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PLS 200605-088 - 2006T0040EN INH Teacher notes Medellin Secr

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In order to familiarise oneself with the business and to see what competitors it has, it is wise to perform a SWOT analysis first and to survey its

    Medellín Secret, the passionate coffee

     Teacher’s notes

This case was written by Wim Kwakernaat and Chris Buijsman, Faculty of Marketing Studies,

    Inholland University, The Netherlands as a part of Leonardo da Vinci project “Moving towards the case method”

It is intended to be used as the basis for class discussion rather than to illustrate either

    effective or ineffective handling of a management situation.

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Medellin Secret: Teacher’s Notes

For the purposes of this case study four subjects have been selected in connection with Medellin

    Secret for potential assignments.

     e-marketing

     e-commerce

     Contextual Study Supply Chain Management

     1 Contextual study

At present Medellin Secret is only sold in the Netherlands. Expansion into other countries is part of the

    company’s strategic vision. There is no question as to whether this will happen or not. The stage in

    which a feasibility study is conducted, has been completed and the company is now in a position to

    examine how this is to occur, what the best target group is, and so forth.

Business and context

    In order to familiarise oneself with the business and to see what competitors it has, it is wise to

    perform a SWOT analysis first and to survey its competitors that are active in the coffee market.

    Assignment 1 Analysis

    1a SWOT analysis

    o Use the information provided in the case study to conduct as comprehensive a SWOT

    analysis as possible. 1b Porter 5 forces

    o Try to fill in the Porter model for the coffee sector as comprehensively as possible.

In order to decide which target group could yield the largest profit a study will first need to be

    conducted to establish what target groups are available. One will have to examine whether operations

    are to be confined to the B2B or the B2C market, or a combination of them. What customers will be

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sought within the B2B market? Coffee specialty shops or upmarket restaurants? Finally, a growth

    strategy will need to be sought.

Assignment 2

    Target group

    1c Determining the target group

    o In order to be able to work on this case study it is important to have an idea of the target

    group. Which target group is likely to yield the largest profit. A choice may be made

    between B2B, B2C or a combination of them. In the case of B2B a decision will also need

    to be made as to which sector is the most suitable. Provide reasons for your answer. 1d Choosing a growth strategy

    o What growth strategy is Medellin Secret likely to opt for? 2 E-commerce By utilising an additional channel (the Internet) the company is trying to become less dependent on

    local shops and local marketing. The problem is that the website must project the appropriate mood

    and quality, as ordinary shops do. So how are customers to come to the website?

The online shop

    At present there is an informational website www.medellinsecret.com which includes a feature to

    order coffee through it. Sales through this website are very disappointing. Something needs to be

    done about this. The major problem encountered by most websites is that their target group fails to

    find them. What needs to change?

Assignment 2: the website

2a Conduct a benchmark study of five coffee websites using an Excel spreadsheet

    2b Assess the Medellin Secret website, write down ten points for improvement and elaborate on

    them.

    2c What type of online shop would be best for Medellin Secret?

    2d Alternatively, should it be a portal instead of an online shop?

    o What would be the benefits of this?

    o Would there be any financial benefits as well? 2e How will more customers reach the website (generating traffic)?

    o Think of seven possible ways of attracting more visitors to the website. Work them out.

    (They may also take the form of off-line campaigns.) 2f How can one ensure that visitors will leave any information behind (collecting data)?

    o Work out four ways of ensuring that visitors will leave their particulars on the website. 2g The website is messy at present. The company has failed to project a certain image.

    o What image should the website project? Work this out.

3 Branding on the Internet and e-marketing

In practice Internet marketing is used to market an online environment. The appropriate tools for this

    purpose are banner advertisements, direct e-mail, links and other services. Direct e-mail is mainly

    designed for the retention of existing customers. By sending customers personalised e-mail messages

    an attempt is made boost their loyalty. Branding aims to make the website or the product known and

    does not focus on sales in the first instance.

Communication with customers

    An e-marketing plan has never been written for Medellin Secret. This is one of the reasons why the

    online shop is not successful and why visitor numbers are disappointing. The conversion rate is also

    too low. Clear thinking about communication is important for an e-marketing plan.

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Assignment 3: e-marketing

Thanks to e-marketing it is possible to:

    ? retain existing customers longer by regularly sending them useful information and assessing their

    response to this;

    ? organise promotional campaigns in accordance with anti-spam legislation;

    ? follow up responses to promotional campaigns, so as to ensure that salespeople devote attention

    to interesting prospective customers;

    ? collect summarised and detailed statistics, thereby making it possible to evaluate a campaign on a

    day-to-day basis;

    ? it is simple to do and only needs to be prepared once (the layout of the newsletters, target groups,

    contacts and so forth);

    ? attract more visitors to the website.

3.1 Communication

    3.1a What message needs to be sent to the target group by e-mail? What should the thrust of it be?

    o Determine the thrust of the message. For example, is it for an ideal espresso drinker or

    for a connoisseur of fine espresso coffee.

3.1b How is it to be laid out and structured?

    o Design a standard e-mail newsletter. Think of the image which it needs to project, and

    its message.

3.1c To make it easier to find the website banners may be placed on various other websites.

    o Design a banner for Medellin Secret.

3.1d These banners must be placed on relevant websites which are visited by Medellin Secret’s

    target group.

    o Name five relevant websites where they should be placed and give reasons for your choice.

    3.2 Loyalty cards

    3.2a Medellin would like its customers to remain just that, that they remain loyal to it. One of the

    ways of securing customer loyalty is the introduction of a loyalty card.

    o Design a loyalty programme for the customers of Medellin Secret. In it, clearly set out

    what benefits it will have for customers and how much it is likely to cost Medellin Secret.

    3.2b Medellin Secret will need to create a database in order to store the details of these loyalty

    cards and other related information. Design a database for Medellin Secret.

    o The first step is to name the database fields, such as name, address and place. What

    other fields need to be named. Provide as much detail as possible. 3.2c Once all of the fields have been named, a start can be made with the actual development of

    the database.

    o Now build a database for Medellin Secret using MS Access or some other program. 3.3d Now use the Medellin Secret database to ascertain which people are good, loyal customers.

    o Think of five campaigns for Medellin Secret to bind its good, loyal customers to the

    company, that is to ensure that they remain loyal.

4 Supply chain management

The costs involved in procurement, storage, transport and so forth can rise considerably, if incorrect

    choices are made. These problems can be avoided by first considering supply chain management.

    The company will also be setting up a website to sell coffee. The supply chain will also change as a

    result.

4a The logistics process is an expensive part of Medellin Secret’s business operations.

    Transporting the coffee beans from the plantations to the Netherlands is a costly process.

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    o Analyse the current supply chain and incorporate it into a diagram. Draw a distinction

    between the upper (suppliers) and lower (customers) parts of the supply chain in

    relation to both the actual and online shops.

    4b Medellin Secret would also like to transport its coffee to other countries, only it would then

    need to answer a number of questions.

    o Think of the most feasible scenario yourself for Medellin Secret, if it is also to start

    exporting to other countries.

     Examples

    1. Should beans be imported which are to be processed into espresso coffee by a local

    coffee brewer? Yet who will be responsible for packing and transporting it?

    2. Alternatively, should the espresso be sent to customers in ground form directly from the

    Netherlands? Yet who will be responsible for transporting it to the customers?

    3. Are there other alternatives?

    4c Incorporate this new supply chain into another diagram. Again draw a distinction between the

    upper (suppliers) and lower (customers) parts of the supply chain in relation to both the actual

    and online shops.

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