Michael John V.

Dayondon
Christopher A. Munar
Jeston D. Barrientos
COFFEE PROJECT SCRIPT
INTRODUCTION
Coffee is classified differently depending on the context, but is primarily a consumer good, specifically
a convenience product, and an agricultural beverage commodity.
In a marketing context, coffee is categorized as a convenience product. This classification is based on
consumer buying habits.
COFFEE AS A CONVENIENCE GOODS
Coffee is a prime example of a convenience good because it is readily available and easily consumed,
with products like instant coffee, single-serve pods, and grab-and-go coffee from convenience stores
and gas stations catering to busy lifestyles. This focus on convenience is driven by consumer demand
for speed and ease, which allows people to quickly get their caffeine fix without a long or complicated
preparation process.
Key aspects of how coffee functions as a convenience good include:
Speed and ease of preparation: Instant coffee is a classic example, requiring only hot water for a
quick beverage. Similarly, single-serve pods and ready-to-drink (RTD) coffee products allow for very
fast consumption.
Wide availability: Coffee can be purchased nearly everywhere, from specialized coffee shops to
grocery stores, gas stations, and vending machines. This widespread distribution ensures it's easy to
access when the need arises.
On-the-go consumption: The rise of grab-and-go coffee options, like those at convenience stores and
drive-thrus, responds directly to consumer lifestyles that prioritize speed and ease of purchase.
Innovation in convenience: The market continues to innovate to meet convenience demands, with new
products like cold brew, nitro, and flavored options available in convenient formats, notes Food
Business News.
Convenience-driven sales: The demand for convenience is so strong that it's a key driver for sales,
especially in the convenience store sector where coffee is a major draw.
Marketing Strategies
Marketing strategies for coffee as a convenience good focus on maximising accessibility, speed of
service, and immediate brand recognition. The key is to make the purchase as effortless as possible
for the on-the-go consumer.
Widespread Availability: Ensure the coffee is available in a multitude of convenient locations beyond
traditional coffee shops, such as convenience stores, grocery aisles, gas stations, and vending machines.
Consistent Quality: The product must deliver a reliable, satisfying experience every time. Consistency
in taste and temperature builds trust and encourages repeat purchases.
Easy-to-Use Packaging: Utilize practical, single-serving, and easily transportable packaging (e.g.,
disposable cups with secure lids, instant coffee packets) that fits the "on-the-go" lifestyle.
Optimized Local Presence: Optimize online listings (e.g., Google Business Profile) and use local SEO
(search engine optimization) to ensure the store appears in "coffee near me" searches, driving
immediate foot traffic.
Michael John V. Dayondon
Christopher A. Munar
Jeston D. Barrientos
Pricing Strategies
For coffee as a convenience good, the primary pricing strategies leverage the product's accessibility and
ease of purchase, often involving competitive pricing, cost-plus pricing, economy pricing, and bundle
pricing.
Competitive Pricing: This is a very common strategy where prices are set based on what competitors
charge. Since convenience goods have many substitutes, pricing in line with or slightly below the
competition is crucial to attract and retain price-sensitive customers who are looking for a quick,
standard cup of coffee.
Cost-Plus Pricing (Mark-up Pricing): This involves calculating the total cost of producing a cup of
coffee (beans, water, cup, labor, overhead, etc.) and adding a fixed profit margin. This ensures
profitability on each item and is suitable for high-volume sales environments like convenience stores,
cafes, or ready-to-drink options.
Economy Pricing: The goal here is to set prices as low as possible while still making a small profit on
each item, relying on high sales volume to generate overall profit. This is common for mass-market,
basic coffee products in grocery stores or large chains positioning themselves as affordable alternatives.
Bundle Pricing: Combining coffee with other items (e.g., coffee and a pastry for a set price) is
effective for increasing the average transaction value. Customers often perceive this as getting a good
deal, which can boost sales of higher-margin items within the bundle.
Psychological Pricing: This strategy uses pricing tactics to influence purchasing decisions, such as
pricing coffee at 49 pesos instead of 50 pesos to make it seem less expensive. This subtle approach can
be effective for influencing impulse buys typical of convenience purchases.
Dynamic Pricing: In some settings, like an urban cafe with distinct peak hours, prices might be
adjusted based on real-time demand to maximize profits during busy times.

COFFEE AS A SHOPPING GOOD

While coffee is generally classified as a convenience product, it can be considered a shopping good due
to certain market trends and consumer behaviors, primarily relating to specialty coffee, the overall
experience, and product differentiation.
The "Coffee Experience": When consumers visit a coffee shop, especially a specialty one, they are
often buying more than just the beverage. They are seeking an experience, a "third place" (neither
home nor work) for socializing, working, or relaxing. The atmosphere, service quality, barista
expertise, and social aspects become significant factors in the purchase decision, involving more
comparison and consideration than a simple convenience purchase.
High-End Home Brewing Equipment: The increasing popularity of high-end, automatic coffee
machines for home use has led consumers to invest time and effort in selecting the right equipment and
the specific whole beans that pair well with them. This process of evaluating features, quality, and price
aligns with the definition of a shopping good purchase.
Customization and Personalization: Younger generations, in particular, are driven by customization
and aesthetic appeal (e.g., specific iced options suitable for social media). The ability to choose specific
roasts, flavors, and presentations can turn the coffee purchase into a more involved, deliberative
shopping experience.
In these contexts, the consumer's purchasing process involves significant effort, comparison, and
evaluation of attributes beyond mere availability and low price, thus elevating coffee to the status of a
shopping good.
Michael John V. Dayondon
Christopher A. Munar
Jeston D. Barrientos
Marketing Strategies
Marketing strategies for coffee as a shopping good focus on building brand identity, enhancing
customer experience, and using both online and offline channels to drive loyalty and sales. Key tactics
include creating a strong brand through unique identity and atmosphere, using social media for
engagement, and offering a high-quality product with exceptional service.
Develop a strong brand identity: Define what makes your coffee shop unique, whether it's a specific
ambiance, sustainable practices, or a unique menu.
Prioritize quality and service: Consistently provide high-quality products and exceptional customer
service to encourage repeat business and positive word-of-mouth referrals.
Offer personalized marketing: Create a bucket of bible verses to attract positive energy and attract
more customers.
Engage on social media: Post visually appealing photos of products, share behind-the-scenes content,
and interact directly with customers.
Host events and workshops: Organize events like open mic nights, workshops, or tasting events to
attract new customers and build community.
Pricing Strategies
Pricing strategies for coffee as a shopping good include value-based pricing (based on perceived
quality), competitive pricing (based on what competitors charge), and promotional pricing (like
discounts and bundles).
Common pricing strategies for coffee
Value-based pricing: Prices are set based on what customers perceive the coffee to be worth,
considering factors like quality, experience, and uniqueness.
Competitive pricing: Prices are based on what competitors in the market are charging for similar
products.
Promotional pricing: This involves temporarily lowering prices to attract customers, such as with
limited-time deals, discounts, or introductory offers.
Bundle pricing: Multiple items are combined and sold together at a single, often discounted, price,
such as a coffee and pastry deal.
Dynamic pricing: Prices fluctuate in response to real-time factors like demand, seasonality, or even the
time of day. For example, prices might be slightly higher during peak hours.
Tiered pricing: This strategy uses different price points to encourage customer loyalty. It often
involves a rewards program where loyal customers receive discounts or special offers at certain tiers.
Cost-plus pricing: Prices are calculated by adding a markup percentage to the cost of the coffee and
other expenses.
Price skimming: A high initial price is set for a new or premium product, which is then gradually
lowered as the market changes and more competitors enter.

COFFEE AS A SPECIALTY GOOD

Coffee is a specialty good due to a comprehensive approach that prioritizes exceptional quality,
meticulous production at every stage of the supply chain, traceability, and ethical practices. Unlike
Michael John V. Dayondon
Christopher A. Munar
Jeston D. Barrientos
commercial coffee, which is a mass-produced commodity, specialty coffee is treated as an artisanal
product with unique, distinctive attributes.
Key Factors that Define Specialty Coffee
Quality Grading: The primary defining factor is quality, as graded by certified coffee tasters (Q
Graders) using a 100-point scale developed by the Specialty Coffee Association (SCA). To be classified
as specialty grade, coffee must score 80 points or higher.
Meticulous Cultivation and Harvesting: Specialty coffee is typically grown in ideal microclimates
and at high altitudes, often on small, dedicated farms. Farmers practice selective harvesting, hand-
picking only the perfectly ripe coffee cherries, which requires significantly more care and labor than
the machine-harvesting used for commodity coffee.
Careful Processing and Roasting: After harvesting, the beans undergo careful processing (e.g.,
washed, natural, honey methods) to preserve and enhance their unique flavor potential. Roasters then
roast the beans in small batches, often using lighter roast profiles to highlight the coffee's inherent
flavors and origin-specific tasting notes (like fruit, floral, or chocolate notes), rather than a generic dark
roast to mask defects.
Traceability and Transparency: A key characteristic of specialty coffee is its traceability to a specific
origin, farm, or even a particular lot. This transparency allows consumers to know exactly where their
coffee comes from and the story behind it, fostering a connection between the producer and the
consumer.
Ethical Sourcing: The specialty coffee industry often employs direct trade or relationship-based
models, which ensure farmers receive a fair price for their high-quality crop, often above the
fluctuating commodity market price. This focus on social and environmental sustainability contributes
to the "specialty" designation.
Consumer Experience and Appreciation: The "third wave" coffee movement has transformed coffee
consumption from a mere caffeine fix into an appreciation of craftsmanship and a unique tasting
experience. This is driven by knowledgeable baristas, innovative brewing methods (e.g., pour-over,
Aeropress), and a consumer base increasingly interested in quality, sustainability, and unique flavors.
Marketing Strategies
Marketing a specialty coffee involves building a strong brand identity through storytelling and high-
quality product presentation, creating a welcoming and unique atmosphere, and implementing digital
and local strategies.
Focus on product quality: Emphasize the high quality of your specialty coffees and educate customers
about the origin, flavor profiles, and brewing methods.
Create an inviting atmosphere: Design a comfortable and welcoming physical space that encourages
customers to relax, socialize, or work.
Leverage user-generated content: Encourage customers to share photos and tag your business by
creating hashtags, running contests, and reposting their content.
Incentivize word-of-mouth: Implement referral programs that reward both the existing customer and
new ones they bring in.
There is a lot the specialty coffee industry owes to Starbucks. In fact, the specialty industry wouldn’t
exist as we currently know it if it weren’t for Starbucks and their deep and wide penetration into
Western markets (and soon, Eastern markets as well). In the West, they brought espresso-based drinks
to the masses and helped bring the coffee conversation to quality, single origin, etc. They’ve helped
Michael John V. Dayondon
Christopher A. Munar
Jeston D. Barrientos
bring better home-brewing methods to the fore, moving more people from their old drip coffee maker
to more precise and intimate pour-over methods.
I personally owe my coffee carreer to Starbucks and the recent trip to Shanghai and visiting the Reserve
Roastery there reminded me of a lot of the good things Starbucks can continue doing for the specialty
industry.
-Michael C. Wright
By focusing on these attributes throughout the entire supply chain, coffee elevates itself from an
interchangeable commodity to a distinct and valuable specialty good.
Pricing Strategies
As a specialty good, coffee pricing strategies focus heavily on value-based and premium pricing,
leveraging the high quality, unique sourcing, and overall customer experience to justify higher prices
compared to commercial coffee.
Key pricing strategies for specialty coffee include:
Value-Based Pricing: This is considered one of the most effective strategies for specialty coffee. Prices
are set based on the customer's perceived value of the product, which is influenced by factors like the
unique flavor profile, single-origin designation, ethical/sustainable sourcing, brand story, and the cafe's
atmosphere and service.
Premium Pricing: Specialty coffee is inherently a premium product (scoring 80+ points on the
Specialty Coffee Association scale). A premium pricing strategy positions the brand as high-end and
exclusive, targeting customers who value quality and are willing to pay more for it. This helps maintain
high profit margins.
Tiered or Product Line Pricing: Businesses often use a multi-tier pricing structure. For example:
Foundation Tier: Standard, everyday blends priced at the market average.
Core Tier: Signature products with unique selling points, priced at a premium.
Discovery Tier: Limited editions, rare origins, or experimental process coffees that command
significantly higher prices.
Dynamic and Geographic Pricing: Prices may be adjusted based on location, demand, and local
market conditions. Stores in prime urban locations can often charge more due to higher operational
costs (e.g., rent) and customer demographics.
Ultimately, successful specialty coffee pricing balances operational costs, competitor analysis, and,
most importantly, the customer's perception of the unique value and experience being offered.

COFFEE AS AN UNSOUGHT GOODS

Coffee is overwhelmingly considered a convenience product, which consumers purchase regularly with
minimal effort, and not an unsought good. It would only be an unsought good in a highly specific or
hypothetical scenario where a potential consumer is unaware of its existence, benefits, or need until a
particular situation arises.
In standard marketing terms, unsought goods are products the buyer does not actively seek out or
consider under normal circumstances, such as life insurance, funeral services, or emergency medical
services.
In unusual contexts, coffee could be considered unsought:
Michael John V. Dayondon
Christopher A. Munar
Jeston D. Barrientos
Unawareness of Need or Existence: For someone who is completely unaware of coffee's existence or
its use (a rare case in the modern world), it would be an unsought product until they learn about it.
A Brand New Product Category: If a company introduced an entirely new, innovative type of coffee
product that had no precedent, consumers wouldn't actively seek it out because they wouldn't know it
exists. Aggressive marketing would then be needed to create awareness and demand, typical of a newly
introduced unsought product.
A "Necessity" in an Emergency: In a survival or emergency scenario where a person desperately
needs a stimulant to stay awake for a critical task (e.g., driving an ambulance a long distance), coffee
could be considered an "unsought" necessity they hadn't planned to need in such an urgent context.
Cultural Context: In a specific culture where coffee consumption is rare or non-existent, local
consumers would not seek it out until a need is created through marketing or exposure.
Generally, these scenarios are exceptions. In the vast majority of markets, coffee is a widely known,
routinely purchased consumer staple.
Marketing Strategies
Education-Based Marketing: Since consumers may not understand the product, the primary goal is to
inform them.
Content is King: Create blog posts, videos, or guides that explain the coffee's unique value
proposition, such as specific health benefits (e.g., high-altitude roasting for better flavor, a unique
processing method, or fair-trade sourcing) or innovative uses.
Expert Endorsements: Collaborate with coffee experts, nutritionists, or trusted community figures to
lend credibility and authority to your message.
Aggressive and Persistent Promotion: As consumers aren't actively looking for the product, it must
be consistently put in front of them.
Customer Testimonials & Reviews: Encourage and display positive reviews and real-life stories from
satisfied customers. Peer validation is often more powerful than advertising copy.
Pricing Strategy
Products are classified as unsought only if consumers are unaware of them, or know about them but do
not normally think of buying them (like life insurance or funeral services).
If a specific type of coffee were treated as an "unsought good" (e.g., a brand-new, highly innovative
coffee product with unknown benefits), pricing strategies would focus on recovering initial costs and
emphasizing value through extensive promotion, as price is not the primary initial driver for purchase.
Pricing Strategies for Coffee as an Unsought Good
Given the need to make consumers aware of the product's existence and value, the following pricing
strategies, combined with intensive promotion and personal selling, would be applicable:
Cost-Plus Pricing: Since the market is uncertain and the main goal is to introduce the product, a
simple cost-plus approach ensures all production and marketing expenses are covered, with a standard
profit margin added.
Value-Based Pricing (based on perceived benefits): The price should reflect the unique, emphasized
benefits of this "unsought" coffee (e.g., specific, unique health benefits that the target audience values
but is unaware of). The price is justified by the perceived value, which must be clearly communicated
through marketing efforts.
Michael John V. Dayondon
Christopher A. Munar
Jeston D. Barrientos
Premium Pricing (if unique): If the "unsought" coffee has a genuinely unique characteristic that no
competitor offers (e.g., an exclusive, innovative health property), a high price can be set to establish an
image of superior quality and exclusivity. This strategy works best with no direct competition initially.
Penetration Pricing (to build initial awareness): A low initial price could be used to encourage trial
and quickly build market share and awareness. Once a customer base is established and the benefits are
understood, prices could be gradually increased.
Bundle Pricing: The unsought coffee could be bundled with other, sought-after products (e.g., a coffee
machine or a popular snack) to entice consumers to try the unknown item.
Examples
Cascara (also known as sultana in Bolivia and qishr in Yemen) is a beverage made from a coffee
cherry’s dry skin. Drinkers steep the cherries like tea in hot or cold water. Farmers served it every
morning and on special occasions Like the beans, the taste depends on the variety.
Selosoda .It’s similar to cascara, yet it tastes quite different. It naturally tastes like sweet honey and
orange taste and drinkers often add organic lemon and orange juices to enhance the flavor. The added
sparkle promises a refreshing drinking experience and it also goes well with some types of alcohol (I
recommend gin). This coffee by-product is sourced from the coffee farm Las Lajones in Panama,
ŝelosoda is brewed in southern Germany.
Yes, you read that right – coffee flour! Can you imagine delicious homemade cookies or brownies,
with a hint of “floral, citrus, and roasted fruit-type notes” mixing with that chocolatey goodness? This
is what CF Global Holdings, a company founded by former Starbucks employee Dan Belliveau, is
currently working on. Coffee flour is made from the leftover coffee cherry, but it’s eco-friendly nature
isn’t the only amazing thing about it. This gluten-free option is supposed to have five times the fibre
whole grain wheat flour contains, as well as three times more iron than fresh spinach. Pretty good,
right?
Fertilizer. Not only does caffeine wake you up in the morning, it can have the same effect on your
plants. If, like me, you enthusiastically buy new plants only to witness their rapid demise, coffee could
come to your (and your plants’) rescue. Used coffee grounds still contain nutrients beneficial for the
soil, if applied in reasonable quantities. You can either ask your local coffee shop for their spent coffee
pucks or use the coffee grounds left over after your morning brew. Simply work them into the soil
around the plants, and the grounds will add organic material that improves the quality of the soil.
Another use for coffee grounds around the garden is as compost. If you turn it around regularly, it will
add nitrogen to your pile and compost in about three weeks.
Coffee grounds are not only useful helpers for your plants – they also help you out around the house.
An air freshener. Every once in a while, you’ll open your fridge and (depending on what you’re
storing in there) be greeted by some unpleasant smells. So, here’s a smart trick: always keep a bowl of
fresh, unused coffee grounds in there. It will absorb any smells, usually overnight. The same method
can be applied to smelly kitchen cupboards, or if you want to eliminate the smell of smoke in a room.
Or you could use it like soap when your hands smell of garlic. Or if your car smells bad. You get the
gist. There really are so many creative uses for coffee by-products and used coffee grounds, and
research is showing there may be more to come. Recent studies have investigated how the substances
contained in the coffee cherry can be used in animal feed, fuel, agriculture, and even beauty products.
CONCLUSION
In conclusion, coffee is a remarkably multifunctional substance, valued both as a globally consumed
beverage and an industrial resource. Its utility spans numerous domains, primarily driven by its rich
content of bioactive compounds like caffeine and antioxidants, which offer a wide array of benefits and
applications.
Michael John V. Dayondon
Christopher A. Munar
Jeston D. Barrientos