Marketing Mix of Costa Coffee and 4Ps (Updated 2023)

The Marketing mix of Costa Coffee analyses the 4Ps of Costa Coffee, which include the Product, Price, Place, and Promotion of Costa Coffee. What Café coffee day is to India, Costa the coffee shop is to the UK. The Whitbread company owns Costa Coffee and competes more with baristas than Cafe Coffee Day in India. It has a sparse presence in India but has a unique and mature franchise in the UK. Here is the marketing mix of Costa coffee.

About Costa Coffee

• Type: Coffeehouse chain
• Industry: Food and beverage
• Founded: 1971
• Founders: Sergio and Bruno Costa
• Headquarters: Denham, Buckinghamshire, England
• Area served: Worldwide (over 3,400 stores in 31 countries)
• Current CEO: Jill McDonald
• Number of employees: Over 18,000
• Major products: Coffee, tea, hot and cold food, and snacks

Costa Coffee Product Strategy

The firm’s main product is coffee. But Costa Coffee also has many other varieties of products that people love. Hot chocolate, Special drinks, tea, Cold drinks like cold coffee and ice blends, sandwiches, and other supplementary foods are some of the varieties of Costa coffee. The coffee product is the most important component critical factor in Costa Coffee’s marketing mix because the coffee house firm’s complete marketing strategy depends on customers liking and loving their products. Thus, Costa Coffee is more interested in a pull than a push strategy.

Costa Coffee, a world-prominent coffeehouse chain, offers a diverse product and marketing mix of Costa coffee catering to various customer preferences.

The new Product Mix of Costa coffee in 2023 is as follows (Source).

1. Coffee and Espresso-Based Beverages: The core of Costa Coffee’s product mix includes a variety of coffee and espresso-based drinks like Americano, Latte, Cappuccino, Flat White, Mocha, and Espresso. These are available in multiple sizes and can be customized with different types of milk, syrups, and extra espresso shots.
2. Teas and Infusions: Apart from coffee, Costa offers a selection of teas and herbal infusions. This range includes classic options like English Breakfast and Earl Grey, green teas, herbal teas, and fruit-infused teas.
3. Cold Drinks and Iced Beverages: To cater to customers during warmer weather or those preferring cold drinks, Costa provides a variety of iced coffees, iced teas, fruit coolers, and smoothies. This includes popular items like Iced Latte, Iced Americano, and a range of flavored iced drinks.
4. Seasonal and Limited-Edition Drinks: Costa frequently introduces seasonal and limited-edition drinks, especially around holidays and special occasions. These often include festive flavors, unique coffee blends, and themed beverages that align with the season.
5. Food and Snacks: Costa Coffee’s food menu includes a variety of sandwiches, paninis, toasties, pastries, cakes, and snacks. The selection often provides breakfast, lunch, and light snacking options, catering to customers throughout the day.
6. Health-Conscious and Dietary Options: Recognizing the diverse dietary needs and preferences of its customers, Costa offers a range of health-conscious options, including vegan, vegetarian, gluten-free, and low-calorie items. This extends to both food and drink options.
7. Retail Products: Costa also sells coffee beans, ground coffee, tea bags, and branded merchandise (such as mugs and tumblers). These products allow customers to enjoy Costa Coffee’s offerings at home.
8. Costa Express: For customers on the go, Costa Express vending machines provide a quick and convenient way to purchase hot beverages. These machines are in public places like gas stations, airports, and supermarkets.

Costa Coffee Pricing Strategy

Costa Coffee believes in Premium pricing because of its product varieties and quality. Costa Coffee relies on its commitment to give its customers the best coffee taste, coffee shops, and supplementary food. Thus, Costa Coffee does not think that price is essential. It thinks it needs to be a premium brand to deliver the best coffee cream and value to its customers.

Costa Coffee employs a multifaceted pricing and distribution strategy to maximize market penetration, sales, customer loyalty, and brand value. Here’s an expert breakdown of their approach and distribution strategies:

1. Competitive Pricing: Costa Coffee positions its pricing competitively within the coffeehouse market. They carefully balance quality and affordability, ensuring their prices align with industry standards, especially compared to other major coffee chains. This approach helps them remain attractive to a broad customer base.
2. Premium Pricing for Specialty Drinks: Costa adopts a premium pricing strategy for specialty beverages and unique concoctions. These drinks, often more complex and made with higher-quality ingredients, are priced higher to reflect their special status. This enhances the perceived value of these products and caters to consumers willing to pay more for a unique coffee experience.
3. Geographic Pricing Variability: Understanding the diversity of economic conditions, Costa Coffee adjusts its pricing based on geographic location. In areas with higher living costs or where the market can sustain higher prices (like airports or central business districts), prices may be higher than stores in suburban or less affluent areas.
4. Loyalty Program and Dynamic Pricing: Costa Coffee’s loyalty program is vital to its pricing strategy. Through incentives and rewards, they encourage repeat business and customer loyalty. Dynamic pricing, such as special offers and seasonal discounts, attracts new customers and retains existing ones.
5. Psychological Pricing Tactics: Costa Coffee uses psychological pricing tactics like many retailers. For example, pricing items slightly below a round number (e.g., £2.99 instead of £3.00) can make products seem more affordable, influencing consumer behavior and increasing sales.
6. Pricing for Food and Ancillary Products: Apart from beverages, Costa Coffee’s food items and ancillary products like coffee beans or branded merchandise are priced to complement their drinks while offering convenience and quality. This holistic approach to pricing ensures a consistent value perception across their entire product range.

Costa Coffee’s pricing and promotional strategy are carefully crafted to balance consumer value and brand perception with business profitability. It leverages competitive and premium pricing, geographic variability, and psychological tactics to target each market, all while fostering customer loyalty through rewards and dynamic pricing. This approach helps them maintain a strong market position in a highly competitive industry.

Costa Coffee Place Strategy

Costa Coffee has a fantastic presence in Great Britain with over 1000 stores. However, the company’s presence in India is minimal. Costa coffee can be found in malls, airports, and other premium places. However, it is present only in the world of top urban cities, which adds to the positioning of Costa coffee.

Costa Coffee’s place strategy is critical to its success in its market share in the coffeehouse market. Here’s an overview of its marketing strategy in five key points:

1. High Street Locations: Costa Coffee strategically positions its stores on busy high streets and shopping districts. These locations benefit from high foot traffic and visibility, making them accessible to a broad range of consumers, from daily commuters to casual shoppers.
2. Presence in Transport Hubs and Commercial Areas: Costa Coffee outlets are commonly found in transport hubs like airports, train stations, and bus terminals, as well as in business districts. These locations cater to travelers and working professionals who often seek quick, quality coffee and food options on the go.
3. Stores in Educational Institutions and Hospitals: By placing outlets in universities, colleges, and hospitals, Costa Coffee taps into a steady flow of students, staff, and visitors. These locations are tailored to the needs of these specific environments, offering a convenient and comforting space for patrons.
4. Drive-Thru and Express Formats: Understanding the need for convenience, Costa Coffee has developed drive-thru stores and Costa Express machines. These formats cater to customers who prefer a quick coffee experience without compromising quality.
5. Global Expansion and Franchising: Internationally, Costa Coffee continues to expand its presence through franchising and partnerships, targeting new markets and adapting its offerings to suit local tastes and preferences. This global growth strategy has significantly increased the brand’s worldwide footprint.

Costa Coffee’s place strategy effectively combines a marketing mix of high visibility, convenience, various marketing strategies, various distribution channels, and strategic market expansion to create a strong and accessible brand presence. This approach is integral to attracting and retaining a wide customer base.

Costa Coffee Promotion Strategy

Promotions are almost absent in the case of Costa coffee shops. At least there are no ATL promotions seen. However, Costa Coffee company uses several BTL promotions, such as bus advertising and out-of-door media. However, promotions are key also because Costa Coffee company wants to rely more on word-of-mouth publicity.

Some Recent Video ads and Print ads of Costa coffee are:

Costa Coffee refreshes its brand positioning, encourages consumers to express themselves through ‘YouxCosta’ campaign: Best Media Info

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