The paper "Strategic Marketing for Caffebene Company" is a great example of a marketing case study. Standardization of the products and services enables an organization to create a competitive advantage. Standardization takes various forms such as pricing and quality of products. Through standardization, an organization is able to develop consistency in the production process. Kim researched the coffee industry and came up with standard strategies which will help to meet the demands of the customers better. This led to the development of a cafe-like style of providing coffee products.
This catered for various needs of the customers. Standardization further enables an organization to reduce the cost of production. This is through setting standard procedures and processes which could be implemented to cut down costs. For instance, Caff’ ebene Company practices centralized purchasing which enables the company to have economies of scale. All the departments of the company purchase their products and needs through a central place. This helps to cut down the costs of the company. Through standardization, the processes and various strategies will be identical which implies that they will be able to adapt the environmental changes that may come up.
Standard methods such as marketing and promotions help to accommodate any changes that may come in the coffee industry. For instance, the pricing strategy should be flexible to meet the changes in prices that might be impacted by the changing environmental changes. Caff’ ebene Company has been able to meet the changing demands by conducting continues audit to find out the changes in the market that might impact on the changes in price and make necessary adjustments. However, the disadvantage of standardization is that it may not be applicable in some circumstances.
For instance, the US economy may have different standards from that of the South Korean economy. In this regard, standardized procedures and processes can hinder some achievements of the company. 2. Competitive pricing strategy On the same note of standardizing the coffeehouse brand, Kim thought of introducing new products which were not provided by the customers. One food item he decided to introduce were desert foods such as waffle. The customers could eat waffles along the kiosk streets. He also considered reducing the menu specifically to meet the demands of the customers.
He calculated that coffee consumption will account for about 50% of the total sales while waffle and ice cream and other drinks will cater for other 50%. The pricing of the coffee drinks will be like those of the leading coffeehouse Starbuck. For instance, Americano will cost 3,800 Won and Espresso will cost 3,500 Won. These are the prices for the year 2010. The pricing strategy was one of the strategies applied by Kim to create a competitive advantage of the company because the services and products offered were better than those of the competitors but the prices were the same.
This helps to attract and maintain customers. On the other hand, another factor which influences the pricing of the company’ s products is the product life cycle. At the introduction stage, the products can be priced at a lower price than the competitors just to promote the company. This helps to attract and retain customers. Despite Caff’ ebene introducing broadcasting station, it did not charge higher prices than the normal prices.