The American College of Greece

Module: MK3156 Retailing

Instructor: Chris Galanis
Karagiannis Eleftherios
Submission date: 18/07/2014

Mikel Coffee S.A. Retailing Project

1. Information of Mikel Company

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

Sandwiches Sweets Hot drinks

Cold drinks Juices and

beverages

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

2. Retailing strategy of Mikel

Retail strategy results from 3 elements: 1) The target market of the retailer, 2) The
specific use of retail format in order to satisfy customers needs, and 3) Through which
techniques and bases the retailer will create a competitive advantage against
competitors (Levy and Weitz 2010, p.134). Because of the franchise policy which has
the same rules for every store, they are all follow the same retailing strategy.
2.1.

Mikels target market

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

The term sustainable competitive advantage is referred as an advantage towards

the competition that exists for a long period of time and cannot easily be copied (Levy
and Weitz 2010, p.134). Some ways for the retailers to create a competitive advantage
are: to have loyal customers, to have good manage of human resources, to offer unique
products, to have a good customer service, to be in the right location and to have good
information and distribution systems (Levy and Weitz 2010, p.137). Through my
interview in the chain store of Halandri the supervisor informed me that all the stores of

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

A retailer, in order to gain a sustainable competitive advantage is to choose the right

location. A customer always takes into consideration the location of the store he wants
to visit (Levy and Weitz 2010, p.199). Significant elements for the success of a retailer
are the high traffic flow of pedestrians and cars and the accessibility, which is how easily
the customers can reach the store and then leave. Also, another important characteristic
is the visibility of the store, which is how easily people can see the store when they are
passing. (Levy and Weitz 2010, p.223-224).

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.

Merchandise strategy and Category management

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 and indirect competitors

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

Customer relationship management is a process that based on customers

information, marketer identifies customer preferences and behavior. This helps to
recognize and develop the right products and services to satisfy the customer needs
(Rygielsk, 2002 cited in Mehrdad, H, & Seyedeh Faezeh Sadati Seyed, 2013).
Mikel identifies customer preferences by using various techniques. Through
scanning the barcode of every products sold, they identify which products are more
likeable to customers. Another CRM application is the complaint form that every store
has. Customers can write what problems they faced, which products and services they
like or not. In every store the supervisor has the obligation to ask the customers who are
served if their order is as they expected to be. If there is an unsatisfied customer, his or
her order will be replaced with a new one without any extra charge (Interview citation).
Moreover, Mikel uses social media to communicate with its customers. Every store and
also the whole company have a Facebook profile where customers can give some
advices or express their opinions. Finally, Mikel gather information from its own website.
It has a contact section where customers can send a message by using mail (Contact,
2014). Through all these techniques, Mikel Company gathers all the information needed
in order to create or maintain the most likable goods and services offered and keep their
customers loyal.
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3.3.

Promotion Mix

Mikel uses a variety of techniques to promote its Company. Promotion is necessary

for every new company in order to create awareness about its existence. Nowadays,
social media help companies to become known and recognizable by consumers. Mikel
uses Facebook, Twitter and Instagram to promote its goods and services by posting
photographs which present them. Another very significant way Mikel uses to promote its
goods is the products sampling. Halandri store, at the first week of operations gave over
1.000 free coffees to people in the local area (Interview citation). Thereby, local people
informed that a Mikel store opened in the area and Mikel created potential customers.
Moreover, Mikel had organized a party in Kifisia, where offered free coffees to people
and had as a guest a famous Greek singer. This, created buzz and gave prestige to the
company. Also, Mikel distributes brochures that include all the goods offered.
Furthermore, Mikel promotes its products from within its stores. They give souvenir
magnets to the customers and all the employees wear clothes with the brand name on
it. Also, all the new products are being promoted by the employees of each store and
from banners on the tables (Interview citation).

3.4.

Human Resource Management

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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production manager. The responsibilities of the production manager concern the

supervision of the quality of drinks made by the barista. The positions which are on the
same level of hierarchy are the cashier, the waiter, the barista, the delivery and the
employee in the kitchen. Halandri store has one employee who covers each of those
positions except from delivery position which has two (Interview citation).
Each employee is employee who is hired by Mikel has to follow a training session.
For the stores of Athens, the training takes places in the central building of Mikel in
Athens and for the other areas all over Greece the training is in Larissa. The training
lasts for a month and each employee is being prepared for a specific position. Also,
when they start working in the store they follow some guidelines from the most
experienced employees if it is needed (Interview citation).
Moreover, there are some motivational techniques used, in order to encourage
employees become more effective. Firstly, Mikel stores provide a bonus on the salary of
an employee if he is very good on his position. Secondly, if a position in a store is
available, the most effective employee will be promoted. Thirdly, a good employee will
be rewarded with trust from his supervisor (Interview citation).
It is important to mention that everything in Mikel is made by following specific rules,
which have been taught during the training. For example, baristas has to make coffees
following a specific way and the service is made under a certain retinue. All employees
have to wear a uniform and they have to change it every day with a clean one (Interview
citation).

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3.5.

Supply chain management

Supply chain management is a set of techniques that organizes effectively and

efficiently transaction between the retailer and their stores, warehouse, suppliers,
manufacturers, and also at the right quantities, the right time and the right location (Levy
and Weitz 2010, p.278).
Mikel Company own two buildings, which composed by offices and warehouse. The
first one is in Larissa and the second one in Athens. Also, in Larissas building takes
place Georgia Fresh Flavors too. All the products of Georgia are created in Larissa.
These are distributed to the close areas and to the warehouse of Athens or some of
them go directly to stores. Furthermore, Mikel collaborates with some suppliers. They
have their bases in Athens so, they send supplies directly to each store of Athens. Mikel
collaborates with companies who have their own trucks and offer delivery services and
undertakes all the transportation needed (Interview citation).
All the stores have their stock in the store. Specifically, Halandri store has a stock
that lasts for 10 days. Anytime during the day they can be informed about the availability
of the stock they carry, because of the barcode scanning of the products (Interview
citation).
3.6.

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
15

be to create an information system or online application which will allow consumers to

make their orders online via their mobile phones or personal computers. So far, only
one Mikel store located in Thessaloniki has created a mobile application through which
people can make their order choosing from an online catalogue and receive their order
in every place they are within the serving area of the store.

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5. Bibliography
Our Company, the story of MIKEL, viewed 15 July 2014,
< http://www.mikelcc.gr/en/our-company/ >

success story Mikel, 2013, viewed 15 July 2014, <

http://thessalianews.gr/index.php?option=com_content&view=article&id=26858:success-story-mikel&catid=54:business&Itemid=93 >

Mikel;, 2014, viewed 15 July 2014 <

http://www.athensvoice.gr/article/taste-voice/%CE%B8%CE%AD%CE%BC%CE
%B1%CF%84%CE%B1-%CE%B3%CE%B5%CF%8D%CF%83%CE%B7/%CE%BC
%CE%B1-%CF%80%CE%BF%CE%B9%CE%BF%CF%82-%CE%B5%CE%AF%CE
%BD%CE%B1%CE%B9-%CE%BF-mikel >

Mikel: 40 2014, 2014, viewed 15 July 2014

<http://www.toxrima.gr/mikel-epelasi-stin-athina-40-simia-to-2014/ >

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.

South-Western Cengage Learning, 2011, viewed 16 July 2014,

<http://www.smallbusinessbc.ca/starting-a-business/understanding-your-competition >

Mehrdad, H, & Seyedeh Faezeh Sadati Seyed, M 2013, 'Effect of Knowledge

Management on Success of Customer Relationship Management in Eghtesad Novin
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Bank of Tehran', International Journal Of Business Management & Economic Research,

vol 4, no. 6, pp. 840-841.

Contact, SHARE YOUR "MIKEL" EXPERIENCE WITH US!, viewed 16 July 2014.
<http://www.mikelcc.gr/en/contact/ >

Personal Interview, Supervisor of Halandri Mikel store, 10 July 2014.

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