Abstract
This case traces the life of a new endeavor, starting with a small patisserie and coffeehouse and the subsequent development of the business, considering three alternatives, namely optimizing the concept, expanding through a franchise network, and building a network of company-owned stores. The story of Rui and Joana raises a wide range of issues that managers need to address. After reading and working through the case, students will be able to evaluate the product portfolio, based on actual sales data, and to evaluate and propose strategic options using classical models.
TopSetting The Stage
Rose - Patisserie and Coffee House is a patisserie and coffee shop located in Porto downtown. The store has an exquisite decoration and a stylish image. The company covers two distinct economic activities. The first one is framed in NACE 5630 (beverage serving activities), while the second one is similar to the activities framed in NACE 562 (event catering and other food service activities). These two segments show idiosyncrasies, despite sharing company’s resources. While the first segment is constituted by end consumers, in the second segment the customers are companies. It is also relevant to say that consumption can occur inside the store or, alternatively, customers can order the products by phone, to take-away. For these reasons, they will be subject to individual analysis.
Key Terms in this Chapter
Satisfaction: Emotional state arising from the purchase or use of a company's product or service; how delighted customers are with a company’s products, services, and capabilities.
Market Positioning: It is the relative position that brands, products, and services occupy in the minds of consumers.
Marketing Mix: The marketing mix is a set of controllable variables that determine how consumers respond to the supply and consists of what the company can do to influence the demand for its supply.
Strategy: Strategy is a plan, a direction, or a guide to action for the future, a path to follow from where you are to where you want to go.
Business Development: Involves activities and processes to create, implement and expand growth opportunities within and between organizations.
Market Segmentation: It is the process of splitting a wide consumer or business market, usually encompassing existing and potential customers, into sub-groups of consumers (identified as segments) based on some type of common characteristics.
Loyalty: Consumer behavior characterized by buying from the same company, the same brand, or the same product; repeated buying from a firm due to the benefits received from those products.