Mky Issue 2

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Information about Mky Issue 2

Published on March 2, 2009

Author: yeswd1

Source: slideshare.net

The Story of Cafédirect Social Enterprise Marketing

Agenda Introduction Social Enterprise Fair Trade Cafédirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights

Agenda Introduction Social Enterprise Fair Trade Cafédirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights

S ocial Enterprise Social enterprises are social mission driven organizations which trade in goods or services for a social purpose. Triple bottom line: people, planet and profit social, environmental, financial not-for-profit -- more than profit

S ocial Enterprise

F air Trade Fair trade is a trade partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. contributes to sustainable development by offering better trading conditions to, and securing the rights of, disadvantaged producers and workers - especially in the South. Its organizations are actively engaged in supporting producers in awareness raising and in campaigning for changes in the rules and practices of conventional international trade

F air Trade Global Fair trade Sales 2007 $2,381,000,000 2006 $1,623,000,000 2005 $1,141,570,191 2004 $831,523,066 2003 $554,766,710 2002 $300,000,000 2001 $248,000,000

C afedirect 1989 Collapse of the International Coffee Agreement 1991 Cafédirect was born 2004 Cafédirect become a publicly listed company 2007 Cafédirect was voted as the most recommended brand in the nation in a survey of 2,000 companies

1989

Collapse of the International Coffee Agreement

1991

Cafédirect was born

2004

Cafédirect become a publicly listed company

2007

Cafédirect was voted as the most recommended brand in the nation in a survey of 2,000 companies

C afedirect 39 grower organizations across 13 developing countries 260, 000 farmers and directly improving the lives of more than 1.4 million people Invested more than £3.3 million of profits directly into communities of growers, and paid more than £13 million over and above market prices for the raw material Today

39 grower organizations across 13 developing countries

260, 000 farmers and directly improving the lives of more than 1.4 million people

Invested more than £3.3 million of profits directly into communities of growers, and paid more than £13 million over and above market prices for the raw material

C afedirect

C afedirect

C afedirect 1993 -1995

C afedirect 1996 -1998

C afedirect 1999-2001

Agenda Introduction Social Enterprise Fair Trade Cafédirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights

Corporate Reputation Quotient Theory 1 Six drivers of the corporate reputation quotient

Six drivers of the corporate reputation quotient

Corporate Reputation Quotient Products and Services To guarantee high quality Cafédirect controlled the produce delivered it also invested heavily in training producers on the ground Key achievements in 2000 demonstrated Cafédirect’s success in attaining high quality “ Best coffee” by Best magazine Awarded 5 stars by Prima magazine Voted “ favorite coffee” by the UK’s leading consumer magazine Fair trade – Direct trade By providing long-term contracts and producer education, direct trade allows importers to obtain high quality coffee – year in and year out While most large coffee importers buy coffee beans on the spot market, direct trade has a built-in supply chain for reliable high-quality gourmet coffee. Theory 1

Products and Services

To guarantee high quality

Cafédirect controlled the produce delivered

it also invested heavily in training producers on the ground

Key achievements in 2000 demonstrated Cafédirect’s success in attaining high quality

“ Best coffee” by Best magazine

Awarded 5 stars by Prima magazine

Voted “ favorite coffee” by the UK’s leading consumer magazine

Fair trade – Direct trade

By providing long-term contracts and producer education, direct trade allows importers to obtain high quality coffee – year in and year out While most large coffee importers buy coffee beans on the spot market, direct trade has a built-in supply chain for reliable high-quality gourmet coffee.

Corporate Reputation Quotient Vision and leadership Ian Lepper: Cafédirect’s first CEO. After he left, Cafédirect went through some turbulent stages: The partnership between the four founding ATOs was being stretched. Overall sales in 1998 increased by only 8%. The underlying direction of the charity spin-off was unclear. (the interests of business partners, producer groups, grassroots supporters and founders diverged) Penny Newman: She was a milestone MD of Cafédirect. Bring Cafédirect from charity spin-off to ethical business venture New vision: reposition Cafédirect as a high quality coffee brand Anne MacCaig: Cafédirect’s new Chief Executive She has a wealth of business and marketing experience She has an economics degree from the University of Birmingham. In the past 20 years she has worked with major brands here in the UK and abroad, including Persil and Rolls-Royce plc. Most recently, as Ribena’s Marketing Director, Anne led the brand’s strategic turnaround Theory 1

Vision and leadership

Ian Lepper: Cafédirect’s first CEO.

After he left, Cafédirect went through some turbulent stages:

The partnership between the four founding ATOs was being stretched.

Overall sales in 1998 increased by only 8%.

The underlying direction of the charity spin-off was unclear. (the interests of business partners, producer groups, grassroots supporters and founders diverged)

Penny Newman:

She was a milestone MD of Cafédirect.

Bring Cafédirect from charity spin-off to ethical business venture

New vision: reposition Cafédirect as a high quality coffee brand

Anne MacCaig: Cafédirect’s new Chief Executive

She has a wealth of business and marketing experience

She has an economics degree from the University of Birmingham.

In the past 20 years she has worked with major brands here in the UK and abroad, including Persil and Rolls-Royce plc.

Most recently, as Ribena’s Marketing Director, Anne led the brand’s strategic turnaround

Corporate Reputation Quotient Workplace environment: For Cafédirect, employees are their producers (small-holders in the third world) Several benefits are provided to its producers A minimum price, which will always be paid even if the world market price falls below this point. A price premium of a given percentage, which is paid when the world market price rises beyond the minimum price. Pre-financing of 60% of the total order to allow small-holders to buy raw materials. Training in quality control and marketing know-how to build the capacity to also trade on the world market independently of fair trade. Theory 1

Workplace environment:

For Cafédirect, employees are their producers (small-holders in the third world)

Several benefits are provided to its producers

A minimum price, which will always be paid even if the world market price falls below this point.

A price premium of a given percentage, which is paid when the world market price rises beyond the minimum price.

Pre-financing of 60% of the total order to allow small-holders to buy raw materials.

Training in quality control and marketing know-how to build the capacity to also trade on the world market independently of fair trade.

Corporate Reputation Quotient Social responsibility: Cafédirect’s mission statement: At Cafédirect our mission is to change lives and build communities through inspirational, sustainable business. We focus our social and economic impact in the developing world. Theory 1

Social responsibility:

Cafédirect’s mission statement:

At Cafédirect our mission is to change lives and build communities through inspirational, sustainable business. We focus our social and economic impact in the developing world.

Kano Model Theory 2

Kano Model 3 categories of quality attributes influence customer satisfaction: Basic Factors Dissatisfier - Must be’s – Cost of Entry Excitement Factors Delighter – Latent Need – Differentiator Performance Factors Satisfier – More is better – Competitive Theory 2

3 categories of quality attributes influence customer satisfaction:

Basic Factors

Dissatisfier - Must be’s – Cost of Entry

Excitement Factors

Delighter – Latent Need – Differentiator

Performance Factors

Satisfier – More is better – Competitive

Kano Model Theory 2 Kano Model applied to Food&Beverage industry Factors KANO Category How to do better Sanitation & Safety Basic Needs Keep and have to satisfy customers above the average level Quality Basic Needs Taste Performance Sustaining improve on to gain more return Package Performance Distribution Performance Sales Promotion Surprise Dig and focus on Brand Surprise

Kano Model Theory 2 Quality - Clients were usually concerned citizens for whom the charity aspect of fair trade prevailed over product quality. - Penny Newman-reposition Cafédirect as a high quality coffee brand - Direct Trade(long-term contracts and producer education built-in supply chain for reliable high-quality gourmet coffee) Sanitation & Safety - Government report - Product Recall of Cafédirect product (found small pieces of glass) - Hazard Analysis Critical Control Point, or HACCP, is a standard of food safety management system for any food producer wanting to sell into the UK and other European markets. Now it is for all parts of the supply chain Basic factors

Kano Model Theory 2 Performance factors Distribution - Target the mainstream distribution channels such as supermarkets, catering, and coffee bars Taste - "Some batches tasted very good and others tasted very poor. That generated a lot of negative reaction in the UK to Cafédirect in the first years." (Hudghton, 2002, interview) - Cafédirect's Gold Standard Programme - Train growers to professionally taste their own products, helping them to improve quality and understand market value

Kano Model Theory 2 Performance factors Package - Cafédirect undertook a major brand relaunch in 2006 to help unify the brand look and aid it competitiveness

Kano Model Theory 2 Excitement factors Brand - 8 Awards in 2008 - August 2008: Cafédirect triumphs in Great Taste Awards - In a survey of 2,000 global brands Cafédirect ranks No. 1 as the most recommended brand Social Enterprise concept - Combining taste, price, ethics, and availability - 良心消費主義 (ethical consumerism)

Product/Market Grid Theory 3 Ansoff Matrix

Product/Market Grid Theory 3 Source: Cafédirect annual report 2006-2007

Product/Market Grid Theory 3 Ansoff Matrix

Product/Market Grid Theory 3 Cafédirect use 3 major approach Encourage current customers to buy more Attract competitor’s customers Convince non-users to use the product

Encourage current customers to buy more

Attract competitor’s customers

Convince non-users to use the product

Product/Market Grid Theory 3 Tesco increased its Cafédirect offering by another five products in 2006 Morrison’s expanded Cafédirect range, adding Medium Blend, Organic Decafeninated, Machu Picchu and Palenque Roast etc in 2006 At the beginning of 2007, Co-op increased the number of their stores selling Cafédiret’s products. They have agreed a strategy to encourage customers to buy more Cafédirect products this year. (annual report 2007 p.21) Keep high quality products Emotional approach

Tesco increased its Cafédirect offering by another five products in 2006

Morrison’s expanded Cafédirect range, adding Medium Blend, Organic Decafeninated, Machu Picchu and Palenque Roast etc in 2006

At the beginning of 2007, Co-op increased the number of their stores selling Cafédiret’s products. They have agreed a strategy to encourage customers to buy more Cafédirect products this year. (annual report 2007 p.21)

Keep high quality products

Emotional approach

Product/Market Grid Theory 3 When the current product is launched in a new market, there are three approaches to develop the market: 1. Expand distribution channels. 2. Sell in new locations. 3. Identify the potential users.

Product/Market Grid Theory 3 Annual report 2005-06 Cafédirect introduce existing products in foreign market Hong Kong Listing with a major supermarket chain “Parknshop” 50 stores Ireland Now available in all their major supermarket and many independent stores Sales increased by 19% in 2005 Paris

Cafédirect introduce existing products in foreign market

Hong Kong

Listing with a major supermarket chain “Parknshop” 50 stores

Ireland

Now available in all their major supermarket and many independent stores

Sales increased by 19% in 2005

Paris

Product/Market Grid Theory 3 Annual report 2005-07

Product/Market Grid Theory 3 Originally, coffee, later, hot chocolate When a new product is launched in the current market, the intensive growth strategies could be to: 1. Develop new features. 2. Develop different quality levels. 3. Improve the technology.

Product/Market Grid Theory 3 Annual report 2005-06

Agenda Introduction Social Enterprise Fair Trade Cafédirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights

Nike vs. child labor in the 90s Corporate Reputation Quotient application

  People criticizes: “ Nike’s success story is not based on good name and advertising alone but also attached to it is the tears of tortured workers and child labor.” “ Nike has the habit of hiding behind its good public image and its effective means of promotions and advertising. “ Consumers - " Just don't do it ." Corporate Reputation Quotient application

  People criticizes:

“ Nike’s success story is not based on good name and advertising alone but also attached to it is the tears of tortured workers and child labor.”

“ Nike has the habit of hiding behind its good public image and its effective means of promotions and advertising. “

Consumers - " Just don't do it ."

Nike’s solution Code of Conduct,1992 Minimum age for employment, 1998 Footwear(18), others(16) Apply Occupational Safety and Health Administration (OSHA) standard Nike set up a Corporate Responsibility and Compliance Department, 2000 Join the Global Alliance for workers and communities and Fair Labour Association Corporate Reputation Quotient application

Nike’s solution

Code of Conduct,1992

Minimum age for employment, 1998

Footwear(18), others(16)

Apply Occupational Safety and Health Administration (OSHA) standard

Nike set up a Corporate Responsibility and Compliance Department, 2000

Join the Global Alliance for workers and communities and Fair Labour Association

Nike’s Current Code of Conduct Prohibition of forced labor Prohibition of child labor Compensation:pay at least the minimum total compensation required by local law Benefits :comply with all provisions for legally mandated benefits Ensure overtime payment Ensure a health and safety working environment Environment: continuous improvement in processes and programs to reduce the impact on the environment Maintain on file and documentation to demonstrate compliance with this Code of Conduct, and to make these documents available for auditor's inspection upon request Corporate Reputation Quotient application

Nike’s Current Code of Conduct

Prohibition of forced labor

Prohibition of child labor

Compensation:pay at least the minimum total compensation required by local law

Benefits :comply with all provisions for legally mandated benefits

Ensure overtime payment

Ensure a health and safety working environment

Environment: continuous improvement in processes and programs to reduce the impact on the environment

Maintain on file and documentation to demonstrate compliance with this Code of Conduct, and to make these documents available for auditor's inspection upon request

Kano Model application

Active Links Legibility Safety Kano Model application

Active Links

Legibility

Safety

Storage Upload speed Tag & Search Kano Model application

Storage

Upload speed

Tag & Search

Photo Editing Community Fun Kano Model application

Photo Editing

Community

Fun

Photo Editing “ Wow, my photos are sharpened automatically”

Photo Editing “ Wow, I can add my own Text and Stickers”

Community “ Wow, I can find something interesting about Hong Kong”

Community “ Wow, this guy is quite popular here”

Fun “ Wow, the way of browsing is cool”

Fun “ Wow, I can explore the world”

Fun “ Wow, they have widgets can be embedded into other sites”

Product/Market Grid application Aggressively expanding the number of stores in Japan Strengthening the group’s core brands and maintaining flexibility with regard to distribution channels and retailing formats

Aggressively expanding the number of stores in Japan

Strengthening the group’s core brands and maintaining flexibility with regard to distribution channels and retailing formats

Product/Market Grid application The result was a 2.2% increase in net sales to 136,312 million yen

Product/Market Grid application Business Expansion in the Asian and American Markets Overseas sales increased 17% year on year 2007 due to the business expansion on China, Taiwan and South Korea.

Business Expansion in the Asian and American Markets

Overseas sales increased 17% year on year 2007 due to the business expansion on China, Taiwan and South Korea.

Product/Market Grid application 2005, JILL STUART 2006, Perfume containing natural fragrances Skin care series featuring natural fruit extracts

2005, JILL STUART

2006, Perfume containing natural fragrances

Skin care series featuring natural fruit extracts

Agenda Introduction Social Enterprise Fair Trade Cafédirect Theories Corporate-Reputation Quotient Kano Model Product/Market Grid Case Application Learning Insights

Learning Insights From Cafédirect’s case, we learn that 1. SE should keep long-term relationships with small-holders and set high standard of quality 2. SE should market itself just like commercial organizations 3. Guarantee basic factors, improve performance factors and make “Social Enterprise” identity as the excitement factor 4. Expand to mass market by increasing distribution channels “ New Fair Trade” ATOs Style Business Idealistic Skills Sales, Marketing Intellectual Strategy Make money to help Advocacy Values Commercial but ethical Non-commercial Staff Professional Semi-volunteers System Dependable More ad-hoc Structure Performance-based, clear responsibilities Democratic, Political

Learning Insights

Learning Insight -- Student residence canteen in Cityu In previous years, it was owned and manipulated by Women cooperation ( 妇女合作社) Women cooperation is a sub-organization of Hong Kong Work Association for Women ( 香港妇女劳工协会), which is a registered non-profit organization. The organization aims at concerning women’s working problem and providing them with working opportunities. However, at that time, the situation in the residence canteen was: The food was not delicious at all. The food quality was quite bad. The attitude of the staff towards residence students was annoying. Residences complained a lot about the residence canteen.

In previous years, it was owned and manipulated by Women cooperation ( 妇女合作社)

Women cooperation is a sub-organization of Hong Kong Work Association for Women ( 香港妇女劳工协会), which is a registered non-profit organization. The organization aims at concerning women’s working problem and providing them with working opportunities.

However, at that time, the situation in the residence canteen was:

The food was not delicious at all.

The food quality was quite bad.

The attitude of the staff towards residence students was annoying.

Residences complained a lot about the residence canteen.

Learning Insight -- Student residence canteen in Cityu SRO realized this problem, and change the owner from 妇女合作社 to Homey Kitchen. It is just like the residence canteen move from pure non-profit organization to more customer-focus. This change was proved quite successful. Mission of Homey Kitchen: To provide residents with healthy and delicious food as well as comfortable service. Homey Kitchen provides food and drinks with good quality, and staff attitude is very nice. Homey Kitchen does quite a number of promotions, here are two examples: EXPRESS Lunch Box: Only $12 can buy you a single entrée and pre-packed lunch box! FREE Drink: Come for a free soothing drink after 9pm (while suppliers last) from 28 April to 18 May 2008!

SRO realized this problem, and change the owner from 妇女合作社 to Homey Kitchen.

It is just like the residence canteen move from pure non-profit organization to more customer-focus.

This change was proved quite successful.

Mission of Homey Kitchen:

To provide residents with healthy and delicious food as well as comfortable service.

Homey Kitchen provides food and drinks with good quality, and staff attitude is very nice.

Homey Kitchen does quite a number of promotions, here are two examples:

EXPRESS Lunch Box: Only $12 can buy you a single entrée and pre-packed lunch box!

FREE Drink: Come for a free soothing drink after 9pm (while suppliers last) from 28 April to 18 May 2008!

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