Mikel Retailing
Mikel Retailing
Mikel Retailing
1.1.
Companys background
Mikel Coffee Company is a Greek coffee company based in Larissa. The owner,
Eleftherios Kyriakakis is a very knowledgeable person in the coffee industry because of
his working experience in a cafe since 1996 and some first business steps in that field
(Our Company, 2014). At the age of 23 he already had a night club and two caf in
Thessaloniki. At 2008 and at the age of 29 he opened the first Mikel coffee store in
Larissa. The response and the positive feedback of the customers helped him to
continue the hard work and create one of the biggest chain store coffee companies in
Greece. Moreover, Mikel has a motto that comes from the acronym of the business
name is Maybe it's knowledge entering life ( success story Mikel, 2013).
1.2.
Companys size
After the success of the first store in Larisa, a few months later Mikel started
opening caf all over Greece beginning from the biggest cities such as Veroia, Kozani,
Katerini, Karditsa,Trikala, Giannena and Agrinio. At 2012 opened the first store in
Thessaloniki and in June of 2013 followed a store in Athens. After six years of operation,
Mikel has 90 stores all over Greece with most of them located in Athens and
Thessaloniki ( Mikel; 2014). Until the end of 2014, Mikel will have 100
stores in Greece with 40 of them in Athens according to the company. There are 1500
employees in all the stores covering the positions needed. Also, Mikel has two buildings,
one in Larissa and another one in Athens in order to organize the companys
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operations. It is important to mention that almost half of the stores all over Greece are
franchised stores and this is one of the reasons of the quick expansion of the company.
It is possible the opening of new franchised stores in London, Paris, Konstantinoupoli
and Dubai. The cost of the franchise is 150.000-170.000 euro for a small store 250.000280.000 euro for a medium and 350.000 euro for a big one. Mikel Company collects 5%
of the revenues from each franchised store as a franchise royalty (Mikel:
40 2014, 2014). Franchising is a contractual agreement between a
franchisor and a franchisee that allows the franchisee to operate a retail outlet using a
name and a format developed and supported by the franchisor (Levy and Weitz 2010,
p.63). In 2013, they were at the first place in Greece and in Europe in consumption of
Illy coffee with almost 170 tons. The Companys profit for this year was 2,25 million euro
and for all the stores was 24,9 million euro (. :
..., 2014),(Mikel: 40 2014, 2014).
1.3.
Product categories
Each retailer has its own product mix which is a composition of products offered to
customers in order to satisfy their needs. Furthermore, the width of the product mix is
the number of different product lines the retailer have and the depth of the product mix
is the number of different products each product line has (Hult, Pride and Ferrell 2012,
p.295). The width of Mikel stores has 5 main categories where each of them has some
subcategories. These categories are defined as sandwiches, sweets, hot drinks, cold
drinks, juices and beverages. The depth of each category is different but the sum of the
depth of all products is 124 (Our Company- delivery service, 2014)
Width
French breads
Cookies
Espresso
Espresso
Juices
Koulouri
Thessalonikis
Cakes
Cappuccino
Cappuccino
Beverages
Tost
Special
Special
Croissants
Chocolate/Tea
Chocolate/Tea
Several
coffees
Several
coffees
Fresh Milk
Special
Depth
Categories
Target market is defined as the market segments through which the retailer has to
focus its resources (Levy and Weitz 2010, p.134). Most of Mikel stores have the same
target market because, they focus on the same groups of people. Someone can find
stores in the most central places of Greece. The geographic target for every chain store
is people from the local area that want to drink or eat something. There are also stores
which are in big public streets with a lot of traffic flow that target to people that go to
their jobs. Specifically for the store of Halandri the geographic target market is this city,
which is a suburban of Athens. The demographic target of the Halandri store is
businessmen who are passing the street going to their jobs, students, police people
because of a discount they have and sales people from the shops of the area. The age
of most of the customers is between 18-35 years old and their income is characterized
as low or middle being between 6.000 and 20.000 euro per year. All the Mikel stores
address more to young people because of their new recipes of coffees and the youthful
and happy environment of the stores (Interview citation).
2.2.
Retail format
The retail format of a retailer shows the operations needed in order to satisfy the
needs of the target market. The retail format includes the merchandise, the pricing
strategy, the services offered, the promotion and the advertising which will be analyzed
later in the project (Levy and Weitz 2010, p.134). Mikel can be categorized as a good
and service retailer because, offers drinks and food to the customers but also provides
a service from within the stores. Mikel stores offer delivery service that undertakes the
order of the customer and send him whatever he chose from the catalog (Our Company,
2014). A store of Mikel that does not provide delivery service is the store of Syntagma
because, there would be too many orders that cannot be serviced properly. Another way
Mikel uses to satisfy their customers is by take-away, where people who are in a hurry
can make their order from within the store and very quickly get their order. Also, all the
stores provide service. They have tables and couches in a very friendly and modern
environment where people can relax and enjoy a coffee or a snack (Interview citation).
2.3.
Competitive advantage
Mikel have develop the same competitive advantages because they are all operating in
the same way under the franchise umbrella. The most important competitive
advantage of Mikel is the quality of the products. They use the most expensive coffee
blend in Greece to create their coffees. Quality is the most significant rule for them
(Interview citation). Another competitive advantage of Mikel is the uniqueness of the
products. They have their own recipes for the coffees, by using 32 different syrups (.
: , 2014). Also, they use only evaporated milk
to make their coffees, that is something new in the taste of the consumers because
most of the cafs use fresh milk (Interview citation). Moreover, an important competitive
advantage is the location they chose to open a store which is always in central spots of
the town. Another important element is the well trained employees. Each employee has
been trained for a specific position. Finally, Mikel Company has another competitive
advantage which is the organization structure (Interview citation).
2.4.
Location strategy
Mikel stores are located always in high traffic flow streets with good accessibility and
are visibility. This has strategic importance because, most of the customers are
businesspeople who want to get their order quick and go to their jobs. Also, even if
someone is not a frequent customer and do not know the Company, he will stop to get a
coffee because of the visibility. A significant factor for the opening of a Mikel store in
Halandri was the big growth of the local market in the recent years. This means that
more people are coming to Halandri for shopping and for work so there are more
potential customers. Moreover, it is important for Mikel stores not to have very close to
them well known competitors like Venetis. (Interview citation).
2.5.
Category management exists in retailing when a group of products are broken down
and categorized based on its similarity (Levy and Weitz 2010, p.332). Mikel has two
main groups of goods, the drinks and the foods category. In the drinks category there is
a variety of coffees, juices and beverages. Moreover, in the food category a customer
can choose a sandwich or a sweet. A part of Mikel Company is the Georgia Fresh
Flavors which creates fresh goods for all the Mikel stores. Georgia is located into Larisa.
This part of Mikel prepares fresh baked goods, like cakes and muffins. Some goods that
the stores of Athens receive from Larisa are the tea and the ice creams. Therefore,
Mikel cooperates with some suppliers for some raw materials, like coffee and for some
goods that Georgia does not provide. The most important supplier is the Kafea Emporiki
Techniki S.A. This Company supply Mikel stores with huge amounts of Illy coffee and
chocolates. The sandwiches that are created by the employees of each store use ham
and turkey only from Ifandis Company. Also, the croissants are provided from the
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Delifranche Hellas A.E. Finally, all the cups for the take-away and delivery service come
from the Cafeways Company. All the suppliers are well known into Greece for the good
quality of their goods and products. Mikel stores along with the franchise stores have to
provide the same variety of products from the same suppliers. When the sales man of
the store has the option to advice a customer about what he can purchase, he always
try to sell the most expensive goods and also goods that are created by Georgia
(Interview citation).
2.6.
Pricing strategy
Mikel uses the strategy of non-price competition. Non-price competition exists when
a retailer does not focus on the price of the products but emphasizes on the products
quality, the unique features, the promotion, the service, the packaging or other elements
that distinguish its products from other retailers (Hult, Pride and Ferrell 2012, p.570).
Mikel Company distinguishes its products because of the high quality offers and the
well-known brand name it wants to develop. From the beginning of the operations as a
retailer they have keep the prices stable, knowing that they have not a competitive
price. But the price compared to the quality and all the services offered is very logical
(Interview citation).
2.7.
Direct competitor of a retailer is another retailer who offers similar products and
services. An indirect competitor is another retailer that offers slightly different products
and services but satisfies the same needs of the customer (South-Western Cengage
Learning, 2011). Mikel stores face direct competition from retailers such as Coffee
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Island, Starbucks, Venetis S.A. and Grigoris Mikrogeumata and Everest S.A. These
retailers have the same target group with Mikel and fulfill the same needs of consumers.
Coffee Island provides the same categories of products with Mikel but focuses more to
take-away and delivery than to service in the store. Venetis has created a section in the
business called Caffee Veneti, which follows approximately the same strategy with
Mikel. Moreover, Mikel faces indirect competition from retailers such as McDonalds and
the independent caf of each area. McDonalds are more food retailers but also they
provide coffee, juices and beverages to the consumers.
3. Retailing Mix
3.1.
Information Technology
Mikel stores are using information technology in order to be more efficient. The store
in Halandri has electronic database that includes all the products available of the
inventory. Every time a transaction occurs, automatically the database is informed and
updates the availability of the inventory of every single product. The database of the
products has 124 different barcodes that represent the variety of the products. Another
tool of information technology used is the PDA supported by the TwinSoft Athens which
is a company software company. The waiter of the store by using the PDA has the
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ability to send the order directly to the barista who prepares it. Thereby, the benefit is
the efficiency that makes the service much quicker (Interview citation).
3.2.
CRM applications
3.3.
Promotion Mix
3.4.
Employees of Mikel stores have a particularized hierarchy and are organized on the
same bases. Each employee has his own role and position in the store. Every store has
a supervisor who is responsible for the proper functionality of the store and the
productiveness of the employees. In the hierarchy, after the supervisor comes the
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3.5.
Service mix
Mikels stores offer delivery service, which is very helpful and important for people
who cannot come to the store. There are too many customers who are working and
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cannot leave their jobs. Delivery service is very fast and includes all the goods that a
customer could buy himself from the store (Our Company, 2014).
4. Strengths and Weaknesses
There are some significant tools on which Mikel Company base his successful
performance from 2008 to 2014. An important factor for the success of the company
was the competitive advantages. Mikel offers high quality coffees, when at the same
time competitors have lower quality coffees. Another factor of success is the unique way
of creating a coffee. They use evaporated milk and have 32 different syrups. The
combination of these plus the premium quality and the knowledge of the employees,
lead to a very good outcome. Another factor of the successfulness of the company
resulting from the human resource management. Mikel emphasizes on the good training
of the employees before start working in the store. Training is very important because,
employees develop all the required skills and knowledge to become effective in their
positions.
Mikel has not weaknesses that make the company weak against competitors, but
can make some improvements in order to gain a bigger market share. The product that
Mikel sells more frequently is coffee. The consumer takes into consideration two
variables: the quality and the price. The price of the coffee in Mikel stores is higher than
the competitors. For example a cold espresso freddo costs 2 euros and in Venetis costs
1,5 euros, both for take-away service. Mikel would increase its profits if decrease its
prices but maintain the high quality of the products. Finally, another improvement could
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5. Bibliography
Our Company, the story of MIKEL, viewed 15 July 2014,
< http://www.mikelcc.gr/en/our-company/ >
Levy M. & Weitz B., 2010, Retailing Management, 7th edn, McGraw Hill, International
Edition.
. : ... Mikel!,
2014, viewed 15July 2014, <http://www.athensmagazine.gr/portal/newsnpeople/85562>
Hult G. Tomas M., Pride William M., Ferrell O.C., 2012, Marketing, 16 th edn,
International Edition, South-Western Cengage Learning.
Contact, SHARE YOUR "MIKEL" EXPERIENCE WITH US!, viewed 16 July 2014.
<http://www.mikelcc.gr/en/contact/ >
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