10. MARKETING PLAN FOR TOLL COFFEE

Business plans are mostly concerned with controlling expenditure, largely because of environmental changes (Gilligan & Wilson, 2012). Toll coffee shops provide a unique, friendly atmosphere for families and singles. A credible marketing plan is drawn using SMART business and promotion goals, clear segmentation, targeting, positioning, and other global promoting strategies. The 4P framework is used to analyze the strategies. The revenue projection and recommendation on marketing activities using the marketing mix would help to determine the financial implications and cost of individual proposed marketing activities.

Strategic management is also concerned with the competitive advantage of firms. Toll provides a rich coffee experience and maintains long-term relations with its customers. Toll’s main competitive advantage is that they used the best quality beans from all across the world, and the rich taste is obtained in all the outlets of the world.

Toll operates in the retail food and beverage industry. This industry has been booming recently. In 2009, they faced a major slowdown due to economic catastrophe and fluctuations in consumers’ tastes and preferences, declining by 6.5%, or £26.4 billion. Due to financial fall, buyers spent less on luxury items like pigging out, picking less expensive goods than buying exorbitant coffee drinks (Anon., 2013). When any service company decides to enter into global markets, it has to keep up a balance between the needs of native peoples and travelers. While traveler customers who arrived at Toll Shop look for the same coffee experience that they relish in their motherland

• Toll aims to increase market reach in the coffee-making business and increase their sales of ready-made drinks, coffee, and coffee products. Their aim was to build a company with “soul,” which means that employees have to listen to the wants of customers and to meet their expectations. Their long-range aim was to open 25,000 stores all across the globe, so their stores were designed in a pleasant ambience surrounded by coffee aroma (Koontz, 2012). James Toll, Founder of Toll, aims to restore the typical Toll experience in the phase of quick development (Howard, 2008).
• Toll objectives are to maintain their sustained growth, which does not weaken the company’s culture and achieve leadership to work like a small company (KiVarot, 2006). Their main standing point is to continue as the most identified and valued brands in the world. To achieve this objective, they will continue their expansion consistently all across the globe and maintain their chain of stores. Their next goal is to offer customers varieties of drinks and products through their different networks (Chan, 2012).
• Toll has been successful in bringing the Italian coffee concept to the UK and then to the entire world. The strategies were outstanding:
• Their adaptation strategy enabled them to add new flavors to their drinks, coffees, muffins, and cakes.
• Toll is completely consumer-focused; their culture is to make customers feel comfortable, relax, and listen to their favorite music with their favorite drink.
• Toll followed strategic alliances, partnerships, joint ventures, and acquisitions.
• Toll has not invested in TV commercials and promos; rather, their word of mouth speaks of their service and product quality.
• Toll maintains its regulation of production by directly communicating with agriculturalists to obtain coffee beans and manage its distribution to all chains of stores (Stanley, 2002).
• Employees are the key assets to the organization. They listen to their wishes and provide them with the expectations.
• Toll maintains the same ambience and rich coffee experience in all the stores across the world.

Market segmentation is a resourceful practice of breaking a market into various clusters of consumers with their distinct desires, features, and behaviors that require different goods or marketing programs (Kotler & Armstrong, 2006). Cachola (2012) states that Toll uses.

• Demographic segmentation, i.e., markets by age, sex, income, ethnicity, size of family, etc.
• Geographic segmentation, i.e., markets by region, market size, density, or climate
• Psychographic segmentation, which connects with demographics

Firstly, Toll was mainly focused on a socio-economic segmentation in the customer market, as it was focused on business-class people, office workers who wanted to consume a cup of hot coffee with a pleasant ambience and service. Toll has segmented their market geographically and demographically by choosing prime store locations where they find quality crowds (Dibb & Simkin, 1996). Their food and drinks are appealing to children and maintain a highly valued image, which appeals to their ideal segment. Their actual segment evicted to be young and less cultured. Their main segment represents college graduates with high income who like to hang out and share the same neighborhood as married couples (Anon., 2011).

The meaning of target market is a rational suggestion of the fundamental idea of marketing (Lancaster & Massigham, 1993). Toll focuses only on one class of people—those who are gourmet coffee drinkers. This is how Toll labels themselves as niche and offers high-quality products. Their target market is men and women, aged 25–40, of the total market. Consumers of this age group tend to be high-income professionals or career-oriented. This group is increasingly growing at 3% annually. The next target group is young adults 18-24 of ages. They yield almost 40% of Toll sales and position themselves for college students who can retreat with friends, chat, write documents, and socialize. They entice this group with their innovative technology and ideas. This group grows at a rate of 4.6% yearly. The last target group are children and teenagers ages 13–17. This group contributes 2% of total Toll sales, but their parents buy many products. Toll entice this group by offering various appealing drinks (Cachola, 2012).

Positioning in a market is producing a particular marketing mix to effect prospective buyers’ whole insight of a brand, product range, or organization. Toll have positioned themselves as the highly reputed brand (Kotler & Armstrong, 2006). They have position themselves in such a manner that they can differentiate their products from their competitors and provide them with strategic benefit in the target market. They want to cherish and motivate the human essence—one party, one delegation, and one neighbor at a time. Their product positioning is customer-based, which helps them to offer the best service than expected. They hold a sustainable competitive advantage in terms of customer and employee satisfaction (Cachola, 2012). Toll has framed its positioning strategies based on customer expectations and provides them with an ambience, furniture, and music. Starbucks makes their employees their partners and involves them in all their decision-making processes (Porter & Millar, 1985; Porter, 1998). (Refer Appendix 2)

Price

However, the price of products is relatively greater than other local coffee shops, but consumers are prepared to pay for their luxurious interiors and ambience inside the shop (Kotler & Keller, 2009).

Product

Toll has used product quality, variety, services, and brand name as a tool for product development and has undertaken a quality upgrade strategy (Kotler & Keller, 2009). Firstly, it commenced with coffee making with skimmed milk; now it has included cold beverages. They have introduced the Cafeccino beverage (Nanos, 2012), offering low-calorie and sugar-free versions of drinks sweetened by natural sweeteners or honey. In 2009, they launched salads, baked goods, lattes, instant coffee packets, and selling beer and wine in a few shops. In 2014, they began producing handcrafted sodas and pastries. Their products are unique with good health benefits (Anon., 2008).

Promotion

Toll did not use TV commercials for their promotion. They maintained good public relations; personal selling and word of mouth helped them to achieve their target (Kotler & Armstrong, 2006). They have their own community online to collect customer feedback and reward programs to earn a free drink. They stress more on quality and create a “community atmosphere” among coffee lovers.

Distribution

Toll operates through joint ventures and partnerships by licensing their products. They are operating as retail stores in more than 60 countries’. Some of the techniques applied by them to increase and uphold their leading position in the market include purchasing players occupancies purposely functioning at a low cost and grouping many sites in small geographic areas (Klein, 2009).

Marketing expense budget (all in GBP)

CONCLUSION

This report is an overview of Toll, its strategic marketing planning, and its implementation. It has applied different marketing strategies in the coffee industry (STP Process, i.e., segmentation, targeting, and positioning strategy) and marketing mix strategy (price, product, distribution, and promotion). Their approach is smart but simple. They also use social networking sites and wireless hotspots to motivate friends and families to share coffee and coffee gifts, permitting them to attract and retain prospective consumers and increase conversion costs, site, and accessibility all at the same time. Reaching an international presence, Toll is going through extension problems in the U.K. The country is turning off customers to spend a lesser amount on extras, and there is competition from other coffee shops, for example, McDonald’s offering decadence coffee brews for a lesser price (Adamy III, 2008).

Toll aims to provide innovation, perseverance, and patience to its employees and uses technology for growth. With the efficient training of their employees, they know how to do their task perfectly. Their differentiation from the rest of the competitors is their high product quality and also focus on customer needs and desires with their close relationship and database management system. Their customers spent good time in a community environment with their friends, families, or neighbors. This is the reason that Toll is dominant in the coffee market and has no rival to beat them in the sector (C, 2010)

RECOMMENDATIONS 

• Toll has immense growth prospects in the international market, but Brazil, China, India, Africa, Mexico, and Peru are emerging faster. However, they have penetrated the Chinese market, but there are yet to explore opportunities.
• The Toll global strategy proposes that it should transfer its core competence and skills country to country and then slowly form their profitability in many countries as it continues its international development in a biological way.
• They have abundant prospects in the tea drink and fresh juice product mix. They should build more along the product lines of coffees.
• As consumers’ preferences and standards of living change concerning refreshments and drinks, Toll should offer more healthy drinks and snacks in their menu.
• Prices of high-quality coffee beans often fluctuate in the international market. Toll can reduce this problem by implementing strategies like locking their estimated quantity for future supply at a low price.
• Toll should penetrate the untapped market in the UK.
• They can extend their iced beverages and packaged products, build strong relationships with big box retailers for more shelf space, and increase distribution channels.
• From their 10K’s, it is evident that Toll spends very little in promotion and advertising strategies. So in the face of higher rivalry, it is recommended to invest in marketing and advertising initiatives.
• To retain customer loyalty, home delivery options by building a beta concept on the go should be started.
• The mobile apps have increased sales in the UK by 10%, so they can invest more in such apps, reduce waiting times in stores, and provide customized services to customers.
• They should invest more in upcoming and unexplored markets.

PART 2

The theory of disruptive innovation clarifies the marvel by which an advancement changes a current business or area by presenting straightforwardness, comfort, openness, and moderateness where confusion and high cost are the present state of affairs. At first, a disruptive innovation is shaped in a specialty advertisement that may seem ugly or unimportant to industry officeholders; however, in the long run, the new item or thought totally reclassifies the business. According to Christensen (1997), disruptive innovation is anything that creates an entirely new market through the introduction of new products. Web-based companies such as Google, Amazon, eBay, Apple, Facebook, and Twitter that dominate the online space, the remarkable success of socializing networking portals, and the challenges the conventional companies are facing are certainly internet, and web is the disruptive innovation. Consumers have willingly accepted the web technologies, leaving no doubt for companies to plan promotion with web keeping in mind (Christensen, 2015).

E-promoting is a business that is emerging from mechanical advancements, advertising, and customer markets. E-marketing is reliant on advertising standards and structure and gives means, components, and business sector comprehension to address purchasers. New advances furnish associations with trackable, quantifiable results, making it easy to gauge the viability of crusades, i.e., return on e-advertising speculations. The destinations of e-promoting are:

Cost-centric: the goal is to reduce cost. The pressure is to reduce costs everywhere in the global market.

Sales-centric: the objective is to increase sales and sales revenue. Value-based sites, search engine optimization (SEO), both paid and natural, membership-only destinations, and offshoot promotion are all conceivably vital drivers of online deals.

Behavior modification: the objective is to change the conduct of consumers/partners, in particular via mechanizing a few parts of procurement procedure.

Information broadcasting: the web is used as an increment or substitute for an outdated network.

Marketing goal: the objective is to promote products and services to the target audience.

Entertainment-centric goal—this is extremely basic because of the fast reception of online networking innovations and applications. Shoppers like to get entertained and review enthralling messages or exercises more effortlessly than different types of limited-time correspondences (Dann & Dann, 2011).

Web makes esteem for clients. Contrasted with conventional types of promotion, it has a mixed bag of qualities, including properties that can be utilized to tie purchasers more like an organization or brand. At a nonexclusive level, the web has six key qualities, including properties for buyers, defined by McDonald and Wilson (1999) as the “Six Is” framework:

• Independence of place: the site offers freedom of place so that the shoppers can reach online stores from anywhere. From the buyer’s viewpoint, buy choice and exchanges should be possible from home. While from the organization’s point of view there is no compelling reason to contribute on lavish premises or have extensive branch systems, purchasers can get to virtual stores from any piece of the world. This additionally helps in the maintenance of profitable clients and more deals on the web.
• Independence of time—quality is made by “constantly open” accessibility. Contrasted with the past, clients have remarkable access to organization items and administrations at the time that suits them. A definitive retailing comfort is to shop at the perfect time.
• Interactivity: the web empowers the client to cooperate with clients anytime of the day with no outsider in the middle. There are sites that give data about different items and organizations and their uses on their sites, which is effectively accessible to individuals to peruse, comprehend, and collaborate with organizations specifically. Indeed, even criticism after the utilization of items is likewise sent straight to organizations, which head honchos can read to enhance their items and administrations.
• Individualization—a key component of this office is the capacity to distinguish profiles and track singular clients. Individualization sends a message to every client as per his or her necessities.
• Integration—it alludes to the “know you’re client” standard. Data is gathered on clients from over the association and over the client; the information base is united, assessed, and coordinated into a backend framework.
• Industry restructuring speaks to the perspective that if an association is not ready to rebuild utilization of IT-enabled showcasing, another person will utilize it. Malcolm McDonald, 2013)

It is concluded that the web and the World Wide Web have the ability to change connections in the middle of associations and partners. Electronic marketing, or e-commerce, is the least demanding approach to achieving clients. The site offers freedom of area, which implies buyers can reach online stores paying little mind to geographic area. Buyers can reach online stores and pick up items anytime. It likewise empowers purchasers to cooperate with organizations straightforwardly (Malcolm McDonald, 2013).

Background of the firm

Toll is a UK company based in east Yorkshire, UK, founded in 1971 by James Toll. Toll is a trained, qualified coffee taster and regularly visits coffee plantations in Colombia to pick the coffee. As the coffee taster, he personally inspects every batch produced under the ACME brand name. He does not have business experience. All Toll coffee is produced in a traditional manner. Toll does not blend coffee as they believe that their clients should get the best. Their product mix includes handmade, high-quality coffees, tea, fresh juices, and other food products.

Source: IBIS World report

Appendix 2: Industry Structure 

Source: IBIS World report

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