CASE STUDY TOPIC:- LAVAZZA: THE CHALLENGES

OF FOREIGN MARKET ENTRY IN A BRAND-

INTENSIVE INDUSTRY

Presented by: ROUNIK ROY

Subject:- Managerial economics
Faculty: PROF Aparajita Sanyal PGDM- 2022-24
CALCUTTA BUSINESS SCHOOL
INTRODUCTION:

Luigi Lavazza SpA (Lavazza) was the largest coffee maker in Italy, often analogously referred to as Italy's
favourite coffee, and the seventh-largest coffee roaster in the world. Founded in Turin, Italy, in 1895, Lavazza
had a 125-year-old legacy with deep roots in Italian coffee culture.

 Since the 1980s, after Lavazza ventured into global markets, it had seen tremendous growth, and by 2020,
more than 70 percent of Lavazza's global sales came from overseas markets.
THE ELEMENTS OF LAVAZZA’S BUSINESS MODEL THAT MADE THE COFFEE MAKER
SUCCESSFUL IN EUROPEAN MARKETS.

 LUIGI LAVAZZA’S EMPHASIS ON INNOVATION.

 continued to spend heavily on research and development. In 2018 alone, Lavazza spent more
than 2.5 percent of its revenues on research and development.

 open Lavazza cafés(Boutique cafes) designed to demonstrate the coffee maker's creativity
and emphasize the rich taste of its espresso blends.

 Lavazza built and leveraged a community of bar owners by providing them with the training to test and
serve coffee. These coffee bar owners became an integral part of Lavazza's success in Europe, as they
helped to control the quality of the customized, handcrafted single-serve coffee and became local brand
ambassadors.

 LAVAZZA’s INNOVATIVE MARKETING In the 1950s, as TV advertising soared, commercials became

the proving grounds for creative professionals . They leveraged this visual medium and synonymized
Lavazza coffee with the elegant Italian way of drinking coffee .
 THE PROS AND CONS OF THE CUSTOMIZATIONS AND
STANDARDIZATION STRATEGIES THAT COMPIES CAN USE
WHEN EXPANDING THEIR BUSINESSES.

Standardization Customization

Pros. • Economies of scale. • Respect local specifications and

expectations.
• Faster set-up time.
• Excellent local image.
• Single Coherent global image.
• Customers keep their landmarks and feel
noticed.

Cons. • Possible loss of advertising effectiveness. • Higher cost.

• Little reactivity and little flexibility. • Time-consuming and poor speed of

execution.
• Can create a negative reaction from neglecting
local needs Customization. • Difficulty to know what consumers really
want.