JUAN VALDEZ CAFE FRANCHISEIN PETERBOROUGHSTUDENT: HUMBERTO GIL MEJIALECTURER:DEVORAH GREEVEMBA ANGLIA RUSKIN UNIVERSITY

INDEX1.INTRODUCTION2.HISTORY OF COFFE3. COFFEE FROM COLOMBIA4. JUAN VALDEZ CAF PROCAFECOL FRANCHISE5. REPORT OVERVIEW6.PESTEL ANALYSIS6.1 POLITICAL6.2ECONOMICAL6.3 SOCIOLOGICAL6.4 TECHNOLOGICAL6.5 LEGAL6.6 ENVIROMENT7. PORTER 5 FORCES8. JUAN VALDEZ PORTER 5 FORCES8.1SUPPLIER POWER8.2 BUYER POWER8.3 COMPETITIVE RIVALRY8.4THE THREAT OF SUBSTITUTION8.5THE THREAT OF NEW ENTRY9. SWOT ANALYSIS10. JUAN VALDEZ CAF SWOT ANALYSIS11.THE MARKETING PLAN12.CORPORATIVE OBJECTIVES13.GROWTH STRATEGY14.MARKET PENETRATION15.MARKETING SEGMENTATION16. JUAN VALDEZ CAFE SEGMENTATION ANALYSIS17. MARKETING SEGMENT18.MARKET POSITIONING19 REFERENCES20 APPENDIX

1. INTRODUCTIONCoffee is a beverage that is made from hot mix of roasted beans of the coffee plant (Coffea Rubiaceae family known as coffee).Although commercially is the world's number one beverage is estimated that one third of the world population consumes it (half the world's population consume tea).Coffee is the worlds most widely traded tropical agricultural commodity, accounting for exports worth an estimated US$ 15.4 billion in 2009/10, when some 93.4 million bags were shipped.19:13 07/04/2013 (International Coffee Organization 2013) (1)Its popularity is largely due to its invigorating and stimulating effect, due to the presence of caffeine in about 0.75% to 1.5% by weight.Caffeine acts in this case as a stimulant and diuretic acting on the central nervous system, heart, veins, arteries and kidneys. 2.HISTORY OF COFFEThere are two possible origins of the name of the drink (2)In one the name derives from the Arabic word qahwah (similar to its use and pronunciation in Slavic languages, and another that connects etymologically with the province Kaffa in south western Ethiopia (Abyssinia) credited as being the birthplace plant that gives rise to the drink.Those plants growing wild in Kaffa were taken to southern Arabia where they were cultivated about 500 years ago. The origin is doubtful considering how the name of the drink in pronounced in different languages. In Chinese kai-fei, in Swedish and Danish kaffe, in Dutch and German Kofi, in Finnish kahvi, Kav Hungarian, Polish and Ukrainian kawa in Persian and Turkish kahveh, ending in Castilian, Portuguese and French coffee.3. COFFEE FROM COLOMBIAIs the name that is given to 100% Arabica coffee beans produced in Colombia's coffee regions in altitude specific ranges between 1,000 and 2,200 meters above sea level (masl). It arises from the particular combination of factors related to latitude and altitude of the land of coffee in Colombia. Its soils, the botanical origin of the species and varieties of coffee produced, climate characterized by the double passage of the Intertropical Convergence Zone the changing topography, light, favorable temperature range, an adequate amount and distribution of rainfall during the year and local cultural practices including, selective collection processes and processing of the fruit, washed and dried. These factors together lead to the production of a protuberant coffee, soft, clean with relatively high acidity, body balanced pronounced flavor and excellent sensory profile.The products Behind Caf de Colombia have been famous by its remarkable marketing campaign. The most important factor is that Colombian growers are aware of the importance of origin in a cafe not only from the point of view of their quality, but from the perspective of social environment. Colombia differs from other countries by having a coffee institution working for sustainable production welfare to coffee growers called the Colombian National Federation of Coffee Growers (CNFCG) is known since its foundation in 1927 (3)4. JUAN VALDEZ CAF PROCAFECOL FRANCHISE

Procafecol S.A. was created in November 2002 by the National Federation of Coffee Growers of Colombia, coinciding with the opening of a store first Juan Valdez Coffee in Bogot D.C (4)Since 2004, Procafecol S.A. began the process of expansion of Juan Valdez Coffee shops in different cities starting with Bogota, the capital of Colombia and in 2006, following the creation of the brand began Juan Valdez products through new channels of distribution as supermarkets and institutional channel of Colombia. This new dynamical allowed the company to reach the premium Colombian coffee products to more consumers in Colombia and in the worldThe year 2005 was the beginning of the international expansion for Juan Valdez . This year marked a milestone for the brand after its arrival in major markets like Spain and the United States. From 2006 were created alliances with companies such as Falabella of Chile, Casual Brands Group in Spain and Latincaf - Int Food Services Corp of Ecuador, which made it possible to open the doors of new stores Juan Valdez Coffee to the public offering of new territories best premium Colombian coffee.5. REPORT OVERVIEWJuan Valdez the franchisees flagship character was created in 1959 and since then represents more than 500,000 Colombian coffee families. Its primary function is to promote to the world the work and dedication that make it possible to obtain an exquisite product and unique as Colombian coffee.(5)For years, Juan Valdez has been dedicated to the promotion of Colombian coffee and put his firm in 2002 as a backup to the products that bear his name and coffee shops where real live premium Colombian coffee experience.Thus was created the Juan Valdez Coffee shops, where thanks to our coffee and our paper we provide an unforgettable experience for each of our clients.Since the creation of Juan Valdez as the brand that identifies the premium Colombian coffee, their products, and coffee shops became the showcase for excellence to boost the work of farmers, reflecting their responsibility and commitment to the producers of the best beans from Colombia.6.PESTEL ANALYSISPESTEL is an acronym that stands for Political, Economical, Social, Technological, Environmental and Legal. It is used by many international consultancies to describe an analysis that is used for determining the opportunities and risks of global expansion. (PESTEL, 2013)6.1 POLITICALCHANGE TAKING PLACEIMPACT ON JUAN VALDEZ CAF

Fair trade , and high standards certification,ISO 9000 awarded by the government of Colombia (CNFCG)Recognition and endorsement of the Juan Valdez brand to become the international image of Colombian coffee

Franchisee created by the Colombian government in 2002(PROCAFECOL)The implementation and start of a brand which offers pure Colombian coffee.

Wide support of the Peterborough council towards the development of the city. with the Juan Valdez products, engaged and focus in service and qualityCreate jobs in the UK in the area of Peterborough, Cambridgeshire as part of the mission and values of Juan Valdez Cafe

6.2 ECONOMICALCHANGE TAKING PLACEIMPACT ON JUAN VALDEZ CAF

The March 2013 average composite indicator price for coffee fell to $1.32 per pound, a 28 per cent drop compared to last February-NASDAQ-(6)The business is becoming less profitable for coffee traders.

The monthly average composite price for Colombian Milds suffered an even bigger drop during the same period, falling 34 per cent from $2.44/lb to $1.61/lb (International coffee organization)The business is becoming less profitable for coffee growers

The current economic recession in the U.K can affect the marketDespite the UK falling into a triple-dip recession, consumers are increasingly willing to pay 2.50 or more for a cup of coffee. In the 13 weeks to the end of May, Costa's jumped 8.4%. Last year Costa's profits rose 38% to 70m.

Rising of the peso, Colombian Currency (7)It affects the exportations of the coffee from Colombia

6.3 SOCIOLOGICALCHANGE TAKING PLACEIMPACT ON JUAN VALDEZ CAF

Encourage people to know more about the development of Arabica coffee in Colombia Customers, will know the difference between Colombian Arabica flavour and other kind of coffee

79.6% of coffee consumers care about the conscious effort to recycle. (Mintel, 2012)Juan Valdez Cafe is committed to the care and respect for the environment through sustainable practices

6.4 TECHNOLOGICALImplement of special machines for making different kinds of coffee and cappuccino and American designed exclusively to handle Colombian Arabica coffee beans (PROCAFE COL)Juan Valdez Cafe will use cutting edge technology in all its stores, in areas such as coffee machines, customer service, systems, inventory, etc.

Baristas trained in the Specialty Coffee Association of Europe replicating their practices with the best technological standards in Juan Valdez Coffee.(PROCAFECOL)Technology based on the best training techniques for baristas

6.5 LEGALInternational certification ISO 9000 for quality standards for Colombian coffee (CNFCG)Better quality standards, better acceptance from customers

6.6 ENVIROMENTALClimate changes is varying the temperature on the Colombian Andes affecting coffee harvests (8)Can Affect the supply of coffee from Colombia

Constants tropical pests affecting crops of coffee in the coffee ColombianCan Affect harvests, and coffee growers

7. PORTER 5 FORCESIt is a very accurate approach for planning corporate strategy proposed in 1980 by Michael E. Porter in his book Competitive Strategy: Techniques for Analyzing Industries and Competitors.

The point of view is that Porter five forces determine the consequences of long-term profitability of a market or some segment of it. The idea is that the corporation must evaluate their objectives and resources against these five forces which govern industrial competition. (Vector study, 2008. Five forces competition) 1. Threat of new entrantsThe market or segment is unattractive depending on whether the entry barriers are easy or not to cross by new entrants that may come with new resources and capabilities to seize market share.2. The rivalry among competitorsFor a corporation will be more difficult to compete in a market or in one of its segments where competitors are very well positioned, are very numerous and fixed costs are high, it is constantly faced with price wars, aggressive advertising, promotions and entry new products.3. Bargaining power of suppliers A market or segment will not be attractive when providers be very well organized, have strong resources and to impose its conditions of price and size of the order. The situation is even more complicated if that supply inputs are key for us, no substitutes or are few and expensive. 4. Bargaining power of buyers.A market or segment is not attractive when customers are not very well organized, the product has several or many substitutes, the product is not very distinct or is of low cost to the client, allowing you to make substitutions at a very low cost. As better organization of buyers better the requirements of lower prices, higher quality and service and therefore the corporation will be a decline in profit margins. 5. Threat of substitute productsA market segment is unattractive or if there are actual or potential substitutes. The situation is complicated if the substitutes are more technologically advanced or may enter lower prices by reducing profit margins of the corporation and industry (9) 8. JUAN VALDEZ PORTER 5 FORCES 8.1SUPPLIER POWER Coffee rust, devastates coffee farms in some parts of the coffee zone in Colombia. The rust infects leaves on coffee plants and Quickly Inhibits Their Ability to produce the coffee beans that end up in our favorite arabica or robusta coffees. Recent strikes by farmers in Colombia make the international price of coffee rising increasingly. The overproduction of coffee in countries like Vietnam is detrimental to the international price of grain, lowering price, making this business profitable. 8.2 BUYER POWER According with a retail research analysts survey UK coffee market grew by in 7.5% in 2012 but the UK economy in the same year had a negative growth rate of -0.3 in the final quarter of 2012 which can affect the buyer power (10) 8.3 COMPETITIVE RIVALRY A lot of competitors. There are three main brands of coffee in the UK. Costa Coffee with 1,342 coffee shops and owns the 40.4% of the market, Starbucks with 743 coffee shops and owns the 30.7% of the market and Caffee Nero located in third with 490 coffee shops and owning the 14.0% of the market. The next competitor in the list will be ATM Coffee but they only own the 1.7% of the market. (Rupert, N.2012)8.4THE THREAT OF SUBSTITUTIONAlthough Juan Valdez Cafe stands out as a very competitive franchise in the Peterborough area are major brands and franchisees as Costa, Starbucks, Cafe Nero, plus many independent shops that make the business is very competitive.8.5THE THREAT OF NEW ENTRYOne important threat for a coffee shop business like Juan Valdez is the threat of new entry of more competition in the market9. SWOT ANALYSISThe SWOT analysis (Strengths, Weaknesses, Threats, Strengths, and Opportunities) provides an assessment of the state of the organization both internally and externally. The analysis is divided into two different axes: External and internal level: taking into account the threats or opportunities that come from outside as well as weaknesses or strengths of the organization internally. The SWOT analysis is a useful tool because of its effectiveness to set goals within the company.

10. JUAN VALDEZ CAF SWOT ANALYSISSTRENGHTWEAKNESS

Is a franchise well known for the quality of coffee worldwideThe franchise Juan Valdez competes with many other like Costa, Cafe Nero, Starbucks, Azzurro, Ritazza, Coffee Republic, etc ...

Sustainable growth since it first coffee shop, opened in the International Airport El Dorado, Bogota (2002)Generally, consumers dont know so much to recognize Colombian coffee

Juan Valdez a shop specialized in high quality Arabica coffee, promotes a better national (UK) and worldwide generating a good reputation of ColombiaMost of the Consumers dont recognize the difference between Arabiga and Robusta coffee beans

OPPORTUNITYTHREATS

Previously successful expansion to other Countries such as U.S.A, Chile, Spain, Saudi Arabia, etcTriple dip European recession.

Equality of opportunities for everyoneCompetence coming from the Independent shops

Growing economies in Latin America and AsiaRisk of recession in the growing economies in the near future

11.THE MARKETING PLANThe marketing plan is the basic tool of management that needs to bring market-oriented company that wants to be competitive. In its implementation will set the various actions to be undertaken in the area of marketing, to achieve the objectives. This cannot be considered in isolation within the company, but fully coordinated and consistent with the strategic plan, being necessary to make the corresponding adjustments regarding the overall business plan, as it is the only way to respond to valid needs and issues raised.12.CORPORATIVE OBJECTIVESPositioning Juan Valdez as the brand premium Colombian coffee in Peterborough

Generate satisfaction in customers around products, environment and services.

Build and consolidate an organizational culture focused on service and innovation.

Strengthen the coffee business models through the coffee ritual generating value toshareholders

13.GROWTH STRATEGYANSOFFS MODELThe matrix or matrix Ansoff product / market is a strategic analysis tool mainly in the area of marketing, used to define what are the strategic alternatives organization require to increase sales. For startups will be the entrepreneur or the CEO who must use it to squeeze all the information that can facilitate strategic tool.Representing each of the axes of the Ansoff matrix current and future possibilities of the company in terms of products and markets, this matrix provides four strategic alternatives:Existing ProductsNew Products

Existing MarketsMarket PenetrationThe firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share.Product DevelopmentThe firm seeks growth by targeting its existing products to new market segments.

New MarketsMarket DevelopmentThe firm develops new products targeted to its existing market segments.DiversificationThe firm grows by diversifying into new businesses by developing new products for new markets.

Ansoffs Model. (Vector study, 2008)

14.MARKET PENETRATIONAccording with a recent study the penetration of the coffee shops, There are more than 5,000 branded coffee shops in town centres, retail parks, railway stations, airports and even drive-thrus along motorways across the UK, and last year they served up 2bn of coffee double the sales recorded in 2005. Add in the independently owned coffee shops another 5,500 and the near 5,000 that have rapidly sprung up in outlets from corner shops to Wetherspoons pubs, and there are already well over 15,000 places to find a caffeine fix.15.MARKETING SEGMENTATIONMarketing segmentation involves dividing a market into smaller segments of buyers with distinct mixes. Through market segmentation, companies divide, large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs. (Kotler and Armstrong, 2012 p.214)There are four major segmentations variables for consumer Markets according to Kotler and Lane (2012). Geographic Segmentation that calls for dividing the market into different geographical units, such as nations, regions, states, counties, cities or even neighbourhoods. Demographic Segmentation which divides the market into segments based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality. Psychographic Segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics. Behavioural Segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses to product. (Kotler and Armstrong, 2012 p.214)16. JUAN VALDEZ CAFE SEGMENTATION ANALYSISThe company will focus on two main segments of the takeaway market.Age segmentation: Ages of high coffee drinkers, Juan Valdez cafe will focus on the group of ages that have more takeaway market. In this case the company will attack the market between 15-44 years. (Mintel, 2012)Working status: Type of job takeaway coffee drinkers has. Full time and part time employees will be the market that the company will focus due this to groups use more takeaway service. (Mintel, 2012)

Sit-in or takeaway visits to coffee shops, by detailed demographics, 2011 (Mintel, 2012. Figure 29)Sit-inTakeaway

%%

Gender:

Men77.120

Women84.715.3

Age group:

15-2475.328.9

25-3468.632.1

35-4476.326.7

45-548414

55-6488.95.7

65+91.32.5

Working status:

Full-time74.925.6

Part-time84.415

Not working85.511.5

17. MARKETING SEGMENTA market segment is a group of consumers who share similar needs and desires. For instance, we can differentiate between car buyers looking for a economical means of transportation, buyers looking for a luxury car, and buyers looking for excitement and adventure.We must be careful not to confuse a segment and a sector.Marketers do not create the segments, but identify them and then select those who are to lead. Marketing segment offers more advantages than mass marketing. The company can design, publicize, deliver the product or service and put a price so as to satisfy the target market.The company also define the program and marketing activities to better respond to the offer of competitors.However, even a segment is sometimes fictional, at least in some sense, since not all members of a segment want exactly the same product, so companies must submit offers flexible to all members of a segment.Age group segmentation: Juan Valdez Cafe will focus in the drink-take away market, between ages 15-44 because they are the potential group of clients.18.MARKET POSITIONINGAn effort toinfluenceconsumerperceptionof abrandorproductrelative to the perception ofcompetingbrandsorproducts.Itsobjectiveis to occupy a clear, unique, and advantageouspositionin theconsumer'smind (Kotler and Armstrong, 2012)

High PriceHigh QualityLow QualityLow PriceCosta CoffeeStarbuck CoffeeFast food/Sandwich shopCaff Nero takeaway express line

19. MARKETING MIX:ProductJuan Valdez product mix designed to attract premium coffee lovers or good quality. The products taste decidedly Colombian - either lunch or coffee with variations depending on the weather and temperature. They offer the classic black and very recognized Cafe, Americano capuccinno, etc. In summer, for example is offered Frappe coffee and ice is mixed. In winter the most desired product is the cappuccino in marketing include identity elements, such as clothing, jumpers, agendas, backpacks, bags, etc..The location of Juan Valdez Cafe in the city centre of Peterborough is key to determine the success of a chain of retail. Juan Valdez Cafe looks to cater to your target market with strategically placed shots (Kotler and Armstrong, 2012 )PromotionJuan Valdez coffee undertake massive campaigns to disseminate its clients through:Television: trade through regional channels in Peterborough and also using video clips representing corporate identity of Colombian coffee.Permanent contest in coffee shops where consumers are rewarded with clothing, bags, calendars, etc. ...Sales promotion: Juan Valdez cafe special users with 'Caf Citizen Card' for clients rewarding. It is a loyalty program for new customers and retain existing ones.ProcessThe ordering process and delivery in the CCD is based on principles of self-service. But now, in most coffee shops the waiter comes and takes the order and deliver order in the table. In the take- away process is more simply, the customer orders and a red recyclable glass is given.Physical evidencea) Juan Valdez coffee and red colors are used in logo,the red represents vitality, passion for coffee. Along with Juan Valdez and his mule Conchita representing the image of Colombian peasants working in the collection and processing of coffee, for a high quality valueb) Architecture and Decoration: Largely wood interior with tropical colors and granite based mountains and coffee plantations in Colombia, representing an environment friendly and colourfulc) Literature: The literature provided by Juan Valdez cafe is indicative of its youthful image. The menus, posters, brochures are designed to attract potential clientsPeople: People in Juan Valdez coffee have the belief that motivation and personal skills are of great importance placed. Their employees are like friend to the client, but also know about international standards of hygiene and cleanliness.MARKETING MIX:ProductJuan Valdez cafe is designed to attract premium coffee lovers or good quality. The products taste decidedly Colombian - either lunch or coffee with variations depending on the weather and temperature. It will be offered the classic black and very recognized Cafe, American, cappuccino, etc. In summer, for example is offered Frappe coffee and ice is mixed. In winter the most desired product is the cappuccino in marketing include identity elements, such as clothing, jumpers, agendas, backpacks, bags, etc..PricePrice is the monetary value we place upon our products offer them to consumers. Some we can design strategies related to price are:The age range is between 15 and 29 years have tried to get a policy that can satisfy all its customers. The price of a cup of coffee varies from 2.50 to 3.70 Prices are fixed and the elevation is due most of all to taxes than anything else.Americano..........................................................................................................1.75Capuccino...........................................................................................................2.30Frappe................................................................................................................3.70Expresso............................................................................................................2.50Espresso cortado...............................................................................................2.30Chocolate...........................................................................................................2.25The location of Juan Valdez Cafe in Peterborough city centre is key to determine the success of a chain of retail. Juan Valdez Cafe looks to cater to your target market with strategically placed shots.PromotionJuan Valdez coffee undertake massive campaigns to reach more clients through:Television: trade through regional channels in Peterborough and also using video clips representing corporate identity of Colombian coffee.Different kind of contests in coffee shops where consumers are rewarded with corporate image as clothing, bags, calendars, etc. ...Local Radio Stations commercials emphazing on Peterborough and Cambridgeshire Area in triple A time.Billboards: on the streets of Peterborough and surrounding areas if it is allowedProcess:The ordering process and delivery in Juan Valdez Cafeis based on principles of self-service. But now, in most coffee shops the waiter comes and takes the order and delivery order in the table (Marketing teacher 2012) (12)Physical evidence:a) Juan Valdez coffee and red colors used in logo. The red represents vitality, passion for coffee. Along with Juan Valdez and his mule Conchita representing the image of Colombian peasants working in the collection and processing of coffee, for a high quality valueb) Architecture and Decoration: Largely wood interior with tropical colours and granite based mountains and coffee plantations in Colombia, representing an environment friendly and jovialc) Literature: The literature provided by Juan Valdez Cafe is indicative of its youthful image. The menus, posters, brochures are designed to attract potential clientsPeople: People in Juan Valdez coffee have the belief that motivation and personal skills are of great importance placed. Their employees are like friend to the client, but also know about international standards of hygiene and cleanliness

REFERENCES AND BIBLIOGRAPHY(1) International Coffee Organization, London 2013. World coffee exports, by value and volume 1997/98 2009/10 [ICO Graphic]. International Coffee Organization (ICO). (CMR, 10/12). [Online] Available at: http://www.ico.org/trade_e.asp [Accessed 7 April de 2013] (2) The history of coffee including a Chapter of Chicory, William Law, University of Harvard 2008, pages 10 to 20.(3) Colombian National Federation of Coffee Growers, Coffee from Colombia, description of the coffee [Online document], Cafe de Colombia, available at http://www.cafedecolombia.com/particulares/es/el_cafe_de_colombia/ [Accessed 7 April 2013](4) Franchise Juan Valdez Cafe, description of its creation, mission, vision and shareholders, [Online document], available at http://www.juanvaldezcafe.com/index.php/page/show/35/menu_internal [Accessed 7 April 2013](5) Colombian National Federation of Coffee Growers , Get to know Juan Valdez, the character who represents Colombian Coffee, [Online animation], English version available at http://www.juanvaldez.com/#/conoceme/(6) Price of coffee in International markets [online report] and graphic statistic, available at http://www.nasdaq.com/markets/coffee.aspx [Accessed, 7 April 2013](7) Rise of the price of Colombian Peso, see comparisons with other currencies, [online report], available at http://www.xe.com/currency/cop-colombian-peso [Accessed 7 April 2013](8) how-climate-change-could-eventually-end-coffee, threats for the coffee plant under the global warming [Online journal article], available at http://www.usnews.com/news/articles/2013/03/27/buzzkill [Accessed 7 April 2013](9) Vectors Study, 2008. Five forces of competition. Vectors Study. Available: http://vectorstudy.com/management_theories/five_forces_of_competition.htm [Accessed 07 April 2013](10) How coffee shops are still blooming in the UK, [online article} Available at http://www.marketingweek.co.uk/quality-quest-keeps-coffee-sector-full-of-beans/3033917.article

(11) Kotler, P., Lane K., 2012. Marketing Management. 14 ed. Global: Pearson.(12) Marketing Teacher LTD 2000, 2012. Process as part of the marketing mix. Marketing Teacher. [Online] Available at: [Accessed 02 December 2012]

APPENDIX CAFE DE COLOMBIA BRAND

JUAN VALDEZ BRAND

JUAN VALDEZ CHARACTER AND HIS MULE CONCHITA

JUAN VALDEZ GLASSES

JUAN VALDEZ GLASSES

MODELO DE TIENDA JUAN VALDEZ CAFE