Coffee Shop Essay

The purpose of this marketing plan is to outline the complete marketing strategy, tactics, and programs for Dot. L Coffee (hereafter, â€Å"Dot. L†). Dot. L is a specialist Coffee Company that focuses on specialty coffee of Latte, coffee based products and foods as well. Dot. L is a new coffee shop in the river side district. Dot. L will be known for over 6 flavors of latte, coffee and coffee based products. In addition, light snacks and sandwiches will be offered to accompany the cappuccino and coffee based products. The cafe establishment will play modern music for ambiance and provide free wireless internet access for patrons to attract professionals in the nearby business areas. The mission of Dot. L is in the vanity of the city, Dot. L can bring you the ease of a precious. Dot. L will be unlike other cafes in that it will introduce customers to the different flavors of coffee and foods in a leisure non pressure environment. Furthermore, in a competitive market like Starbuck, Dot. L hopes to set itself apart by reaching out to those diversity flavors of latte without the high prices. The target market consists of two market segments: †¢ People who are deeply in love latte and people who hope have a relaxing time †¢ Business people from the downtown business centers and professional buildings Situation analysis is explored. This includes an overall marketing environment analysis for the company as well as more specific situation analysis such as competitor and customers action for the marketing analysis. An evaluation is conducted followed by an action plan outlining how to achieve the marketing objectives, which includes: promotion, price discounts, a bi-monthly newsletter, advertising in television and search for new channel partnerships. Company overview and the Mission Statement Dot. L will be a distinctive coffee shop which have own characteristics and culture that will serve the river side residential district. The coffee shop offers flavored latte and other coffee products, light snacks, foods and free wi-fi service for customer surfing on-line. The Dot. L primary place of operation will be located on the river side with nice view of Brisbane River. The business persons in the office building will add to the number of patrons and the circumstance their also can attract consumer to choose that place. There are plans to open additional locations after 3 years of operation. Dot. L will operate from Monday to Sunday. Monday thru Thursday, five employees will be working from 10 a. m. to 10 p. m. Friday and Saturday will work the same; however, three employees closing will work until 12 a. m. The cost for each full time labors might be 16 dollars per hour and the cost for part-time labors might be 9 dollars. The name of this coffee shop is Dot. L which means L refers to latte. Therefore latte as company core coffee products and latte art can be discovered in Dot. L. [pic] As stated in the company’s mission statement: Dot. L aims to be the cafe have own style and culture in Australia. In the vanity of the city, Dot. L can bring you the ease of a precious. Table of Contents Executive Summary2 Company overview and the Mission Statement3 Introduction6 Product Description6 Environmental Scan7 Economic environment7 Legal, political and regulatory environment8 Social and cultural environment8 Technological environment9 Competitor9 Market research10 Customers12 Marketing objectives and Market tactics12 Marketing objectives12 Product12 Price13 Place13 Promotion14 Marketing Tactics15 Market forecasting16 Action plans17 Financials18 Control20 Conclusion21 Reference list:22 Appendix 124 Introduction This marketing plan examines the steps required to reposition Dot. L cafe in the Australian marketplace. Dot. L is a cafe brand will locate on river side in Brisbane. Dot. L offers a variety of coffee, specialty coffee of Latte, coffee based products and foods. In addition, in order to attract consumers latte art also be adopted into the coffee products. Basically the price for the regularly coffee the price will not over four dollars. The cafe will focus on the business people and normally customers. Dot. L in Australia employ approximately 30 labors includes chiefs, shop assistant, shop keeper, senior manager. The Dot. L brand name comes from its core products will offer in the cafe that aim to: 1. Attract consumers 2. Build brand 3. Trade profit achieve about 8-10% The marketing plan followed by analysis the situation in marketplace, competitors analysis for the Dot. L entry into the market. Furthermore, market research and customers analysis will provide to assist the Dot. L to locates the market accurately. It also considers the market forecasting and financials for the three-year period. Product Description The Dot. L will offer many items that would have perfect taste. From traditional coffee to the light snacks and foods, Dot. L will offer something traditional and original for all tastes. Daily latte specials will be offered, featuring a different blend and flavor each day. The cafe specialty will prefer to European style design. The six different lattes are includes: cafe au lait; ghetto latte or bootleg lattes; hot or iced latte versions of chai, matcha, and Royal milk tea; red latte; latte macchiato and Caffe latte. Latte and Coffee will be sold in three sizes, with prices ranging from $2. 00 to $5. 00. Flavors will be available at an additional charge of $0. 50. Espresso, cappuccino, mocha, and other specialty drinks will be available in two sizes and will cost $3. 75 and $6. 50. Environmental Scan. Economic environment Robust business, consumer confidence and high export price for raw materials have fuelled the economy for 16 years. Australia has a strong economy with per capita gross domestic product (GDP) of $ 38,000(CIA, 2009), and GDP was estimated to be growing at 3. 8% annually (CIA, 2009). However, in 2008 with the impact of the global economic crisis, manufacturing output and employment started to falter, and the Australian economy headed into a severe slowdown (Jackson, 2008). Even through, in 2010 the economy has begun to turn for the better, the consumers’ purchase tendency is not recover. As both cause and effect, consumers cut back on spending, specifically on food, clothing, furniture, entertainment, cars and mobile phones (Uren, 2008). The economic conditions in Australia present opportunities and risk for Dot. L. The decrease in consumer spending will force cafe industry to seek specialist assist to retain customers and maintain sales. In the other hand, this will increase the demand for specialist service like Dot. L which can provide business men have plcae to release pressure. However, the reality of a downturn may cause retailers to cut back on all spending including on retail consulting and training services. Additionally some retailers are likely to go out of business. Legal, political and regulatory environment Small business branding through labeling and packaging conclusively builds company and product recognition. Positioning the unique product through private label aimed at the target market results in an effective, low cost marketing strategy. It is the solution to getting customers into the store and back again and again. In American, the government publishes a legislative memo of a cyber-cafe restriction in 2006 (New York Civil Liberties Union, 2006). The China government also publishes the same restrictions. Because most of the cafe will provide the service of internet, so, they should pay attention to theses legislative issue (Rodnin, 2005). Social and cultural environment According to Australian Coffee Traders Association, Annual General Meeting 2006 that pointed out overall speaking, the Australian coffee market is very competitive but consumers are brand-loyal (ACTA, 2008). Australia is a country of different immigrants, especially proud of a traditional strong coffee culture started by European immigrants(AusFoodNews,2010). The strong coffee culture of Australia has influenced growth in coffee shops, especially among the younger generation. Coffee drinking has become an integral part of the modern lifestyle. In Australia, the specialist coffee shops have become more than just a place to drink coffee. Increasingly, coffee shops serve as places to meet for business and pleasure – a location for peace and quiet away from home and office. ACTA (2008) stated that more than one billion cups of coffee are consumed in cafes, restaurants and other outlets each year, this is an increase of 65% over the last 10 years. The Coffee consumption of Australian per capita has doubled over the last 30 years (ACTA, 2008). According to a new report by Euromonitor International – â€Å"Consumer Foodservice in Australia†. (2004) the number of transactions through coffee shops grew by 7% and value sales grew by almost 29%. Technological environment Technological advances in Australia have resulted in an increase usage of the internet. This has resulted in all industry expanding into a new channel: offering services, marketing and selling products over the internet. For Dot. L, the cafe can take this advantage which is using intern as the company’s channel to promote the marketing. Competitor The popularity of franchising as a business opportunity in Australia has also had a significant impact on the number of chain specialist coffee shops, such as Gloria Jean’s, The Coffee Club, Zarrafa’s Coffee which expanded mainly through franchising (Market Research World, n. d. ). Euromonitor International’s research shows that the Gloria Jean’s chain had the largest increase in outlets in 2004, thereby boosting its market share from 28% in 2003 to 37% in 2004. Gloria Jean’s has already opened over 900 shops around the world, and 407 stores are established in Australia-wide. Therefore, Gloria Jean’s can be regarded as the most powerful competitor. The Coffee Club has expanded its business to overseas, including Beijing, Bangkok, Dubai and Thailand. It has had more than 200 stores across the whole world. Compared with these two brands Gloria Jean’s and The Coffee Club, Zarrafa’s Coffee is a young brand. The brand comes from Gold Coast, and it only has 14 years history. Zarrafa’s Coffee has 41 stores across South East Queensland. Consequently, Zarrafa’s Coffee can be thought as the least powerful competitor for Dot. L. According to the report, sales of hot drink products in Australia surpassed A$1350m in the year 2008 and is expected to be worth A$1473m in 2013, with the coffee category accounting for the largest share followed by tea (Trading Room, 2010). It can be assumed that more people might enter the cafe industry. Market research In this section is to present the research about the marketing research for the Dot. L Coffee. Since this is a brand, the main goal of the Dot. L Coffee is to establish brand awareness among the target audience, which is business people, and 94 percent of them are aged 25 to 40. In this research, it chooses 10 male and 10 female to do the interview. Figure 1: The Frequency of the respondents to have coffee [pic] Figure 2: The Buying Habits of the Respondents [pic] According to the figure 1 and 2, of the business people that polled, 70 percent said they have coffee every day. And a full 58 percent said they prefer to enjoy coffee in the cafe. Others will enjoy coffee in their office or at home, here, 52 percent of them will buy the coffee products in the coffee shop, and 47 percent of them prefer buy it form the supermarket. Figure 3: The Acceptable Price per Coffee of the Respondents [pic] 45 percent of the respondents said that they would like Latte, and both of respondents who prefer Espresso and Mocha are divine 15 percent, 25 percent of respondents choose Cappuccino. Referring to the figure 3, 70 percent of them represent the acceptable price per cup of coffee is $3-8 dollars, and below $3 dollars and above $8 dollars will share the same percentage of 15 percent. Take a look at this chart, the best media mix, then, would be a combination of TV and magazine advertisements. Both of TV and magazine were divine 30 percent of the total population. And 20 percent of people prefer print advertisement. To conclude, even though our target audience is clearly defined, introducing a new product is always a gamble. But with the proper media mix we can certainly lessen the chance of failure. Customers The primary target market for the Dot. L Coffee will be the local business people. The cafe will be a sit-down coffee shop with wi-fi connectivity. The cafe will serve a variety of flavored latte, coffee products, beverages, sandwiches, and treats to local customers. The target market consists of two market segments, that is people who are deeply in love latte and people who hope have a relaxing time; and business people from the downtown business centers and professional buildings. Marketing objectives and Market tactics Marketing objectives The purpose of this marketing plan is to launch a cafe with delicate bakery, and professional coffees and which will bring simple cozy and friendly atmosphere. Based on the product features and marketing 4P principles, the three years’ specific marketing plan will be given as the following to ensure objectives and expectations are met. Product First off all, the key customers are those people who fond into Latte which means the product image is designed as professional Latte maker with friendly, easy communicate, happy relationship atmosphere. In order to match the product concept: simple and cozy so that the color of the cafe should be designed as clean, comfortable. And the coffee cup and tableware would be designed to match the interior decoration as mildness and simple. The main special coffee is Latte. Meanwhile, espresso, cappuccino, mocha, and other specialty drinks will be available too. The latte flavors will include vanilla, chocolate, and caramel. This can be designed as the first year menu and in the following three years the product will be developed according to the market trend. Price The Dot. L cafe will specially offer delicate bakery with other beverages such as soda and juice. Coffee will be sold in three sizes, with prices ranging from $2. 00 to $5. 00. All prices take into consideration the cost of material, 25% for food and 45% for beverages. Espresso, cappuccino, mocha, and other specialty drinks will be available in two sizes and will cost $3. 75 and $6. 50. All different deserts will be sold by the slice such as cheesecake, chocolate cake, muffin, sandwich and cupcake. Prices range from $2. 75 to $8. 00. The frequent customer can join the membership and participate the buy 10 get one free activity. Place The cafe name Dot. L is from the coffee Latte which is combined with espresso and steamed milk. Hence, the image of the cafe will deliver simple and warm message to customers. The location of Dot. L will be choosing at Brisbane river side. The space will be designed with a glass room and interior will be more concise and mediterrane an style. The common area will have white coffee tables surrounded by plush chairs and sofas and allow customers to set up laptop and spread out paperwork. The walls will be painted into warm color to enhance the relax and friendly atmosphere. Promotion Besides, in order to develop the market and receive good reputation from the very first. The Dot. L Cafe will be promoted in a variety of ways. The annual budget allotment for advertising is $19,904 for the first year of operation. These monies will be distributed as follows: 1. Southern Star – Southern Star will be printed monthly showing the nightly specials. They will be distributed throughout the area on cars, handed out at the library, delivered to the local office buildings, and posted on street signs and other obvious places. 2. Radio – The cafe will run many radio spots on local radio stations. The ads will feature the daily coffee specials and will air during the morning and afternoon drive times to capitalize on drive-by traffic. 3. Entertainment – The Dot. L Cafe will feature local entertainment every other weekend. The entertainers will provide music, poetry, art, and dancing. These events will be promoted through additional print and radio spots. Besides, Dot. L will engage in promoting premium varieties of coffee by educating their customers about the different coffees that are available. This strategy would lead to increased sophistication among customers. 4. Web Presence – The Dot. L Cafe will promote the business and specials over the Internet through a website. The website will be updated monthly to advertise specials and product offerings. The Radio and newspaper advertisement could be launch at the first half year to attract more customers. Entertainment and web presence should be developed as long term promotion plan in the next three years. The Dot. L Cafe will promote itself to its new customers by offering discount memberships for frequent consumers. There will be buy 10 get one free card available for coffee. The remaining advertising budget will be used to print membership and frequent consumer cards. Serve the highest quality food and beverage and meanwhile maintain low cost of goods and inventory is one of the key objectives. Thus Logistics and distribution would be a crucial part as well. The fresh meats, cheeses, and vegetables will be purchased through good reputation food source distributors. The researching and negotiating of the best prices with distributors would be put into the project process too. Marketing Tactics To achieve the above marketing objectives, this plan considers the tactic through the marketing mix which includes product, promotion and pricing. Colour appeal, packaging and style are included in product section. As the before shown, the target market of the cafe is business people who works in downtown and modern buildings. These potential customers can be regarded as white collars and the middle class. They hold well-paid, and are to pursuit quality lifestyles. Based on these, the basic colour tone will be set as dark colour tone, such as brown and black. The logo of the cafe is to stress a simple but elegant style. Because Dot. L cafe is a new brand for customers, so the promotion strategy must be heavy to entice the brand trial. The advised promotion approaches are print ad, billboard ad and in-store promotions. Setting a billboard ad on the way to the city and riverside is strongly advised. The cafe locates on the riverside; for this reason, putting ad on ferry is recommended. The pricing objective is to appeal the people who take coffee daily. A regular size cafe au lait which is the main product is priced as $4. 50. The cafe can give 5% discount to people who hold senior card. Furthermore, a point card can be given in the store when customers are making purchase. The card allows that customers can get 1 free coffee after they buy 9 coffees. Market forecasting There are more than 100 cafes in Brisbane, and 17 cafes exist in Southbank where a part of riverside is. According to one market research (Weston 2010), more and more Australian have already totally accepted the coffee culture; in addition, they are very to enjoy this culture. Therefore, a big growth on takeout coffee is brought by this social change. As a matter of fact, the flourishing demand of coffee drinking directs to the blast of many specific coffee shops. According to another research, Australians prefer to coffee with milk rather than other styles. Datamonitor’s Market Data Analytic (MDA) database indicates that retail coffee sales in Australia gained around A$752m. The Australia coffee market is in the second place around the Asian Economic in 2008. Another research predicts that the total amount around A$473m of profit can be reached in 2013. All in all, it can be concluded that there is a huge potential in the cafe market. Action plans According to the planed given above the relevant GANTT chart will guide this project go smoothly complete on time. Figure 4: The Dot. L Project Schedule |Dot. L | |? |? | |Start-up Assets to Fund |$26,000 | |Total Funding Required |$88,290 | | | | |Total Assets |$26,000 | | | | |Liabilities and Capital | | |Liabilities | | |Total Liabilities |$33,290 | | | | |Capital | | |Planned Investment |$55,000 | |Loss at Start-up (Start-up Expenses) |($62,290) | |Total Capital |($7,290) | | | | |Total Capital and Liabilities |$26,000 |. 2. Break-even Analysis Break-even data is presented in the chart and table below. [pic] Figure 6: Break-even Analysis |Monthly Units Break-even |7,294 | |Monthly Revenue Break-even |$18,462 | |Assumptions: | | |Average Per-Unit Revenue |$2. 53 | |Average Per-Unit Variable Cost |$0. 63 | |Estimated Monthly Fixed Cost |$13,847 | 3. Projected Profit and Loss In the first year, the Dot. L Coffee will have sales of about $533,764 of operation. In year two and three the Dot. L will have sales increases of about 10%, resulting in sales of $576,551 and $622,575, respectively. Operating expenses are $304,136 for year one, $327,694 year two, and $353,326 year three. The results for the first three years of operation are net income of $36,521 for the first year, $42,356 for the second year, and $47,819 for year three. Control Dot. L will continually evaluate the marketing environment, particularly the economic environment, due to the economic downturn, and the competitive environment. Further, in relation to the specific tactics undertaken by Dot. L for the 36 month period, each will be assigned a person who will be responsible for the success of the tactic, as well as a specific final review date. |Tactic |Responsibility |Review date | |Promotions to focus on augmented product and core product |Marketing Manager |May 2010 | |benefits | | | |Determine price discounts and rollout strategy to clients | | | |Create newsletter and implement process for it to be |Management Team |Aug 2010 | |distributed monthly | | | |More Direct-response advertising in television |Marketing Manager |Sep 2010 | |Implement selling short-term modification recommendations | | | |Search for distributors with which to form channel |Sales Director |Jun 2011 | |partnerships |. | | |Expand business to more location |Marketing Manager |Mar 2012 | | | | | | |Channel Manager |Nov 2012 | | | | | | |Sales Director |Jan 2013 | Conclusion This report sets out the marketing plan for Dot. L in Australia. It was decided that, Dot. L aims to be the cafe have own style and culture in Australia. In the vanity of the city, Dot. L can bring you the ease of a precious. The marketing strategy was explored, including each of the marketing mix areas, and tactics were recommended relating to direct-response an promotions, price discounts, and find channel partnerships. It is believed that there is opportunity for Dot. L to built own brand culture and expand in cafe industry’s marketplace. It is, therefore, this marketing plan can assist Dot. L growth in the marketplace. Reference list: Acta (2008). AUSTRALIAN COFFEE STATS. Retrieved May 16, 2010 from http://www. acta. org. au/article. php? a=2 Hofmann (2008). Specialist coffee shops in Australia see vigorous expansion. Retrieved May 17, 2010 from http://www. franchiseek. com/Market_Trends_Coffee_Shops_Australia_0706. htm Jellie (2006). Coffee by numbers. Retrieved May 17, 2010 from: http://www. smh. com. au/news/good-living/coffee-by-numbers/2006/07/17/115298845 5398. html New York Civil Liberties Union(2006), Legislative Memo: Cyber-cafe Restrictions Retrieved May 17, 2010 from: http://www. nyclu. org/content/legislative-memo-cyber-caf%C3%A9-restrictions-2006 Rodnin(2007), Motherboard makers may be affected by Internet cafe restrictions in China, Retrieved May 17, 2010 from http://www. vaosoft. com/forum/index. php? showtopic=441&pid=612&mode=threaded&show=&st=0 Shaun Weston (2010). Australian love coffee. Retrieved May 15, 2010, from http://www. foodbev. com/report/australians-love-coffee Trading Room (2008). Australia a nation of coffee drinkers. Retrieved May 17, 2010 from http://www. tradingroom. com. au/apps/view_article. ac? articleId=1196615 Wong (2010). Aussie cafe culture accounts for ‘biggest growth in coffee’. Retrieved May 17, 2010 from http://www. ausfoodnews. com. au/2010/03/04/aussie-cafe-culture-accounts-for-biggest-growth-in-coffee. html Appendix 1 The Questionnaire of the Coffee Market. This is a marketing research of the style, habits and opinions of coffee in your everyday life. Section 1: Basic Personal Information 1. What is your gender? A Male B Female 2. What is your age? A 18-25 B 26-30 C 30-40 D Above 40 3. What is your Occupation? A Students B Business men C Employee D Others 4. Are you married or single? A Married B Single 5. What is your family’s size? A 1-2 person B 3-5 person C 6-8 person D Above 8 person Section 2: 6. Where can you get the information about coffee? A Internet B Magazine/ newspaper C TV D Print Advertisement E Others 7. Where are you usually buy the coffee product? A Supermarket B Internet C Coffee shop D Others 8. How offen do you drink coffee? A Every day B 3-4 times per week C Once a week D Never 9. Where do you usually drink coffee? A Cafe B At home C At office D At campus E Others 10. What kind of coffee would you like? A Latte B Espresso C Cappuccino D Mocha E Other specialty drinks 11. How much of a cup of coffee is acceptable for you? A $2-3 /cup B $3-5/cup C $5-8/cup D $8-10/cup E Above $10/cup Thank you for your participation!!!