Harvard Case - Brewing Peace Philippines: Customer Relationship Management
"Brewing Peace Philippines: Customer Relationship Management" Harvard business case study is written by Jose Gerardo Santamaria, Sandeep Puri, Maria Luisa Chua Delayco, Rakesh Singh. It deals with the challenges in the field of Marketing. The case study is 9 page(s) long and it was first published on : Jun 26, 2020
At Fern Fort University, we recommend Brewing Peace Philippines implement a comprehensive CRM strategy focused on building strong customer relationships, fostering brand loyalty, and driving sustainable growth. This strategy should leverage digital marketing, data analytics, and customer-centric initiatives to enhance customer experience, streamline operations, and establish a competitive advantage in the Philippine market.
2. Background
Brewing Peace Philippines, a social enterprise founded by a group of Filipino entrepreneurs, aims to empower marginalized communities through coffee production and fair trade practices. The company faces challenges in reaching a wider audience, building brand awareness, and establishing a sustainable business model.
The case study highlights the company's commitment to social responsibility and its desire to expand its reach beyond local markets. The main protagonists are the founders, who are passionate about their mission but lack the resources and expertise to implement a robust CRM strategy.
3. Analysis of the Case Study
To analyze the case, we will use a combination of frameworks:
SWOT Analysis:
- Strengths: Strong social mission, high-quality coffee, commitment to fair trade, passionate founders.
- Weaknesses: Limited resources, lack of marketing expertise, small customer base, underdeveloped brand awareness.
- Opportunities: Growing demand for ethically sourced coffee, expanding online market, potential for international partnerships, increasing awareness of social enterprises.
- Threats: Intense competition from established coffee brands, fluctuating coffee prices, economic instability in the Philippines.
PESTEL Analysis:
- Political: Stable political environment but potential for policy changes affecting social enterprises.
- Economic: Growing middle class in the Philippines, increasing disposable income, but economic uncertainty.
- Social: Rising awareness of social responsibility, increasing demand for sustainable products.
- Technological: Advancements in digital marketing and e-commerce platforms.
- Environmental: Growing concern for environmental sustainability, potential for eco-friendly packaging.
- Legal: Regulations regarding fair trade practices and social enterprises.
Customer Behavior Analysis:
- Target Audience: Coffee enthusiasts, socially conscious consumers, individuals seeking premium quality products.
- Motivations: Ethical sourcing, fair trade practices, high-quality coffee, supporting social enterprises.
- Purchasing Behavior: Online purchases, in-store purchases, subscription services.
Competitive Analysis:
- Direct Competitors: Local coffee roasters, fair trade coffee brands.
- Indirect Competitors: Large coffee chains, generic coffee brands.
- Competitive Advantages: Unique social mission, high-quality coffee, direct relationship with farmers.
4. Recommendations
1. Develop a comprehensive CRM strategy:
- Segment and target customers: Identify key customer segments based on demographics, psychographics, and purchasing behavior. Develop targeted marketing campaigns for each segment.
- Build a strong brand identity: Emphasize the social mission, commitment to fair trade, and high-quality coffee. Create a compelling brand story and communicate it effectively through all marketing channels.
- Leverage digital marketing: Utilize social media platforms, content marketing, search engine optimization (SEO), and email marketing to reach a wider audience.
- Build an online presence: Develop a user-friendly website with an online store, blog, and social media integration.
- Implement CRM software: Utilize CRM software to track customer interactions, manage customer data, and personalize communication.
- Offer loyalty programs and rewards: Encourage repeat purchases and build customer loyalty through loyalty programs and exclusive offers.
- Provide exceptional customer service: Respond promptly to inquiries, resolve issues efficiently, and create a positive customer experience.
2. Enhance product development and distribution:
- Expand product offerings: Introduce new coffee blends, single-origin coffees, and coffee-related products like mugs and accessories.
- Develop innovative packaging: Explore eco-friendly packaging options and incorporate unique designs that reflect the brand identity.
- Optimize distribution channels: Expand online sales through e-commerce platforms and partner with local retailers and cafes.
- Explore international markets: Research potential markets for expansion and develop strategies for entering new markets.
3. Foster strategic partnerships:
- Collaborate with NGOs and social enterprises: Partner with organizations that share similar values and target audiences.
- Engage with influencers and bloggers: Partner with influencers and bloggers to promote the brand and reach a wider audience.
- Participate in industry events and conferences: Attend industry events and conferences to network with potential partners and customers.
4. Implement data-driven marketing:
- Track key metrics: Monitor website traffic, social media engagement, customer acquisition costs, and customer lifetime value.
- Analyze customer data: Utilize data analytics to understand customer behavior, preferences, and needs.
- Optimize marketing campaigns: Use data insights to refine marketing campaigns, improve targeting, and increase ROI.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of Brewing Peace Philippines' strengths, weaknesses, opportunities, and threats. They are aligned with the company's mission to empower marginalized communities and its desire to expand its reach and build a sustainable business model.
1. Core competencies and consistency with mission: The recommendations focus on leveraging the company's commitment to social responsibility and high-quality coffee to build a strong brand and attract socially conscious consumers.
2. External customers and internal clients: The recommendations consider the needs and preferences of the target audience, while also providing tools and resources to empower internal stakeholders.
3. Competitors: The recommendations aim to differentiate Brewing Peace Philippines from competitors by emphasizing its unique social mission and providing a premium customer experience.
4. Attractiveness: The recommendations are expected to drive revenue growth, increase brand awareness, and improve customer loyalty, ultimately leading to a sustainable and profitable business.
Assumptions:
- The Philippine coffee market will continue to grow.
- Consumers will be receptive to ethically sourced and fair trade coffee.
- The company will be able to secure funding for marketing and expansion initiatives.
6. Conclusion
By implementing a comprehensive CRM strategy, Brewing Peace Philippines can establish itself as a leading social enterprise in the Philippine coffee market. The company can leverage its unique social mission, high-quality coffee, and commitment to fair trade to build a loyal customer base and achieve sustainable growth.
7. Discussion
Alternatives:
- Focusing solely on local markets: This approach would limit the company's growth potential and may not be sustainable in the long term.
- Partnering with a large coffee chain: This option could provide access to a wider market but may compromise the company's social mission and brand identity.
Risks:
- Competition from established brands: The company may face challenges competing with established brands that have greater resources and market share.
- Fluctuating coffee prices: Fluctuations in coffee prices could impact the company's profitability.
- Economic instability: Economic instability in the Philippines could affect consumer spending and demand for coffee.
Key assumptions:
- The Philippine coffee market will continue to grow.
- Consumers will be receptive to ethically sourced and fair trade coffee.
- The company will be able to secure funding for marketing and expansion initiatives.
8. Next Steps
- Develop a detailed CRM strategy document: Outline the key objectives, target audience, marketing channels, and budget for the CRM strategy.
- Select and implement CRM software: Choose a CRM platform that meets the company's needs and budget.
- Develop targeted marketing campaigns: Create engaging content and campaigns for each customer segment.
- Build an online presence: Develop a user-friendly website and social media presence.
- Monitor and evaluate results: Track key metrics and adjust the CRM strategy as needed to optimize performance.
By taking these steps, Brewing Peace Philippines can effectively implement a CRM strategy that will drive growth, enhance customer relationships, and solidify its position as a leading social enterprise in the Philippine coffee market.
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Case Description
Brewing Peace was a company based in the Philippines that sold coffee beans. Despite having a base of 80 customers, 70 per cent of its business depended on 9 key accounts; this included its biggest buyer, Concepcion Coffee Enterprises Limited (CCEL), which accounted for 20 per cent of Brewing Peace's revenues. After a ₱30 million order from CCEL with a profit margin of less than 20 per cent, a payment period of 90 days, and a short delivery time, the co-founder of Brewing Peace was forced to review its relationship with its biggest client. The dilemma facing Brewing Peace was that it could not accept this order on CCEL's terms without jeopardizing the company's payment terms with its vendors and affecting the supply for orders, worth ₱25 million, to its other customers.
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