1.1 Growth of Gloria Jean’s Coffees

Gloria Jean’s Coffees was founded in Chicago in 1979 by Gloria Jean and Ed Kvetko. The master franchise for Australia and New Zealand was acquired in 1995 by Saleh and Irvine, who set up their first store in Miranda, Sydney in 1996. By 2004, they had expanded to more than 200 stores across Australia.

Having set up coffee houses in every Australian state and territory, Nabi (Saleh) and Peter (Irvine) returned to the US in 2005 and purchased the international brand and roasting rights for all countries outside of the US, said Tony White, Gloria Jean’s Coffee General Manager – International.

In 2009, they acquired the master franchise and franchised stores for the US, comprising 102 stores across multiple states.

In essence the child bought the parent – the franchise became the franchisor. It’s a great story on the power of the franchise model – how you can start out with one store and eventually become the brand owner. The brand was rapidly transformed and expanded into new international markets. Gloria Jean’s Coffee is now in 40 markets via the master franchise route and has over 800 stores globally.

The development of new markets to enhance growth, particular across South – Asia, commenced with India. After the Gloria Jean’s Coffee brand was developed and expanded across many tier-one and tier-two Indian cities in a variety of formats, the focus switched to Pakistan as the Indian coffee market began to mature (Gloria Jean’s Coffees Australia, 2013).

1.2 Current Competitive Market Position

The current market position of Gloria Jean’s Coffee is the program of issuing license to operators around the world rather than operating as a company stores. Management believes in issuing license to operators who live locally due to easy accessibility in offering quality service to their customers. Gloria Jean’s Coffee franchise comprises of both single and multiple operators. There are selection criteria before franchise can be given to an operator which is screening the specific qualifications of an operator: background of the retailer, business skills, customer service orientation and financial resources. Expansion of Gloria Jean’s Coffee is achieved by combining experienced business operators that can build up large market areas.

Gloria Jean Jean’s Coffee current market makes use of internet facilities and music to attract and retain existing customers. This approach is used to entertain their existing customers with the aim of retaining and attracting more customers to their shop. In addition to that, only young female workers are employed as staff in most of their outlets.

Gloria Jean’s Coffee current market also depends on the first choice of flourishing the average class, with top incomes, new objective and looking for uniqueness. Gloria Jean’s Coffee has originated as a western tradition, new lifestyle, and important fraction of the current process of discovery of local market. Seminar programs on development in new coffee consuming markets insisted that coffee shop as the main motivating factor behind consumption in rising market has contributed effectively in setting a pace in the coffee industry and in the area of growth it occurs in the Asia-Pacific region, which has significant expansion (Brando, 2013).

Furthermore, increase in demand in the rising market happens to be a major factor behind the global coffee market.

According to International Coffee Organization, (2013) asserted that rising markets were expected to account for 50% of Global coffee consumption by 2010. The local firms could possibly be the main factor in the rising markets by providing locally customized products, mostly in urban areas where consumers are driving development.

The Asian part of the continent is occupied by the rising markets of coffee. Consumers’ disposable income increases as the economy of the country improves and most of the residents are exposed to western life style.

Record also reveals the rates in Southeast Asia are estimated to increase from 20% to 30% per year. Consumption of coffee growth is connected to growth of the economy and since the economy of Southeast Asian countries continues to increase, there will not be a necessary slowdown in the demand of coffee (McFarlen & Pardomuan, 2013).

Nevertheless, customers are well-informed about coffee. They truly understand the types of coffee and the kinds of beans. Customers are also sensitive to the amendment of prices whenever it occurs. Amendment in coffee prices might possibly lead to change in preferred brand demanded by customer due to low switching cost. Consequently, customers may easily switch to other available brand should in case the favorite brand is not available for purchase. Various brands that sell the same product and most of which are well recognized such as Starbucks owned by John Culver, president of Starbuck China and Asia Pacific insisted that Starbucks aims at opening its stores in key metropolitan cities across the region (Asia Life, 2013).

According to the present global market and the new trend in the market, Gloria Jean’s Coffee must be conscious of the existing strategies of their international expansion which must be thoroughly scrutinized and correlates with the present condition of Global market mostly the regional and country that reveals potential market significantly.

A considerable demand from the rising market could be an indicator for Gloria Jean’s Coffee management to strategically develop competitive advantages in the industry and also segment the international market by strengthen their position in the Southeast Asian market in order to gain competitive advantages in the coffee market.


Gloria Jean’s Coffee has benefitted well-built competitive edge as a result of numerous strengths acquired such as ceaseless improvement, recognition and positioning of brand, excellent management. A favorite coffee retailer and one of the fastest growing franchises in the operation in the world that offers consumer with a range of product and services has enabled Gloria Jean’s Coffee to position their product on quality and experience. Research and development also contributes immensely to the success of Gloria Jean’s Coffee, particularly the effort in continuously being innovative in the market. Continuous improvement of new and exciting goods and services such as different flavor of drinks and coffee related products shows how the Research and Development process works well in organization.

Management of Gloria Jean’s Coffee is in search of reliable operator that can be partnered with, possessing the ability and skills in comparison with their defined standard of excellence in customer service.


Regardless of Gloria Jean’s Coffee strengths, there are still some flaws that can easily hinder the management from achieving their performance in the industry. Some of the recognized weaknesses are: lack of geographic segmentation of target market, strict franchise criteria and less variety than competitors.

To be able to achieve a remarkable performance, the following approach are to be utilized which are as follows: reevaluation of current franchise strategy, modification of products offered for services, raising standards and increase in customer awareness in order to strengthen the current position within the competitive market.

1.3 New Marketing Strategies

According to Ansoff, (1965) described the only way to analyze the new marketing strategies that an organization may use to develop the business is by using the Ansoff’s Matrix. This considers the opportunities of offering existing and new products within the existing or new markets and also the rate of risk attached to each of the strategy.

Existing Products New Products


Market Market Penetration Product Development


Market Market Development Diversification

Figure 1.0 Ansoff Matrix

1.3.1 Market Penetration

This strategy focuses on selling the company’s existing products or services into the existing markets to acquire a higher market share in the industry. It is the first strategy most organizations will look into because of the lower amount of risk it has. The strategy entails offering more services to existing customers and also to new customers who can be thought of as being in the same marketplace. For instance, if the existing customers base of Gloria Jean’s Coffee comprises of people aged between 16 and 25 then this strategy would entail attempting to offer more of the existing goods and services to the same group.

Management of Gloria Jean’s Coffee need to reflect thoroughly on this strategy especially if they are not at the point of investing so much on their business or not capable of taking risks because of the low amount of risks in connection with the strategy.

There are four approaches Gloria Jean’s Coffee can adopt during the implementation of this strategy which are stated as follows:

 Maintain or increase the products market share

 Dominates growth markets

 Drive out your competitors

 Increase existing customer usage

Maintain or increase the products market share

It entails paying much attention on the areas of sales, marketing in charge of regulation of prices and promotion of the goods and services. This can be achieved by implementing a strategy that is made up of a combination of competitive pricing strategies, advertising and sales promotion.

Dominates Growth markets

This strategy is meant to identify differences in the age distribution of the consumers or customers and to then aggressively market the goods and services to this age bracket.

Gloria Jean’s Coffee customers are dominated by the people in the age bracket of 20’s to 30’s patronizing them on regular basis. Substantial growth in market share and dominance in coffee business can be achieved by offering services to adult instead of young people by offering quality services and also making available attractions for adult people such as playing music and designing a logo that can attract adult people as well.

As an internal market advisor to the CEO of Gloria Jean’s Coffee, there is a need to define the strategy of providing the market intelligence or customer feedback that enables to inform the executive team of the current dynamics of the coffee market. Database of the customers provided will suggest the team to decide if there should be a growth in the existing market or a new market. This decision will be based on how Gloria Jean’s Coffee management approaches the emerging market. And if the team’s decision defines the growth market as a new one then a market penetration strategy will be replaced with the one of market development.

Drive out competitors within the market

Several organizations find themselves in a saturated market which makes it difficult for the organization to achieve further market share with a different approach. The strategy of restructuring a mature market by driving out competitors within the market requires an aggressive promotional campaign, supported by a pricing strategy designed to make the market repellent for smaller competitors. For instance, renowned organizations dominate the market through advertisement made in the newspaper, telecoms and cable TV industries where the larger players dominate.

Increase existing customer usage

Several tactics are used in increasing the consumption of the goods and services with the aim of persuading the existing customers more frequently. These tactics are: adding value to the existing goods and services, loyalty schemes and making alterations to the product that encourage greater consumption. These tactics is aimed at binding customers to the goods and services of the company by making it more complex for them to change their mind or move to another supplier. Ability of Gloria Jean’s Coffee to achieve higher consumption by customers can be improved with the aid of adding a special pleasant flavor to their drinks and also adding some other attractions to their services to retain existing customers and prevent them from moving to another supplier.

A successful market penetration strategy depends on comprehensive information of the market and competitor activities. It depends on having successful products in a market that is already known.

1.3.2 Market Development

It is also recognized as market extension. A strategy like this, the business sells its existing products to new markets. This can be achieved in the course of promoting market segmentation to help in identifying a new clientele base. This strategy assumes that the existing markets have been fully taken advantage of; therefore, there is a need to create new markets. There are various approaches to this strategy which are stated as follows:

 New geographical markets

 New product dimensions or packaging

 New distribution channels

 New market segment created by different pricing

New geographical markets

The business expands by exporting their products to other new countries. It would also require setting up other branches of the business in other areas that the business had not been established. Various businesses have taken up the method of issuing franchise as a way establishing branches in other countries. For instance, Gloria Jean’s Coffee was established in Chicago in the year 1979, master franchise was given to Australia and New Zealand in 1995. Today, Gloria Jean’s Coffee has expanded to more than 200 stores across Australia.

New product dimensions or packaging

This entails repacking the product in another dimension in a way it will attract a different customer base. A franchised operator in another country may look at the new costs it will involve in the process of changing the package of the goods and services, the new market requirements and a need to alter the marketing messages so that they are appropriate to the country’s culture.

New distribution channels

This entails selling the products through e-commerce or mail order. Selling goods and services through e-commerce will attract a larger customer base since we are in a digital age where most people access information online often. Several organizations have transformed themselves from high street retailers into online retailers. This will require every manager to have the skills to fulfill online orders, whether they are receiving incoming calls or processing online orders. There will be a need to demonstrate knowledge of the operational changes an organization would face such as centralized warehouse rather than local outlets.

New market segment created by different pricing

In different pricing policies, the business could change its prices so as to attract a different customer base or create new market segment. The most significant aspect of this approach is whether or not existing customers can easily alter their purchases to benefit from the new market pricing.

1.3.3 Product Development

New products are introduced into existing markets. Product development can be different from the new created product in an existing market or it can entail the modification of an existing product. Modification of the product would probably alter the outlook of the product, improve the performance and quality of the products, in the process of doing this, it will appeal to the existing market. For instance, a car manufacturer offers a range of car parts with the aim attracting the car owners in purchasing a replica of the brand.

Every organization that already possesses a market for its goods and services might try to follow a strategy of developing more goods and services with the aim of retaining the existing customers.

This product development strategy necessitates changes in business operations such as, a research and development function to introduce new discovered products to the existing customer base. There are various approaches to this strategy which are stated as follows:

 Requires research and development

 Requires assessment of customer needs

 Requires a clear path for brand extension

Research and Development

Gloria Jean’s Coffee regard research and development as one of the main factor to be successful in the market thus they regularly advise their employees to be creative. This is obvious through an uninterrupted development of new and existing products, being the various drink flavors and coffee related products. Introducing more new products and establishing new channels of distribution, coincides with Gloria Jean’s Coffees aim of becoming the most loved and respected coffee company in the whole world (Gloria Jean’s facility, 2008).

Assessment of Customer needs

This is mostly carried out by the marketing department of every organization with the aid of questionnaires. On the other hand, customer needs can also be apparent to people who are in customer-facing roles, due to their closeness to every customers by paying much attention to customers problems with the goods and services.

A head of customer service team have the privilege to gather data that may initially appear negative but can offer an organization the opportunity to meet customers’ needs effectively. Comprehending the needs of every customer of an organization and how these can be interrupted in product development is essential to success when using the strategy of assessment of customer needs.

A clear path for brand extension

Brand extension is a method of launching a new product by using an existing brand name on a new product in a different kind. An organization using brand extension hopes to leverage its existing customer base and brand loyalty. However, the risk associated to this strategy is high as it is difficult to predict success and if a brand extension is unproductive, it can impede the parent brand. Common sense would suggest that for brand extension to be productive logical involvement between the original product and the new product, but there have been many exceptions to it.

It is difficult to predict what will work and what will not work and even with the benefit of perception it is sometimes hard to see why some attempts at brand extension succeed at the same time other fails.

1.3.4 Diversification Strategy

Diversification strategy achieves growth by developing new products for the entire new markets. It is naturally risky than product development because by the understanding, the organization has little or no experience of the new market. New skills and approaches are required in the course of carrying out the marketing and operations activities. This will necessitate the need for an organization to acquire an existing organization operating in the new market. It is also known as a risky strategy being the fact that it involves two strange entities which are new products being created and the business organization that is unaware of problems that may occur in the process of running the operations. The fact remains that a new market is being targeted which will possibly bring the problem of having unfamiliar characteristics.

For an organization to embrace such a strategy, it must have a comprehensive knowledge of what it expects to acquire in terms of its growth and also have a clear assessment of the risks involved.

Diversification can be classified into two categories which are related diversification and unrelated diversification. In related diversification, business remains in the same industry in which it is familiar with. For instance, a juice manufacturer diversifies into baking of cake. The diversification is in the same industry which is the food industry while unrelated diversification, there are usually no previous industry relations or market experiences. For instance, one can diversify from a mechanical industry to a food industry.

1.4 Market Penetration for the Sustenance of Business

1.4.1 Marketing Mix Strategies

Market penetration known as selling the company’s existing products or services into the existing markets to achieve a profitable market share in the industry will require effective marketing mix strategies to achieve the set target of the organization.

Marketing mix can be regarded as the combination of different marketing assessed variables being used by the firm to market the organization goods and services. After recognizing the market and gathering of the primary information about the market, directing marketing program, to decide upon the instruments and the strategy to meet the needs of the customers and the challenge of the competitors is the next step to be carried out. This offers an optimum combination of all marketing ingredients so that organizations can attain their goals such as profit, sales volume, market share, return on investment etc. The marketing ingredients can be known as 4P’s which are stated as follows: Product, Price, Place and Promotion (Abrams, 2000).

The marketing mix is known as set of controllable factors that the organization can use to influence the customer’s decision in buying of goods and services.

Market penetration can be achievable by Gloria Jean’s Coffee shop within the competitive market of coffee industry over the next 3 years with the following marketing mix strategies which are:


Product can be modified into two places which are product differentiation and product uniqueness. Customers are with different tastes and perceptions. Customers possess different point of views in wants, resources, locations, buying behavior and buying practices.

Product Differentiation

Market segmentation enables Gloria Jean’s Coffee to separate large, heterogeneous markets into unit outlet for every customer to be able to access their products and services effectively and efficiently suit their needs. Gloria Jean’s Coffee must decide on a value proposition which means how the product will create differentiated value for targeted market or segments and what positions it will occupy in those segments.

Gloria Jean’s Coffee should improve on the goods and services provided for customers by adding food to their menu instead of cakes and pies. Most customers would find it comfortable to dine instead of buying coffee alone at the outlet. Therefore, menu such as breakfast and lunch should be provided on the menu along sides with light food such as sandwiches and cakes.

Product Uniqueness

Gloria Jean’s Coffee should decide on better coffee beans or varieties of coffee beans from around the world. Beans could be obtained in areas like South America and Indonesia. These will enable customers to develop variety of brew that they could make their choice from; also, the special beans could even provide a better taste of coffee for different categories of customers.

Customers suffering from obesity problem need not to be worried since there will be use of low fat milk, creamer and artificial sweetener. This service is specially offered to customers suffering from obesity so as to comply with World Health Organizations agenda of providing healthier food and beverages.


Price is the amount the consumer must exchange to receive the services offered. The price of product and services depends on different elements and for this reason; there is a constant change as a result of changes in the elements (Borden and Marshall, 1959). The main factor in pricing is the decision on the cost of the product, strategy for marketing and its expenses related to activities like advertisement, distribution or any kind of price variation in the market.

As at today, coffee is the world second largest traded product in the market. Instead of a consumer going all the way to Gloria Jean’s Coffee for a cup of drink especially coffee, some customers prefer to buy different brands of coffee from the nearest available supermarket. Consumers possess different behaviors towards the sensitivity of price. At the low price end, coffee is often considered a commodity and easily demonstrates price sensitivity (Eselius et al, 1997). For instance, Starbuck’s coffee case in 1994 freeze in Latin America raised the prices of Arabica beans worldwide, which in turn puts pressure on the prices of Starbucks coffee beverages. Consumers did not draw back from the higher prices. The Starbuck’s brand stands for quality and consumers have shown great willingness to pay for that quality (Eselius et al, 1997). Other threats to Gloria Jean’s are the customers of Gloria Jean’s Coffee have low or no switching cost in switching to other competitors for example to Coffee Club and the ability of its customers to brew their own coffee.

Therefore, it is important for Gloria Jean’s Coffee to build its brand around the quality and pricing to increase its customers base and loyalty. The Australian coffee market is very competitive but consumers are brand-loyal and becoming more sophisticated (Hoffman, 2006).


Place can be known as the distribution channel either a physical store or virtual store (Rasmussen et al, 2007). Gloria Jean’s Coffee adopted a strategy of establishing an outlet in every accessible area where businesses can be generated. This is the most important factor in determining the success of a retail chain. Gloria Jean’s Coffee offers quality services to their target market with well located outlets around the world.

In addition, customers look for cozy and warm place to hang-out to discuss business, for students to do their assignments or homework or have fun with their families and friends. Gloria Jean’s Coffee could provide a better environment for their customers by using comfortable sofas and furniture, warm ambience with cool music within the area and also provide handicap facilities. This will improve consumers’ perception towards the outlet.

Most customers patronize coffee outlet due to the fact that it is a neutral place for people to discuss business and do their homework and assignment. This shows that the presence of internet connection facilities is very much helpful for them including students whom usually do their assignments and homework at any of the Gloria Jean’s Coffee outlet available around them. Availability of Wi-Fi connection for students to make use of might benefit Gloria Jean’s coffee as more customers walk in to patronize any available outlets around them for usage of Wi-Fi, which will indirectly be connected to purchasing of coffee in the outlet.


Promotion is one of the most powerful elements in the marketing mix. Promotion activities are useful for communication and influencing a target market to patronize the coffee outlet. Promotional activities are mainly intended to supplement personal selling, advertising and publicity. Promotional activities are publicity, advertisement, public relations, exhibition and demonstrations etc. Advertisement is regarded as the most powerful element of promotional activities. The aim of advertisement is to create and develop the image of goods and services in the market (Culliton, 1948).

Gloria Jean’s Coffee barely does any advertisement and promotions. Advertising their new products and services on media and publications in local newspaper will attract and create more awareness to their customers.

Endorsement by local and international celebrity could be functional and helpful to Gloria Jean’s Coffee, making it known to people as their choice of coffee. This will strategically attract the attention of their customers and fans all over the world and within the community the outlets are established.

Social and environmental effort can be seen as a good means of increasing customer awareness towards the brand name. Charity and other related activities such as funding the coffee bean farmers, building schools for the society and clinics could be perceived by customers worldwide as promotional activities. They could also participate in Government plans of reducing the consumption of electricity and water by doing so in the outlets itself.

Provision of customer incentives to customers in a way of rewarding their loyal customers with membership card or loyalty card could also encourage customers to stay loyal to the brand and also continue patronizing their outlets. These rewards will signifies how they are honored and treasured as their customer. They could provide them with discounts coupons and free refills for those who have membership card and encourages those that have not sign up to sign up for these benefits.

1.4.2 Digital Marketing Communication

Digital marketing communications also known as digital communication tools are regarded as the rising of the new communication tools with the development of internet technologies. Digital communication tools are mostly known as Instagram, Twitter, Facebook, blogs and other search engines. The dawn of these tools automatically transformed the available communication tools which are journals, newspapers, visual (television and cinema) and audio (radio) into conventional communication tools. Digital marketing tools are more regarded than the traditional marketing tools since there is an interactive session between the consumers and producers in the marketing process (Winer, 2009).

According to Ozturk, (2013) asserted that digital marketing communication tools offer a communication environment for both consumers and producers to be accessed by anyone regardless of social identities. Platforms for people to come together and share their opinions vary according to their income level, educational background and professional life. Worth of characteristics like: gender, race and religion are been misplaced in digital environments and people can build intimacies without any social discrimination.

Gloria Jean’s Coffee barely functions on any of the social platforms. Operating more on social marketing communication platforms such as Facebook, Twitter, LinkedIn, MySpace and many more will enable the mixture of different race, gender and religion across the world without any social discrimination.

1.4.3 Customer Relationship Management

According to Peppers and Rogers, (1999) asserted that customers are empowered in recent times compare to yesteryears when there was no internet. The internet is picking up the pace of the trend towards greater customer empowerment. Customer relationship management is a complete approach that ascertains in taking full advantage of relationships with all customers, including internet or e-customers, distribution channel members and suppliers. Developing acquaintances of each customer that patronize an organization through data mining techniques and a customer-centric business strategy enables every organization to proactively and consistently offer more products and services for improved customer retention and loyalty over longer periods of time.

Gloria Jean’s Coffee must focus on delivering the highest value to customers through improved communication, faster delivery of goods and services and personalized goods and services. Effective implementation of Customer Relationship Management and e-business applications will have a huge return on investment (Lange, 1999).

1.5 Projected Competitive Position for the Future


Competitive structure of any organization is very fundamental to the daily operations of a business. The structure enables a better presentation of the industry as well as identifying the competitors in the entire market. Competitors appear in any forms either in a direct form or through an indirect form. Today, Gloria Jean’s Coffee is having several competitors within the coffee industry such as Starbucks Coffee and Hudson’s Coffee. The two coffee owners are known as the largest coffee chain in Australia (Gee and Gee, 2006).

The most important thing is to identify the major competitors but it is also vital to know the indirect competitors as well so as to enable the organization to achieve a summary of all the possible rivalry that could impede the coffee business within the market.

Customer Services

Gloria Jean’s coffees monitors and search for a credible business partners with a good profile who would contribute their zeal and commitment of good coffee and best customer service to join the family of Gloria Jean’s Coffee. In addition, Gloria Jean’s Coffee is also in search of business owners who possess the ability, skill and the financial strength to meet the stated standard to operate a franchise. It is expected of Gloria Jean’s Coffee partners to possess an excellence standard in customer service. With much respect to the ethics of the Gloria Jean’s Coffee company, customer service is very much valued as an important role which is also required of their partners to share the same ethics in anywhere in the world their outlet is established. Gloria Jean’s Coffee outlets around the world are known for providing a friendly environment and offer a customized service (Franchise Business, 2007).


Technological developments in the coffee industry focus on three important areas which are:

• All year round harvesting,

• Excellent quality beans and

• Development in the management in coffee pest.

Gloria Jean’s Coffee buys, roasts its own coffees and controls the process from the bean to the cup (Gloria Jean’s Coffee goes Wi-Fi, 2003). It is very much vital for them to know every aspect of the coffee industry in order to ensure that the products and services offered are top standard quality products and very much available to customers at any time. Internet facilities can also be used as a side attraction to bring in more customers to their outlets (Martin, 2005).

Marketing Information System

According to Kotler, (2002) regarded marketing information system as a mix network, comprised of unified relations among people, machines and procedures to offer a flow of prepared information, depending on the internal and external sources of the institution involved in the formation of marketing decision base.

Due to competitive pressures in the market, Gloria Jean’s Coffee is required to possess the ability to compete, to create and to sell developed products swiftly than before (Abu and Abdul, 2002)

Every organization has more than one source of information, but the problem depends on how to use and manage this information effectively and efficiently. The presence of computers and other operating data equipment has made it easy and cheaper to run and analyze vast amount of marketing data and also provide information necessary for effective marketing decisions (Abdul and Ahmed, 2002).


Gloria Jean’s Coffee known as one of the global brands in coffee industry has successfully expanded their business across the world. The franchising approach is used in the expansion of business all around the world. Nevertheless, a slight change in trends in the market keep occurring, Gloria Jean’s Coffee should reevaluate and make some amendment in the strategy used toward potential market.

Growing economy, urbanization rate, ease of doing business rank and coffee consumption trends in some parts of the world should be consider when establishing in an area. Strengthening position to acquire competitive edge over competitors in the market is very much fundamental.

Gloria Jean’s Coffee management aiming at strengthening their position in the market should effectively integrate and utilized the following strategies which include: reevaluation of franchise strategy, modification in product offered, raising standards, and increase Customer Awareness.

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