer Base
To further amplify customer engagement, Third Wave Coffee Roasters have
employed a referral program. This program enables customers to refer to others
by sharing a unique code, which the referred individual has to manually enter
during their first transaction. As a reward for successful referrals, the customer
receives a free beverage after the referred person has completed a minimum
transaction of INR 100.
This program not only incentivizes customers to spread the word about the cafe
but also creates a sense of community. Customers turn into brand advocates in
that process, actively encouraging their friends and family to experience the
brand's offerings. This word-of-mouth marketing proves to be of tremendous
value, as it brings in new customers while reinforcing the establishment's
reputation.
Rewards: Interactive and Exciting Incentives
Third Wave Coffee Roasters' gamification strategy does not stop there. It extends
to a dedicated "My Rewards" section within their app. Here, an animated wallet
showcases customers' total savings, Wave Coins, cashback earned, and ongoing
offers. This real- time display is of great help as it keeps customers informed of
their progress, inspiring them to continue their participation.
Community Events:
Third Coffee hosts and sponsors events in the local community. This helps to
build relationships with customers and create a positive brand image.

Engaging Social Media Presence:

Third Coffee actively engages with their customers on social media. They share
photos and videos of their coffee, offer exclusive discounts and promotions, and
host contests and giveaways. This helps to build a community around the brand
and increase customer loyalty
Suggestions
Beyond the existing strategies already employed by third wave coffee shops, here
are some additional ideas to further increase customer engagement and loyalty,
ultimately boosting their lifetime value
Immersive Experiences:
Host coffee brewing workshops, cupping sessions, or farm-to-table dinners.
These immersive experiences foster a deeper connection with the coffee journey
and the brand.
Sensory Engagements:
Offer coffee aroma pairings with pastries, create unique coffee playlists, or host
artistic performances in the shop, creating a multi-sensory experience.
Subscription Service:
Offer a subscription service that gives customers access to exclusive discounts,
early access to new products, and other perks. This can help to generate recurring
revenue and increase customer lifetime value.
Partnerships:
Partner with other local businesses to offer cross-promotions and exclusive deals.
This can help to attract new customers and increase customer retention.

RECOMMENDATION

It’s now an experience where taste profiles, experimental coffees and

premiumisation is becoming prominent. Knowledge about preparation, origin
are also more frequently discussed.
But the price is still keeping this experience out of reach for many customers.
Coffee is priced in a way that it is consumed on occasion like a dessert. India
has the aspiration, but the price gap is too wide to cause a culture shift. To make
coffee habitual and not an indulgence I think it will take brand that can cater to
the mid-segment with premium quality coffee at Rs. 75-125 and a localised
menu. Maybe scaling a kiosk model could achieve this. By only investing in
quality coffee machines with none of the other overhead (AC, rent etc.), buying
coffee should become more approachable. Luckin Coffee has managed to use it
effectively in China and I think it could be effective here too.

CONCLUSION

This comprehensive report provides an in-depth analysis of Third Wave Coffee,

tracing its roots from a global movement to the establishment of Third Wave
Coffee in 2014 by Ajay Rao and Laxman Rao in Bangalore, India. The report
covers various aspects, including the company's background, the evolution of the
coffee industry, and the unique needs, wants, and demands that Third Wave
Coffee addresses.

The report highlights the strategic importance of customer value and satisfaction
in Third Wave Coffee's success, emphasizing the community-centric approach,
commitment to quality and craftsmanship, and transparency in sourcing. The 4
Ps of the marketing mix, coupled with CRM techniques, shed light on the brand's
product offerings, pricing strategies, distribution channels, and promotional
activities.

Furthermore, the report explores the current marketing orientation of Third Wave
Coffee, suggesting a potential shift towards societal marketing to align with
evolving consumer values and expectations. Targeting and segmenting strategies
focus on reaching coffee enthusiasts, conscious consumers, and those with
adventurous palates.

The strategies to increase engagement, loyalty, and customer lifetime value, such
as the innovative Wave Coins program, referral initiatives, and gamification
through rewards, showcase the brand's commitment to creating a unique and
rewarding customer experience.
The report concludes by proposing additional strategies, including immersive
experiences, sensory engagements, subscription services, and partnerships, to
further enhance customer engagement and loyalty. As Third Wave Coffee
continues to evolve in a dynamic market, these strategies aim to solidify its
position as a leader in the specialty coffee industry, appealing to a broader
audience while maintaining its commitment to quality, sustainability, and
community building.