DUBLIN COLLEGE OF ADVANCED STUDIES

Business Studies

MARKETING PRACTICE

STUDENT RENATA ALBUQUERQUE SILVA re.albuquerques@hotmail.com

INSOMNIA COFFEE COMPANY

MARKET ANALYSIS

INTRODUCTION

The Insomnia Coffee Company was established in 1997 in a bookstore in Galway and since then they have expanded their business all over Dublin. In December 2010 the company become 100% Irish, been equally owned by Bobby Kerr (Chairman), Harry OKelly (CEO) and John Clohisey.

In 2003 the company merged with the gourmet sandwich company, Bendini & Shaw, to combine a quality food offering with its hot beverage range. Since then the company has grew rapidly through and now has more than 80 stores & outlets around Ireland, which includes partnerships with stores as SPAR / BWG, EASON, Meadows&Byrne and GardenWorks (Plantagen). Insomnia has at least 2 different layouts, the main one would be with ambiance to sit down and usually an own store, and the second one would be to fit smaller shops with insomnia coffee express machine.

The company is Irelands leading independent premium coffee and sandwich caf chain and currently is consolidating a strong position in Ireland while looking for further opportunities at home and abroad.

MARKET ANALYSIS

1) SWOT Analysis

Strengths

1. Irish Company 100% Fairtrade

2. Largest coffeehouse in Ireland

3. Deals / Promotions & Price

Weaknesses

1. Suppliers coffee beans production

2. Customer Service

3. Range of Cold Beverages

Opportunities

1. Extend Range of Cold Beverages

2. Expansion of retail operations

3. Improve publicity

Threats

1. Rising prices of coffee beans & dairy products

2. Increased competition of Cold Beverages from Starbucks and Costa Coffee

a. Strengths

The company is 100% Irish owned and support Irish suppliers, which means that try to use locally source all around Ireland.

Insomnia seems to be more expensive than other shops when checked the regular prices of drinks and food. Although, the company has great and really worth deals that makes the costumer always ask for a snack.

The company have 3 main deals that are:

- Any Hot Beverage (small or large) + Any Pastry (including cakes, muffins and croissants) for 3,75 => this deal make the client save up to 2,50

- Any Hot Beverage (small or large) + Any Sandwich wedge, Wrap or Flatbread for 5,00 => this meal deal makes the client save up to 3,00

- Any Hot Beverage (small or large) + Premium Sandwich, Panini, Bap, Bagel, Hot toastie or Salad for 6,00 => with this deal the costumer save up to 3,00

- Any Hot Beverage (small or large) + Any Savoury Croissant for 4,50 => the customer save up to 2,50.

b. Weaknesses

To use Irish locally sources the company is exposed to everything good or bad that happen with their suppliers. At this market, coffee beans price are the biggest weakness, although Insomnia try to surround this with partnerships and investing on their suppliers, getting the suppliers close to the company.

Insomnia customer service is not one of the best ones, at the same time is not so bad. In general the service is fast and efficient, although is not usual get a smile from the employees.

The company menu does not include any cold beverages, so by the time that summer comes, the company does not make so much money as during the winter and the sales might decline a little.

c. Opportunities

When summer starts, Insomnia tries to come with a few cold beverages to refresh their customers, although this should be done during the whole year since in Ireland you never know how the weather is going to be.

Insomnia should also invest more on publicity about their deals and promotions because seems that people do not know about it and usually who knows is regular customers. In the end their publicity is more as word of mouth than their own publicity.

By the time the company is the largest coffeehouse in Ireland, although should expand their stores in areas around town.

d. Threats

As said before, the company is 100% supply by Irish market, what means that if the economy in Ireland goes down, the prices of coffee beans and dairy products from their supplier raises even when the company have a partnership.

The competitors are already well known about their range of cold beverage, and by the time that Starbucks and Costa Coffee are expanding their retail operations, if Insomnia does not do anything about start your own range of cold beverage, the company will lose market share to their competitors.

2) PEST Analysis

POLITICAL ECONOMICAL

The level of political stability within Ireland

Industry-specific rules and regulations

Local economic environment within Ireland

Taxation level

Buying power of consumers

SOCIAL TECHNOLOGICAL

Changing family and/or work patterns in Ireland

Consumer preferences

Changes in lifestyles of population

Changing values among population

Developments in agriculture

Innovative technology

Biotechnological developments

3) Market Competitors

A research show that the main competitors of Insomnia are Butlers Chocolate, Starbucks and Costa Coffee, because of this just will be analysed these three competitors.

I. STARBUCKS

Starbucks is an American company which first started business in UK in 1998. It has about 50 stores around Ireland and is internationally known by good beverages and service. Even though can be expensive you go for a coffee there since they do not have big deals. They are famous by frappuccinos, shakes and iced beverages on the menu, also for the option to customise your coffee or drink. To be an internationally coffee shop, when you go there, you know that you are not paying the cheapest coffee in the city, but tastes good and the employees in general are friendly enough. Even though, sometimes they get something in the drinks by mistake.

II. COSTA COFFEE

Costa Coffee is a British company which first started business in London, UK. It has about 20 stores around Ireland, but is quite expensive and do not have deals in case that you order a hot beverage and a sandwich or pastry, just students has discount when shows the student card. The highlight of this company is not customer service or price, is atmosphere. Any branch that you visit, depending the time, might take a while to be served, so the nice and cosy seats would be worth it.

III. BUTLERS CHOCOLATE CAF

Butlers Chocolate is an Irish company founded in 1932 in Dublin. As the name says, they are specialised in chocolates, so you should not expect to go for a sandwich there. It is possible to find about 15 stores around Ireland and UK, they also have presence in New Zeland, Pakistan and United Arab Emirates. The company offers the client truffles and chocolates when you get

a hot beverage. The prices are average for a coffee, and they do not really have big deals. Butlers Chocolate has a great customer service even though the stores do not have seats in or if they have is just a few.

4) Market Research

A research was submit with the questions and options below and all question market (*) must be answered.

1* Have you ever heard about our company, Insomnia Coffee Company?

Yes

No

2* What is your gender?

Female

Male

3* How old are you?

Under 18

18 25 years old

26 30 years old

31 35 years old

Over 35

4* Are you a student?

Yes

No

5* Do you work?

Yes

No

6* In the past 30 days, how often did you go to a coffee shop?

Over 5 times a week

3 4 times a week

1 2 times a week

Slightly often (less than 3 times a month)

Rarely (once or never last month)

7* What time did you usually go to a coffee shop? (Could be select up to 3 options.)

Breakfast time (Between 7h 11h)

Lunch time (Between 11h 14h)

After Lunch time (Between 14h 17h)

After Work time (Between 17h 20h)

Night time (After 20 oclock)

8* Usually in your day-by-day, when you go to a coffee shop, which type of product you usually ask for?

Hot Chocolate

Tea

Cappuccino

Americano

Caffe Latte

Macchiato

I just go for food

Others

9* When you choose your regular coffee shop, how this items would influence your choice?

Insignificant Neutral Significant Very Significant

Taste

Promotions / Deals

Price

Range of Products

To customize your drink

Be an Irish Company

Customer Service

10* Which of the following coffee shops are you used to go? (Could select all that apply)

Insomnia Coffee Shop

Starbucks Coffee Shop

Costa Coffee Shop

Butlers Chocolate Caf

Bewleys Caf

Newsagents (coffee machine)

Others

11 If you are not used to go to any Insomnia Coffee Shop, what do you think that we should improve for you go more often? (Just should be answered if not use to go)

Range of Hot Beverages

Range of Cold Beverages

Range of food

Customer Service

Price

Deals & Promotions

Others

12* Do you think that if Insomnia have more range of cold beverages as Frappuccinos, shakes would you go more often?

Yes

No

13* Which flavours of frappuccinos would be your favourites? (Could select all that apply)

Chocolate

Straberry

Caramel

Others

14* Compared to our competitors, in your opinion is our products quality better, worse, or about the same?

A great deal better

Quite better

About the same

Quite worse

Really worse

Dont know our brand

15 Do you have any other comments to improve our company? (Open answer)

The research had 25 answers and everyone seems to know Insomnia Coffee Company and think that the quality of products at Insomnia is about the same or better when compared with competitors.

Analysing the answers can be realised that 84% of the customers are aged between 18 30 years old, shared between male and female. Also notice that 76% are students and 80% of their customers work. In general, customers go to a coffee shop once a week during peak times as breakfast time (between 7h 11h) or after work time (between 17h 20h) and usually ask for Hot Chocolate or Cappuccino.

When choose a coffee shop, the most important thing for a customer is Tasty drinks and food followed by Promotions & deals, Price, Range of products and Customer service, and is not as that important for them to customise your own drink or be an Irish company.

The research shows that nearly 37% of customer goes to Starbucks and about 34% to Insomnia, from this can be realised that Starbucks is the strongest competitor of Insomnia, followed by Costa Coffee and Butlers Chocolate.

Customers are not used to go to Insomnia sometimes because of the range of cold beverages and deals & promotions. At the same time, more than 85% of people that go to a coffee agree that if Insomnia Coffee Company has a Range of Cold Beverage as Frappuccinos and Shakes, they would go more often to Insomnia and the favourite flavours would be Chocolate and Strawberries.

5) Conclusion

As analysed above, is possible realise that the customers miss a range of cold beverages and the publicity should be improved.

While competitors do not have good deals as Insomnia, the customers seems do not know about all the deals and promotions that they can get at the company since one of the things that most part of the answers show is that should be improved deals at Insomnia. Even when most part of Insomnia customers are Students, the company does not have student discount as competitors have, student discount does not seems to be a big deal though, since students goes quite often to Insomnia that have quite great deals, as described before.

Then, by the time that Insomnia Coffee Company improves the range of Cold Beverage and Publicity, certainly customers would stop to go to Starbucks, mainly competitor, to get a Frappuccino and go to Insomnia where they know that the taste and quality of products are better and have worth deals for breakfast time, with toast or pastry, or lunch time, with sandwich, salad or wrap.

REFERENCES

Insomnia Coffee Company Website

http://www.insomnia.ie/

Starbucks Website

http://www.starbucks.ie/

Costa Coffee Website

http://www.costaireland.ie/

Butlers Chocolate Caf

http://www.butlerschocolates.com/

MURPHY, Aileen and GARAVAN, Thomas N. Chapter 1 - The Brewing of Insomnia.

http://www.bobbykerr.com/wp-content/uploads/2011/02/Insomnia-Case-Study1.pdf

YELP.ie To check reviews about taste and service at Insomnia Coffee Company. 29.04.2014

http://www.yelp.ie/biz/insomnia-coffee-company-dublin

YELP.ie To check reviews about taste and service at Starbucks Coffee Shop. 29.04.2014

http://www.yelp.ie/biz/starbucks-dublin-11

YELP.ie To check reviews about taste and service at Costa Coffee Company. 29.04.2014

http://www.yelp.ie/biz/costa-coffee-dublin

YELP.ie To check reviews about taste and service at Butlers Chocolate Caf. 29.04.2014

http://www.yelp.ie/biz/butlers-chocolate-cafe-dublin-29

ATTACHMENT 1

Market Research