Marketing Planning at Just Us! Cafes free essay sample

Being an entirely fair trade company means Just Us pays its suppliers from so-called â€Å"third world† countries a fair price, including a premium for social welfare, gets into long-term contracts (equal or more then a harvest cycle) with them skipping middlemen who often absorb most of the margin and offers them additional benefits e. g. pre-payment and loans. â€Å"The fair trade movement brings together committed parties to create the â€Å"value† of social change, social development, fairness and equity through consumption by shortening commodity circuits between producers, retailers and consumers† (Low and Davenport, 2005). Fair trade concept provides a successful rapidly growing niche for such companies as Just Us, because â€Å"ethical† products, such as fair-trade and organic, are products of high involvement and imply great levels of customer engagement at the decision-making stage of buying (Alexander and Nicholls, 2006, p. 1237). The market segment of fair trade coffee is rapidly growing, but Just Us faces high competition from various types of coffee producing and selling companies as well as from cafes. Local activists consolidate their recent efforts to promote organic products and ethical consumption in their countries (Fridell, 2007, p. 237). More and more customers want to know the origin of the products they buy and prefer environmentally responsible companies. According to the ongoing changes on the market, the environmental scanning at Just Us is arguably worth any efforts spent. It may be the basic methodology for gathering and organizing marketing climate data for the new head of marketing department, as the position requires good knowledge of the situation before taking any action. That’s why it’s so important to carry out the proper situational analysis, outline the main challenges facing Just Us and analyze it’s current marketing strategy before planning the available strategic options and suggesting the course of future actions in this report written by an external marketing consultant. 2. Situational Analysis To stay tuned to the recent situation in order not to miss perspective opportunities, an organization should go on with continuous scanning of its environment. According to Jobber, environmental scanning is â€Å"the process of monitoring and analyzing the marketing environment of a company† (Jobber, 2010, p. 3). Aguilar states (Aguilar, 1967, cited in Costa, 1995, pp. 4-5) that environmental scanning serves the purpose of gathering information about the facts and events happening around the company in order to let the management lead the organization in the right direction. Most of the authors agree on the same main functio n of environmental scanning. However, there is a slightly different view on that presented by Boone and Kurtz (2011, p. 61). They argue that the main purpose of environmental scanning is to identify the present trends and the extent to which they affect the company. If any trend provides an opportunity or poses a real threat to the business, appropriate action should follow. The companies that successfully implement scanning are more likely not to miss essential information and thus to act effectively as they know â€Å"what is going on† (Slaughter, 1999, p. 442). A positive correlation was found between frequency of scans and organization’s performance, supporting the idea of conducting scanning on a compulsory basis (Heavey et al. , 2009, p. 68). That is why a significant part of actual report will be dedicated to situational analysis, which will form the basis for successful environmental scanning. . 1 Macro Environment Many authors identify four types of forces determining the macro environment in which a business operates: political/legal, economic, social/cultural and technologic. The framework that examines the listed forces towards an individual business is widely known as PEST analysis (Costa, 1995, pp. 5-6). However, rece nt evidence suggests that ecological/physical environmental forces are to be taken into account as a part of the system too, so the acronym expands to PEEST (Jobber, 2010, p. 73; Kotler et al. , 2009, p. 154). The concept is illustrated in Figure 1. Figure 1. PEEST Analysis. Source: Own development based on Jobber (2010, p. 73). 2. 1. 1 PEEST Analysis See Appendix 1. 2. 2 Microenvironment The majority of academic sources agree that microenvironment includes company’s consumers, competitors, suppliers and distributors (Kotler and Armstrong, 2011, p. 67; Jobber, 2010, pp. 91-93). Arguably, market itself should be considered as a part of the model in line with the elements presented above. The microenvironment scheme is shown in Figure 2. Figure 2. Microenvironment. Source: Based on Kotler and Armstrong (2011, p. 67, fig. 3. 1). 2. 2. 1 Market Just Us operates on numerous markets, dealing with such products as coffee, tea, sugar and cocoa, and the main target market is fair trade coffee, that accounts for 0,25% of total global coffee production only, but for 60% of all the fair trade goods consumed (Jobber, 2010, p. 214). According to Exhibit 1 of the case study, it is a very fast growing market segment in Canada, which resulted into the increase of number of companies entering fair trade every year. The main trend of the market segment is that fair trade becomes trendy itself. All the facts suggest that it is in growth lifecycle stage. One of the market analysis tools that illustrates the scheme of organization’s market environment is market mapping (McDonald, 2002, p. 114). The market mapping for Just Us’ industry is provided in Figure 3. Figure 3. Market Mapping. Source: Based on McDonald (2002, p. 115, fig. 4. 5). 2. 2. 2 Suppliers According to the map, the value chain starts with suppliers. Just Us’ suppliers are fair trade co-operatives from many countries including Mexico, Peru, Guatemala, Bolivia, Indonesia and Colombia. Co-operatives are paid fairly for the raw materials they provide, about 2 times higher then the average coffee market price. Not only because of that, but also because of tight long-term relations between Just Us and its suppliers, they are a very reliable element of the chain. 2. 2. 3 Competitors The next stage of the distribution process is Just Us together with its competitors. Competitors can be identified within the framework developed by Peteraf and Bergen (2003, p. 1034). Different blend of market similarity and company’s capabilities allows splitting Just Us’ competitors into four groups shown graphically in Figure 4. Figure 4. Mapping Competitors. Source: Own development based on Peteraf and Bergen (2003, p. 1034). For competitor analysis see Appendix 2. 2. 2. 4 Distributors Just Us distributes products through its own coffee houses, student canteens, coffee shops and restaurants across Canada as well as through grocery stores including Ten Thousand Villages, Sobeys and Loblaws supermarkets. The last channel carries high risk because, despite being a great Just Us’ customer, Loblaws has its private fair trade coffee label so future interaction between the companies may be affected. 2. 2. 5 Customers According to Pareto’s 80/20 rule, about 20% of customers consume about 80% of a company’s product (McDonald, 2002, p. 12). The main target groups of Just Us’ end customers include fair trade activists, environmental friendly individuals and high quality coffee lovers, who can account for most of company’s sales. Other groups are students of the educational institutions that sell fair trade coffee in their canteens as well as upper-middle and high-income class indiv iduals, members of socio-economic groups A, B and C1, who are not price sensitive and ready to pay premium for higher quality. As it has been outlined before, the demographic characteristics of a target customer are young age and higher education. Geographically target customers are highly concentrated in Nova Scotia as Just Us brand is highly renowned there and the loyalty to the brand is high. 2. 2. 6 Porter’s Five Forces Analysis To measure the overall attractiveness of an industry, Porter’s five forces framework can be used. It suggests that the average profitability of involved companies depends on five factors: bargaining power of suppliers and buyers, threat of substitutes and new entrants and degree of rivalry among present market players (Brassington and Pettitt, 2007, p. 432). The scheme of the concept is illustrated in Figure 5. Figure 5. Porter’s Five Forces. Source: Based on Boone and Kurtz (2011, p. 44, fig. 2. 2). For Porter’s five forces analysis see Appendix 3. 2. 3 Internal Analysis This stage of environmental analysis audits company’s structure, capabilities, internal activities and performance in order to outline its strengths and weaknesses (Lancaster, 2001, pp. 371-372). It must be outlined first, that Just Us is one of the major players on the fair trade coffee market in Nova Scotia with four cafes, an own roastery, bakery, small chocolate factory and a fair trade museum. The revenues in 2008 amounted to $6,536,875, including $2,303,956 on behalf of cafes. 0% of the overall sales took place via food outlets and 30% via coffee shops. The average annual revenue growth is about 25% as shown in Exhibit 3 of the case study, 2008 to 2007 growth was 17,8%. Detailed cafes revenues by product, location and period can be found in Exhibit 6. The figures support the point that Just Us is a fast growing company. 2. 3. 1 Compa ny Resources One of the main goals of internal audit is to examine company’s resources and find out if they are sufficient for sustainable performance. Wood (2007, p. 28) identifies four groups: human, informational, financial and supply resources. For their analysis see Appendix 4. 2. 3. 2 Product The product range offered by Just Us is rather wide; all products are officially certified as fair trade and/or organic. The main product is fair trade coffee ranging from light to dark roast, with a decaf and a green beans line. The quality of coffee is ensured as Just Us controls all the stages of its manufacturing. Other core products include different premium quality tea lines from Sri Lanka, India and Ecuador, a range of own-produced chocolate types, such as creamy milk, dark, white, hot and handcrafted chocolate and sugar. Most of the core products are available for wholesale. Just Us cafes also offer own-made supplementary products such as bakery, sandwiches and soup. Such activities as live music, book readings and gala-nights together with high standard service augment the cafes products and create additional value for customers. A special analysis of product portfolio will be carried out in the 3rd section of this report. The products sold through retail channels and in cafes carry Just Us brand name, which is consonant with â€Å"justice† and is associated with social and environmental responsibility. The brand is widely known in Maritime Provinces of Canada, especially in Nova Scotia, where it has great recognition and loyalty. 2. 3. 3 Price The main pricing objective of Just Us is to maintain the lowest prices possible provided they cover all the expenses and profits essential to continue business. Thus the pricing of Just Us is mainly cost-orientated. Company’s products are price elastic, but target customers are ready to pay premium price due to high quality and ethical background (Jobber, 2010, pp. 422-423). From the point of pricing strategy, Just Us uses so-called â€Å"penetration† policy in order to develop long-term relations with its customers (McDonald, 2002, p. 394). 2. 3. 4 Place Company’s presence is concentrated in Maritime Provinces, especially Nova Scotia. Various distribution channels outlined earlier in the microenvironment analysis provide the opportunity to reach customers throughout Canada and also in the USA. Good knowledge of retail distribution channel as well as tight relations with suppliers and their wide diversification can be arguably considered the core competencies of the company (Ljungquist, 2007, p. 95). Strategic business units, Just Us cafes, are situated in Halifax (two outlets), Wolfville and Grand Pre. As it can be seen in the Figure 6 the concentration of the coffee houses is high and they don’t cover most of the potential territory. Another place of sales is the company’s web site where customers can place their orders onli ne. Figure 6. Just Us Cafes Locations. Source: Google (2012). 2. 3. 5 Promotion The main promotional goal of Just Us is to increase customer awareness of fair trade benefits and of their brand that presents the concept in its best. In order to reach target customers, Just Us is positioning itself as an organization that puts environmental and human wellness before profits. Main emphasis is made on products being 100% fair trade and organic. Previous advertising at Just Us was not intense. Promotional mix included print media, cafes themselves and publicity such as interviews on the radio, television and in the newspapers. Some examples of advertisements used by Just Us are shown in Exhibit 7 of the case study. An emphasis was also put on various public activities e. g. speaking events, live music nights and exhibitions in the cafes. As it can be seen from the 2008 media plan in Exhibit 8, advertising reach was not wide, covered just local audience and the main accent was made on helping farmers from third-world countries, rather then on high quality of the organic products. Such significant and appropriate for low-cost advertising medium as Internet was not utilized to an adequate extent and was limited to the maintenance of the company’s own website only. Many authors also consider people, process and physical evidence to be the elements of marketing mix, but in this report they were addressed inside the ‘product’ element (Jobber, 2010, p. 23). . 4 SWOT Analysis SWOT analysis allows firms to develop a strategy, which is grounded on the successful balance between organization’s recourses and exterior potential with respect to macro level factors. Such strategy is capable of improving performance of businesses to a considerable extent (Agarwal et al. , 2012, p. 12). However, there are m any critical points of view on SWOT, stating that even if SWOT raises some proper issues, it gives little or no useful recommendations to managers and also tends to omit the degree of importance of some issues that can be crucial for the company’s performance (Novicevic et al. 2004, p. 86, Kotler et al. , 2009, p. 106). Piercy and Giles (1989, p. 6) also suggest SWOT should be customer orientated, because only those strengths and weaknesses that can be noticed by customers are therefore valued by them. That’s why in this report a slightly modified SWOT analysis will be used, augmenting the initial concept with the degree of importance for every SWOT feature and taking the significance of customer orientation into account. Appropriate recommendations will be also provided in the end of the report. The SWOT analysis of Just Us, displayed in Appendix 5, shows that together with the less threatening issues, challenges facing the company to the highest extent are shortage of promotional activities and financial resources and expansion of the biggest players of the coffee industry into the fair trade segment. 3. Marketing Strategy Analysis In this section the competitive marketing strategy of Just Us will be analyzed using such frameworks as the Ansoff matrix, BCG growth share matrix, McKinsey / general electric’s multifactor portfolio matrix and some other concepts. First it is important to outline that Just Us is a coffee market nicher operating in a narrow segment and striving to its dominance through successful balance between resources, strengths of the company and consumer needs. Its strategy is rather more aggressive then defensive, because attack is the most appropriate form of defense while the market grows so rapidly and new competitors join the game (Brassington and Pettitt, 2007, p. 443-445). The following analyses will identify the most suitable strategies for Just Us and let compare them with the current one. . 1 Ansoff Matrix Ansoff matrix, or product/market expansion grid, is a tool that helps identify the appropriate growth strategy for a firm using two dimensions: products (existing/new) and markets (existing/new) (Kotler and Armstrong, 2011, p. 44). An image of Ansoff matrix can be seen in Figure 7. Figure 7. Ansoff Matrix. Source: Based on Kotler and Armstrong (2011, p. 44, fig. 2. 3). The first strategy, market penetration, i s suitable in case of total market growth, when expansion is achieved through the existing market share. Another way is to improve performance on account of developing current offerings in order to beat the competition (Lancaster, 2001, p. 381). Just Us uses such strategy in relation to its existing market in Nova Scotia and prosper because of the fair trade segment enlargement. Market development is a strategy of conquering new markets with available products. Just Us uses it expanding its distribution network using the same core products to other parts of Canada and to the USA. Product development strategy appears in introducing various types of chocolate and bakery to existing customers. Another demonstration of it is the differentiation of augmented product among cafes because of various interior and atmosphere. The last type of strategy is diversification and Just Us does not currently use it. 3. 2 BCG Growth Share Matrix The BCG matrix is a commonly used device for analyzing organization’s products and business units. It helps companies understand the best way to allocate resources and develop the appropriate successful strategy (Boone and Kurtz, 2011, pp. 53-54). See Figure 8 for BCG matrix image. Just Us as an overall business can be classified somewhere on the way from a question mark to a star, because the market is growing fast and the company’s market share is gradually increasing. Figure 8. BCG Matrix. Source: Based on Kotler and Armstrong (2011, p. 43, fig. 2. 2). Each coffee house can be classified within the above model as a separate business unit. The analysis shown in Appendix 6 showed the following results: Grand Pre coffee house is a star, Wolfville cafe – between a cash cow and a dog, Barrington is a dog and Spring Garden is between a question mark and a star. Based on the information presented in Exhibit 1, the core products of Just Us can be classified within the BCG matrix framework as well. According to their relative market share and market growth, coffee is a cash cow, cocoa is a star, sugar is a question mark and tea is a dog. From the practical point of view question marks need a wise development strategy to become stars and managers of Just Us should prepare to invest in stars in order to maintain their high growth. They should also get rid of dogs if they are not self-sufficient and try to keep cash cows in the same position (Boone and Kurtz, 2011, p. 54). 3. McKinsey/General Electric’s Multifactor Portfolio Matrix Another tool for competitive marketing strategy analysis is G. E. multifactor portfolio matrix. It has two dimensions: market attractiveness and competitive position, each measured taking multiple factors into account (Lancaster, 2001, p. 385). The appropriate analysis of Just Us as a business unit is provided i n Appendix 7 and results can be viewed in Figure 9. According to the results, the broad strategic guideline for Just Us is â€Å"Selectivity/earnings† that means the company should invest selectively into its activities to support and zoom the revenues. It is recommended by Day (1986) to continue the implementation of the current program and concentrate efforts on segments where the ratio between risk and revenues is in favor of the latter (Day, 1986, cited in Lancaster, 2001, p. 388). Figure 9. Just Us G. E. Matrix. Source: Based on Lancaster (2001, p. 387, fig. 12. 8). 3. 4 Other Frameworks Strategic position and action evaluation model (SPACE), designed by Rowe, evaluates financial strength and competitive advantage of companies as well as environmental volatility and industry attractiveness to determine the best suitable strategic thrust in a particular situation. The most suitable thrust for Just Us is â€Å"competitive†. It suits companies operating in unstable environment with scarce financial resources, but having strong competitive advantages on an attractive market (see Figure 10). Strategic steps suggested include cost cutting, productivity increasing and integration with companies possessing greater financial resources (Lancaster, 2001, p. 532). Current competitive strategy of Just Us misses the measures listed, thus the top management should take them into account. Figure 10. Just Us SPACE model. Source: Based on Lancaster (2001, p. 532, fig. A1. 6). In terms of Porter’s generic strategies, namely: overall cost leadership, differentiation and focus, Just Us has adopted so-called focus strategy. The company focuses on the fair trade coffee market, a specialized coffee market segment, achieves close connection with it and its superior understanding. Then within the segment it applies a differentiation strategy, such as quality leadership, in order to deal with competition (Kotler et al. 2009, pp. 105-106). It lets Just Us successfully serve the local target segment and remain competitive even with higher prices. 4. Recommendations As it was indicated in the previous analyses, Just Us has different ways available to improve its competitive marketing strategy. In this part of the actual report some strategic options for the cafe division will be summarized and a course of following actions will be recommended to the management team of Just Us. According to the Ansoff matrix there are four possible strategic directions: market penetration, product development, market development and diversification. It can be argued that the growth models based on product development and diversification strategies are not matching the business reality of Just Us company, because its strong value system doesnt let introduce new types of products that are not fairly traded and, at the same time, the management team doesnt have enough experience to deal with other fair trade products, such as cotton, fruit, rice and flowers. Taking into consideration the changes that have taken place in the market structure since 2009 and the fact that the world financial crisis is now over, the earlier suitable strategy of market penetration has arguably reached its limits. Today the company needs to expand its customer base, find ways to new markets and gain marketing activity to support growth. The core aim of market development strategy for Just Us is to expand the cafe chain to Nova Scotia and Ontario. To achieve the goal first Just Us needs to raise appropriate financial resources. There are three ways for it: franchising, merger with a cash rich company and bank loan. Franchising is a perspective way from the financial side, as Just Us has limited funds and it would solve the problem, but from the other side lack of understanding between Just Us and a franchisee may lead to the same fail outcome as happened during the Toronto expansion. To avoid that, the management of Just Us needs to clearly outline the franchising framework and embed a detailed description of regulations and responsibilities with respect to corporate values into the franchise contract. The other two ways are much riskier, imply some loss of control over organization’s activities and therefore are unacceptable for Just Us. If the first stage of market expansion through franchisee coffee houses is successful, Just Us should consolidate its resources and start opening own outlets in new territory. Besides from the â€Å"Place† part of the marketing mix there are big opportunities in improving the â€Å"Promotion† part. As there was a wide gap in advertising course before the formation of marketing and sales department, now Just Us needs to boost promotional activities and strongly improve their quality. The company should build an integrated marketing communication system that will not only communicate its message to the customers, but also receive feedback from them, that is very important for identifying and satisfying consumer needs in the best way possible (Boone and Kurtz, 2011, p. 489-490). In this connection the following actions can be recommended to the top management of Just Us: * Improve organization Delineate the responsibilities for each member of marketing and sales department. Leverage skills of the team members through corporate trainings and coaching, especially for Sarah, who is responsible for advertising and promotion. Any print and electronic advertising materials should be produced in cooperation with skilled professional designers and copywriters. * Carry out repositioning Coffee produced by Just Us is of a very good quality and totally acceptable in terms of consumer needs satisfaction, but it lacks the necessary image, so it is necessary to execute image repositioning. Just Us can use the example of Cafedirect, a fair trade coffee company that managed to become the sixth largest coffee brand in the UK by concentrating on the premium quality of its coffee more then on fair trade background (Jobber, 2010, pp. 15, 289). * Dramatically improve on-line presence Arguably, it can be highly recommended to Just Us to use the Internet for advertising as in comparison with traditional advertising it is much more targeted and has relatively low costs. Research has shown that more then 80% of Canadians aged 16 to 44 use the Internet at least once a day (Statistics Canada, 2012c). The possible tools to catc h their attention are context ads, web banners and streaming video commercials (Miletsky, 2009, p. 368-369). Context ads programs, such as Google AdWords, use the words entered by a user of a web search engine to determine the ads to show to them. Companies fix the list of search words and phrases that are relevant to their ads and the price limit they want to pay to the advertiser for a click on them. A suitable strategy for Just Us would be to choose more specialized and particular search phrases to link their ads to, because then the chance their ads will be displayed is higher with a lower cost per click. Furthermore, that will allow targeting potential customers more precisely and increasing advertising return on investments. For instance, instead of a popular key phrase â€Å"buy coffee†, a more specific phrase â€Å"buy high quality organic coffee† can be used. The essence of banners and commercials on the Internet is similar to traditional billboard banners and TV commercials, but on the Internet being placed next to the content that is interesting and popular with the target audience helps reach them better. For example, it is efficient for Just Us to show ads to people who are reading an article on ethical consumption or watching a video about third world countries on YouTube. Nowadays one of the best places not only for locating ads, but also for the whole spectrum of marketing activities is a social networking website, as it provides the required data and opportunities to reach target consumers accurately. According to statistics, 91% of Canadians aged from 16 to 24 and 70% of aged 25 to 44 are regularly using social media (Statistics Canada, 2012d). Many of them don’t have time to visit numerous resources and want all the information in one place, that’s why it is a perfect opportunity for a company’s message to be heard. Direct dialogue between a company and its customers as well as solving customer service issues online leads to brand loyalty amplifying and enhances positive word-of-mouth marketing (Dietrich and Livingston, 2012, p. 86). As it was previously stated, another important aspect is to gather the information from customers and especially their feedback on organization’s performance. According to Macy and Thompson, â€Å"social marketing and social web platforms enable dialogue among consumers, peers, and brands on a global scale†. Facebook group and Twitter account can help Just Us gather information about consumers and potential brand ambassadors as well as carry out promotional campaigns, conduct on-line surveys, gain new customers and communicate the benefits of fair trade to a great number of people (Macy and Thompson, 2011, p. 57-58). References 1. Agarwal, R. , Grassl, W. and Pahl, J. 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Indianapolis: Que Publishing. 8. Fridell, G. (2007) Fair Trade Coffee: The Prospects and Pitfalls of Market-Driven Social Justice. Toronto: University of Toronto Press. 9. Google (2012) Nova Scotia – Google Maps [Online]. Available at: https://maps. google. co. uk/ (Accessed: 17 November 2012). 10. Heavey, C. , Mowday, R. T. , Kelly, A. and Roche, F. (2009) Reconceptualizing Executive Environmental Scanning and Search: Implications for International Leadership Research and Practice, Advances in Global Leadership, 5, pp. 65-92. 11. Jobber, D. (2010) Principles and Practice of Marketing, 6th edition. London: McGraw-Hill. 12. Kotler, P. and Armstrong, G. (2011) Principles of Marketing, 14th edition. London: Prentice Hall. 13. Kotler, P. , Keller, K. L. , Brady, M. , Goodman, M. and Hansen, T. (2009) Marketing Management, 1st edition. London: Prentice Hall. 14. Lancaster, G. , Massingham, L. and Ashford, R. (2001) Essentials of Marketing, 4th edition. London: McGraw-Hill. 15. Lilien, G. 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(2004) Dual-Perspective SWOT: A Synthesis of Marketing Intelligence and Planning, Marketing Intelligence amp; Planning, 22 (1), pp. 84-94. 22. OANDA Corporation (2012) Historical Exchange Rates [Online]. Available at: http://www. oanda. com/currency/historical-rates/ (Accessed: 13 November 2012). 23. Peteraf, M. A. and Bergen, M. E. (2003) Scanning Dynamic Competitive Landscapes: A Market-Based and Resource-Based Framework, Strategic Management Journal, 24, pp. 1027-1041. 24. Piercy, N. nd Giles, W. (1989) Making SWOT Analysis Work, Marketing Intelligence amp; Planning, 7 (5), pp. 5-7. 25. Slaughter, R. A. (1999) A New Framework for Environmental Scanning, Foresight, 1 (5), pp. 441-451. 26. Statistics Canada (2009) Population 15 Years and Over by Highest Certificate, Diploma or Degree, by Age Groups [Online]. Available at: http://www. statcan. gc. ca/tables-tableaux/sum-so m/l01/cst01/educ43a-eng. htm (Accessed: 13 November 2012). 27. Statistics Canada (2012a) Average Hourly Wages of Employees by Selected Characteristics and Profession (Canada) [Online]. Available at: http://www. tatcan. gc. ca/tables-tableaux/sum-som/l01/cst01/labr69a-eng. htm (Accessed: 13 November 2012). 28. Statistics Canada (2012b) Average Hourly Wages of Employees by Selected Characteristics and Profession (Nova Scotia) [Online]. Available at: http://www. statcan. gc. ca/tables-tableaux/sum-som/l01/cst01/labr69d-eng. htm (Accessed: 13 November 2012). 29. Statistics Canada (2012c) Canadian Internet Use Survey, Internet Use, by Age Group and Frequency of Use [Online]. Available at: http://www5. statcan. gc. ca/cansim/pick-choisir? lang=engamp;p2=33amp;id=3580155 (Accessed: 24 November 2012). 30. Statistics Canada (2012d) Canadian Internet Use Survey, Internet Use, by Age Group and Internet Activity [Online]. Available at: http://www5. statcan. gc. ca/cansim/pick-choisir? lang=engamp;p2=33amp;id=3580153 (Accessed: 24 November 2012). 31. Statistics Canada (2012e) Population by Sex and Age Group [Online]. Available at: http://www. statcan. gc. ca/tables-tableaux/sum-som/l01/cst01/demo10a-eng. htm (Accessed: 13 November 2012). 32. Statistics Canada (2012f) Population by Year, by Province and Territory [Online]. Available at: http://www. statcan. gc. ca/tables-tableaux/sum-som/l01/cst01/demo02a-eng. htm (Accessed: 13 November 2012). 3. Wood, M. B. (2007) Essential Guide to Marketing Planning. London: Prentice Hall. Appendix 1. PEEST Analysis The main political factor for Just Us is the required recognition and certification of the term â€Å"Fair trade† by the government to defend the whole fair trade concept and its ambassadors. Also, the legal anti-dumping and anti-monop oly policy influences the protection of local businesses against international expansion to a very high extent. In the economic field the 2009 â€Å"credit crunch† and then recovery leads to new opportunities and market growth as the unemployment decreases and thus consumer purchasing power goes up (CBC, 2012). The economic situation is gradually improving and this leads to higher wages generally in Canada and Nova Scotia in particular (Statistics Canada, 2012a; 2012b). Another positive economic factor is the growth of exchange rate of Canadian dollar in relation not only to the main world currencies, but also to some of the currencies of Just Us suppliers, such as Mexico, Guatemala and Indonesia (OANDA Corporation, 2012). Being environmental friendly, Just Us business can only benefit from the increasing awareness in the Canadian society concerning the problems of pollution, CO2 emissions and global warming. These problems can cause, in their turn, some changes in political environment, e. g. new ecological laws that can adversely affect some of the mainstream competitors or substitute producers. As for the social factors in Canada, such facts as population growth (Statistics Canada, 2012f), prevalence of higher education (Statistics Canada, 2009) and the amount of people who are under 30, about 36% (Statistics Canada, 2012e), must be outlined. It can be argued, that better educated people will prefer high quality coffee due to higher ethical and taste standards and higher income. Young people are more likely to buy fair trade products as many of them are flexible in their habits and maintain an environmental friendly lifestyle. And population growth precedes the growth of the market in general. Contemporary technologic environment brings new opportunities to Just Us in communicating the value to its potential customers through Internet by means of blogs, search engines and of course social media, especially social networks. Appendix 2. Competitor Analysis 1. Direct competitors are Kicking Horse, Trident Bookseller amp; Cafe and Java Factory. These companies operate on the same market segment and aim at the same target consumers thus posing the most real threat. 2. Potential competitors are Starbucks, Tim Hortons and Second Cup. They are incomparable to Just Us in terms of scale, but are able to satisfy the same customer need. Their main strengths are high brand recognition and rich financial resources. The main weaknesses are lower product quality, standardization of their outlets and being 99% out of the fair trade concept. 3. Weak competitors are independent coffee houses e. g. Coburg Coffee, that are not able to compete for a substantial part of Just Us target market. . Indirect competitors (substitutes) are Kraft Foods, Procter and Gamble’s Millstone, Nestle and Loblaws private label. The main weakness of this category is being mostly out of the fair trade concept, sometimes even opposite to it, e. g. Nestle, named the world’s â€Å"least responsible company† (Jobber, 2010, p. 214). Appendix 3. P orter’s Five Forces Analysis As for the fair trade coffee market, the bargaining power of suppliers is very low, as they are only price takers, even though the point of fair trade requires fixing the raw material price at a particular level. On the opposite, the bargaining power of buyers is very high, as they are to cover a part of the higher fair trade price for the raw materials embedded in the premium price of the products. There are many substitutes to fair trade coffee from non-fair trade coffee to all manner of drinks. Taking into account the huge non-fair trade coffee market and abundance of its participants, the threat of new entrants to fair trade market seems to be very high. The absence of governmental certification of fair trade products in Canada means every company can claim to sell fair trade products. Finally, the competition in the industry is high as we can see from the previous competitors analysis. To sum it all up, the market of fair trade coffee can not be named attractive in terms of the above analysis, that means the participants have other reasons to remain on the market, rather then just high margins, e. g. remaining dedicated to the ethical mission, raising total profits due to overall market growth, increasing associated market share or improving company image. Appendix 4. Company Resources Analysis Just Us has 69 employees, 7 top managers and 5 managers in marketing and sales department. The marketing organization of the company is functional, as shown on the organization structure scheme in Exhibit 2 of the case study. The specialization of the roles linked to this structure requires managers to develop further skills in narrow areas. (Brassington and Pettitt, 2007, p. 449) As this is a worker owned company, every employee is highly committed to the success of the business. Besides, coffee houses staff is highly trained and experienced in what they do. It can be argued, that having 5 marketing and sales managers on the strength is enough to maintain marketing activities on a very high level. As for the informational resources, the company has all the required business data in form of quarter and annual reports. Other sources of information include distributors’ sales reports and cash reports of the cafes. There is a certain lack of funding for marketing activities at Just Us. Lilien and Little consider 6,9% of sales as â€Å"not a bad start†, because it is an average figure for marketing-to-sales ratio according to their study, but they also suggest taking a row of factors into account while applying this figure to a company’s budgets (Lilien and Little, 1979, p. 22). So it can be argued that being a part of low margin fair trade market, Just Us should link its marketing budget to the amount of profit. The ratio may vary depending on the selected strategy with the median of approximately 20%. As it was previously stated, Just Us has diversified supply channels and strong long-term partnership with its suppliers. That is why the situation with supply resources can be named one of the company’s strengths. Appendix 5. SWOT Analysis + Strengths:| Level| – Weaknesses:| Level| 1. Strong brand loyalty and recognition in Nova Scotia| High| 1. Lack of promotional activities| High| 2. Products of high quality| High| 2. Small financial resources| High| 3. Fair trade and organic certification of the products | Mid| 3. Higher price in comparison with non-fair trade competitors| Mid| 4. Experienced cafe personnel| Mid| 4. High concentration of the cafes| Low| 5. Stable long-term relations with suppliers| Low| 5. Insufficient territory coverage| Low| Table 1. Source: Own development. + Opportunities:| Level| – Threats:| Level| 1. General growth of the fair trade market in Canada| High| 1. Expansion of the coffee industry â€Å"sharks† to the market| High| 2. Creation of a governmental fair trade certification system| High| 2. Replacement with supermarket chains’ own fair trade brands| Mid| 4. Rise of awareness of the fair trade concept among potential customers| Mid| 3. Customer inability to distinguish true fair trade products| Mid| 3. Increase in the number of universities supporting fair trade| Low| 4. Competition of small privately owned cafes| Mid| 5. Creation of an on-line customer community| Low| 5. Macroeconomic problems that will enhance customer price sensitivity 4. Increasing competition from small privately owned cafes| Low| Table 2. Source: Own development. Appendix 6. BCG Matrix Analysis Sales| Grand Pre| Wolfville| Barrington| Spring Garden| Total| Jan. | 42342| 39907| 31831| 40849| 154929| Feb. | 47541| 41493| 30182| 41064| 160280| Mar. | 44742| 42512| 28549| 41796| 157599| Apr. | 51744| 47461| 32537| 49115| 180857| May| 61623| 46301| 36503| 50382| 194809| June| 61850| 45136| 35837| 48859| 191682| July| 67890| 45132| 36737| 46677| 196436| Aug. | 79159| 47902| 36015| 46679| 209755| Sept. | 68860| 49950| 39752| 59402| 217964| Oct. | 75790| 44780| 40229| 61334| 222133| Nov. | 57545| 43571| 34476| 56973| 192565| Dec. | 80338| 45854| 36437| 62318| 224947| Total| 739424| 539999| 419085| 605448| 2303956| Share| 32%| 23%| 18%| 26%| | Table 3. Source: Own development based on Exhibit 6 of the case study. Growth| Grand Pre| Wolfville| Barrington| Spring Garden| Feb. | 12%| 4%| -5%| 1%| Mar. | -6%| 2%| -5%| 2%| Apr. | 16%| 12%| 14%| 18%| May| 19%| -2%| 12%| 3%| June| 0%| -3%| -2%| -3%| July| 10%| 0%| 3%| -4%| Aug. | 17%| 6%| -2%| 0%| Sept. | -13%| 4%| 10%| 27%| Oct. | 10%| -10%| 1%| 3%| Nov. | -24%| -3%| -14%| -7%| Dec. | 40%| 5%| 6%| 9%| Average| 7%| 1%| 2%| 4%| Table 4. Source: Own development based on Table 3. | Grand Pre| Wolfville| Barrington| Spring Garden| Sales Share| 32%| 23%| 18%| 26%| Level| High| Mid| Low| Mid| Average Growth| 7%| 1%| 2%| 4%| Level| High| Low| Low| High| Category| Star| Cash cow / dog| Dog| Question mark / star| Table 5. Source: Own development based on Table 3 and Table 4. Appendix 7. G. E. Matrix Analysis Market attractiveness factors| Rate * (0 to 3)| | Competitive position factors| Rate ** (0 to 3)| Size| 1| | Share| 1| Growth rates| 3| | Share growth rate| 2| Competitive rivalry| 0| | Product quality| 3| Profit margin amount| 1| | Brand loyalty| 3| Technological needs| 2| | Distribution channels| 3|