OMPANyCaSe Beano’s Cale: n Egyptian Flavor COMPANY ~car”lO’S BACKGROUND Cafe, one of the most successful and popular cafe chains in =~ypt. has branches throughout the country, including locations in ::” ro. Alexandria, and Giza. At Beano’s, customers can enjoy excele- quality coffees, soft drinks, shakes, and infusion drinks, as ” as a wide variety of sandwiches, hot meals, and desserts. Beano’s Cafes aim is to offer its customers a convenient, relax-9 place where they can purchase food and beverages of a high :uality at an affordable price.
The cates have a distinctive layout ,,”‘d style which is achieved through a combination of contempo? ry design and warm colors that give them a pleasant atmosphere. –e cafes environment is characterized by simplicity, elegance, : eanliness, and a modern design. It is known as a place where ung people can gather and where people can enjoy an afford::0 e outing, listen to the latest musie, and use wireless Internet. Cafe, and from other smali, local cafes. Despite these concerns in 2000, Beano’s opened its first cafe in Egypt, introducing new coffee products such as cappuccino and espresso to the Arabie market.
Beano’s wanted to increase its market share and target a new segment-senior citizens-along wit h maintaining and/or increasing its appeal to the youth segment, which represents the majority of its customers. The senior citizens represented the higher socio-economic class; however, Beano’s discovered that young clients represented up to 70 percent of their daily clients. Beano’s Cafes higher management wanted to retain its satisfied clients while also increasing its share of the customer base. They therefore put together a new marketing strategy.
REVISING THE MARKETING STRATEGY EY MARKET –e creators of the Beano’s Cafe Group had wanted to open a -ew coffee shop in Egypt for a long time but they saw problems .. ,entering the Egyptian market. They believed that the Egyptian oopulation would not be keen on coffee made from unfamiliar, -ew ingredients. The Egyptian market was locally driven toward ::Jr ental cates, Turkish coffee, and shisha (water pipe); thus, 3eano’s’ marketing strategy was to introduce the Egyptian consurner to a new cafe experience.
There was also fierce competi: on from other coffee shops, including Cilantro Cafe and Costa Beano’s Cafe’s management team knew through customer surveys carried out in their chains that 60 percent of their customers keep coming back because of staff friendliness, 20 percent because of the quality of the service, and 20 percent because of the overall atmosphere at Beano’s Cafe. The cafs’s new marketing strategy was divided into three parts: The first was 13 percent value (offering more for the same price). he second part was 17 percent quality (offering an affordable, quality cate experience, and improving the taste of the coffee), and the final part was 67 percent service (improving the face-to-face interaction with customers inside the cafe). Beano’s placed the greatest emphasis on improving the level of customer service in its cafes. The company did this in a number of ways. First, management decided to speed up the serving process by allocating one minute for taking orders, seven minutes to make the order, and a final one minute 244 Part Three I
Designing a Customer-Driven Strategy and Mix modern cates were established in the Egyptian market; the focus was more on the local “kahwa” (Turkish/Arabic coffee), tea, and shisha. Beano’s Cafe positioned itself as an affordable, modern cafe with a lively, entertaining environment. Beano’s Cafe’s targeting approach became youth oriented. The cafe was representing a new approach to coffee, selling cappuccino and java solo drinks like espresso. Thus, the segmentation approach started to focus more on the youth differentiated segmentation market approach.
As mentioned, the use of a kitchen provided the company with differentiation over the competition, however, Beano’s also has a new advantage: It offers a creative art foam that is placed on top of the cappuccino. The consumer’s name or birth date can be written on a cappuccino cup or any picture can be drawn with the because the mafoam. Consumers can even do it themselves chines are manually operated. This level of personalization, allowed Beano’s to differentiate itself from its competitors by offering its customers what they want and exceeding their expectations.
By satisfying customers’ desires, Beano’s sawa growth of the company and an increase in sales of its coffee products. III to give the table the bill. Therefore, the whole process took a very fast nine minutes. Beano’s also improved its communication with customers by greeting them and paying attention to their needs. Beano’s has an ultimate advantage that none of its competitors have-the kitchen. Having a kitchen allows Beano’s to offer a larger menu selection. Customers can also ask for items not included in the menu or can modify their chosen item.
These options are not available in most cates in the region and impress consumers. Having the advantage of a kitchen allowed Beano’s to discontinue using ready-made food and instead making every meal to order, thereby differentiating itself from its closest competitor, Cilantro Cafe. This enabled customers to modify their orders. It also permitted customers to create new, customized products. Beano’s is now able to forecast real quantities and therefore store essential, everyday ingredients, getting rid of unnecessary stock of less in demand products. This method turned out to be very efficient in their storage management.
Becausecustomer service is such a high priority in the company’s new marketing strategy, the marketing department conducted a new survey designed to improve customer service. It was executed through the cafes’ branch managers and administrated by a smali team from the research department. One of the most effective questions concerned what customers liked and disliked about Beano’s Cafe. The survey revealed that customers liked the cafe’s service, atmosphere, and quick response; they did not like the company allowing some private celebrations to be held, nor did they always like the type of musie played in the cafes or the furniture.
Beano’s bega n to consider how to react to ali of these reported dislikes from its consumers, especially as the competition was rising with both Cilantro Cate and Costa Cafe, In addition, other new cates, such as On The Run Cafe in the Mobil Petroi Station, were improving their quality and pricing to an affordable level. Despite making these advances, Beano’s had weaknesses to overcome. The cafes were not located in the main, central business streets in Egypt. These untapped areas of business opportunities prevented the company from increasing its market share.
Cilantro, a competing cafe, employed successful promotional tools to spread its brand image in Egypt, including high-profile commercials. Beano’s could not match the level of advertising in terms of budget and instead focused more on customer relationship management (CRM) and relationship marketing (RM) To this end, Beano’s introduced a customer loyalty and smart card program that enabled customers to collect points for each separate order. The customer could then redeem the points and receive free products. Beano’s also targeted ali customer segments by introducing a promotional Beano’s points card.
Customers pay for the cards, starting at 50 to 200 LE and use them whenever they wish. The cards turned out to be very effective for customers who are entertaining friends and for family outings. Another area that Beano’s needs to improve upon involves making the cate more family friendly-an area where Cilantro is excelling. Cilantro Cafe provides coloring books and crayons for children, encouraging families to spend more time in the cafes and thus increasing business from this particular market segment. OELlVERING ON CUSTOMER SERVICE As customer service featured 50 prominantly in their marketing strategy,
Beano’s had to ensure that once a high level of service was achieved it was also maintained. One strategy put in place aimed at achieving this was mystery shoppers, who visited different branches to monitor and evaluate the service they receive ano the quality of the cafe’s products. Among other things, they note how fast and responsive the staff members are and whether the deliver on time. The mystery shopper, a regular customer chose by the branch manager, also evaluates the quality of the coffee served, the food, the environment, the speed and care of sta and the cleanliness of the facility, including the bathrooms.
RESPONOING TO THE CUSTOMER As previously mentioned, market research carried out by the company indicated that customers did not like waiting in some of the Beano’s Cafe chains and did not like its prices. Its response to the problems was to put more tables in the crowded location: and to reduce prices for some popular, existing products, wh E increasing prices for newly introduced products. Customers ais disliked the musie, which did not change over the course o~ the day, and at the various locations, some said the cafcs playec the “same musie for each branch in every vi sit. Manaqemec: responded by introducing new musie every couple of hours in Ci chains. To improve the brand image of Beano’s, the company also OEcided to redesign the cafe’s logo, making it more attractive to c 5tomers. More money is also being spent on advertising for ne and existing products. Most of the advertising appears in prin ec materials to be displayed in cate branches to motivate COnSUrT’E’ purchase of the newly launched products. BEANO’S CAFE’S MARKETING MIX SEGMENTATION In the beginning, Beano’s Cafe focused on appealing to the whole Egyptian market, especially young people.
The first focus for the company was to create brand awareness, as people did not understand the word ” Beano’s. ” So,the cafe owners added the word cafealittle modification that solved the issue. At that time, not a lot of Beano’s Cafe’s marketing mix begins by developing new produ _ by studying consumers’ needs, and then developing and crea ~~ a strong brand. Beano’s Cafe’s distinctive design and pleasan c-mosphere are the first components in its unique dining experien ~ Market research indicates that the brand’s most distinguishing E::ture is the company’s use of the vibrant orange color for all ad E’tising.
The company also stands out because it is the only local cc== Chapter 7 I Customer-Driven Marketing Strategy: Creating Value for Target Customers Smart pricing, reviewed from a consumer perspective . Updated produet lists wit h new menu offerings. 245 “… :~ers desserts, which are prepared by La Poire. According to 3″e’s market research, 21 percent of customers indicated that =-:e-: was the most prominent feature of the cafe. ‘:==110’5is putting great efforts in establishing new branches : :cpping newareas, bot h local and international.
The new 10=”Eas are Sharm El Sheikh, Hurghada El Gouna Resorts, and, =~ationally, Paris, France. –e company advertises its existing products, but in only a few =:=5: FM radio, on the October Industria I City bridge, and in 2;azines. For the Cafe’s new products, it relies only on banners nt of the chain. The focus of Beano’s Cafe’s advertising and _+otion is primarily on the youth segment (ages 18 to 25). The -:-::>any is collaborating with the advertising agency Adhoc, – ::n is spearheading the marketing campaign. The agency has 3~ed out market esearch and has also designed and imple-=-~ed promotions. The company also collaborates with White ::_0 o, a full-service design studio that offers creative, profes_-al graphic designs and development services in order to deliver –= oest image of the brand to customers. White Studio designed -= company’s brochures, logos, ads, and flyers. -or its principal advertising campaign, Beano’s used Nugoom – , 104. 2 FM), and Nile FM (100. 6 FM), presenting creative ads –a: would catch listeners’ attention because of their humor, :-unds, and clever use of musie.
The company made extensive use ::-= orint media resources, including magazines (Teen Stuff, Sayyedaty, – =oer alnugum, Laha) and newspapers (Alahram, Alahbar, Almasr :: oum, Almussauar). Ali were very effective media in building . set and usage imagery. Beano’s created its advertising in a simple . ay by featuring its logo and photos of its cafes to build brand s. vareness and invite ali potential customers in for a visit. The -::’Uthful, non-intrusive ads generated a positive response from the :c’get audience and collectively helped to expand the cafe’s brand age in the market.
The ads also give customers an opportunity :0 receive unique offers, making them memorable and meaningz: . II. Each month, the cafe introduces a new special offer; for example, in December 2009, it offered a special on American coffee ·. th chocolate fudge, and at the beginning of 2010, caramel “‘1acchiato with a muffin. Those offers are the unique invention of 3eano’s Cafe and are not offered in other cafes in Egypt. The of”er of the month is always supported with printed brochures, oosters. nd other ads that allow customers to get familiar with tne latest promotions. .z; Better hiring and training programs to ensure a capable staff who deliver more than what is expected. Better quality coffee: People are happy to go to Beano’s but respond negatively to the quality of coffee. By offering better coffee, the company will be able to compete wit h the 10cal, classie Arabicffurkish coffee shops. By offering new, modern European flavors, Beano’s will also be able to compete with the international chains (such as Starbucks) entering the market.
According to Beano’s Cafe’s previously mentioned market research, the main source of the information about the brand was Beano’s itself, and then the information obtained from its customers. Research indicates that there is still a performance gap in advertising activities that the company should explore and take advantage of in the future. Its future marketing approaches should also concentrate on e-marketing via YouTube, Twitter, Facebook, MSN, Google, online radio, digital radio, e-mail marketing, mobile phone advertising, Yahoo online display banners, satellite TV channels, PRand sponsorship of cultural events and musical concerts. Questions for Oiscussion 1. Based on the segmentation variabies, how is Beano’s Cafe now segmenting and targeting the coffee market? 2. Discuss how Beano’s positioned itself in the Egyptian local market. Also explain how Beano’s differentiated itself from the competition. 3. What changed first, the Beano’s customer or the Beano’s Cafe experience? Explain your response by discussing principles of market targeting. 4. Briefly outline a marketing campaign targeting a new segment for Beano’s Cafe.
Sources: Adapted fram Haddad, The Marketing Excellence Handbook, BUE British University Egypt, Dar El Fekr El Arabi Publications (2008); Kotler, P. , & Armstrong, G. (2010), Ptlnciples of Marketing, 13th edition, Pearson/Prentice Hall; Grewal & Levy (2010), Marketing, 2nd Edition, McGraw Hill; William Pride, & O. C. Ferrell (2010), Marketing, Cengage Learning; Adcock, D. , Halborg, A. , & Ross, c. (2000), Marketing Princip/es and Practice, 4th edition, FT/Prentice Hall; Blythe, J. (2005) Essentia/s of Marketing, 3rd edition, Prentice Hall/FT; Brassington, F. & Pettit, 5. (2005), Princip/es of Marketing, Prentice Hall/FT; Dibb, 5, Simkin. L. , Pride, W. and Ferrell, O. C. (2001), Marketing: Concepts and Strategies, 4th edition, Houghton Mifflin. FUTURE STRATEGIES As Beano’s develops and looks to the future, it has identified areas where it needs to improve to continue and build upon its success: o Continued development in terms of the cafes atmosphere, pricing, produet, and staff. Increased investment in the branches and the equipment to enhance the atmosphere.