BSB126 Marketing Plan PDF

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Received a 7. Marketing plan on the business Merlo....

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BSB 126 MARKETING PLAN

NAME: STUDENT NUMBER: WORD COUNT: 1618

I. SITUATION ANALYSIS Merlo is a Brisbane established coffee retailer, with over 20 years of industry experience on the coffee culture in Australia. Having started in 1992, Merlo has conclusively proved that Merlo is Australia’s favourite coffee for two consecutive years having won the award at ‘I love Food Awards’. The renowned coffee brand Merlo continues to prove it’s the leading independently owned coffee roaster by wholesaling to more than 1,500 cafes and restaurants in four states nationwide (Merlo, n.d.). With such an extensive portfolio, from retailing, wholesaling, to charity events, Merlo needs to continuously grow as a business to remain one of the top coffee roasters nationwide. As Merlo’s product’s, specifically their coffee, are the most reputable product, it would be beneficial to increase different modes of distribution to customers who are time-poor as most coffee consumers are late teens to early adulthood who have started working. Due to the over-saturated coffee shop market, it has forced Merlo to find other alternatives for continual growth. One of these alternatives is the social macro-environmental factor of time convenience. Social trends have shown that consumers purchasing styles have shifted, as consumers are more prone to buying goods and services for the main reason of conveience. Services such as Woolworths Click & Collect and Food Ordering and Delivery apps such as UberEATS and Foodora allow consumers to order before picking up or getting their goods delivered all for their convenience. Another significantly important macro-environmental factor is culture. The Coffee culture in Australia has always been on a steady increase, with the café industry revenue expected to increase by 4.0% (IBISWorld, 2017). This coffee culture has slightly changed as a new ‘culture’ in the younger generation find it more hip to drink coffee where as the old traditional coffee culture, people drank it for a boost of energy. Merlo will penetrate a new market by making a drive-thru to cater to the current and new target markets.

II. MARKETING GOAL In a society that is technology driven and time pressured, consumers are embracing more convenient means to purchasing their good. Establishing Merlo Café Drive-thru’s would help their time-poor consumers or other potential consumers who drink coffee and prefer it on the go. Merlo’s goal should be to increase the number of cups served per day by 10% within the next financial year.

III. MARKETING STRATEGY Over the past five years, an increase in family and work commitments has driven the demand for coffee, also the reason for the 7% increase in revenue from 2012-17 (IBISWorld, 2017). As consumers continue to live busier lifestyles, there has been an increasing demand for fast, convenient food and dining options. Businesses have been aware of this trend and have provided on-the-go items. Research has shown Australian’s who work 60 hours or above in any given week are likely to consume an average of 10.1 cups weekly, compared to 8.6 cups for non-works or 8.8 cups for those who worked 35 to 39 hours (Australian Food News, 2014). Segment 1: Working Adults Demographic

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Have a job  income (can afford the luxury for coffee/ or more than 1 cup per da

Factors

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Age: Working Full-time adults 26 – 45 years

Geographic

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Work location  exposed to more Coffee (by stores or surrounding

Factors Behavioural

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coworkers Price sensitivity is low, not a major factor in deterring adults due to earning an

Factors

income

Psychographic

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Avid Coffee drinkers more likely to have loyalty cards Busier Lifestyles

Factors

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Own a vehicle

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Convenience & fast

Segment 2: Late Teens/Students

Demographic

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Jobs: Casual/part-time workers  lower income (less likely to purchase coffee da

Factors

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Age: 18 – 24 years

Geographic

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Universities: multiple coffee stores, not an affordable luxury to most students

Factors Behavioural

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Price sensitivity is high due to lower income

Factors

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Loyalty Member, however, lower use  Joined for the perks

Psychographic

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Prefer energy drinks

Factors

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Lifestyle is not as hectic

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Seasonal drinker (maybe during exam periods)

Target Market: Working Adults Adults are more likely to consume coffee through a drive-thru then students from 18 to 24. Having busier lifestyle and mostly working full-time on average 50 to 60 hours with an average of 10.1 cups weekly (Australian Food News, 2014). Having a job make the luxury of purchasing coffee daily an affordable luxury for adults due to the frequent income. Also, two in three Australian adults drive to work, equalling to 71% of full-time working adults, which increases the chances of this target market utilising the drive-thru for coffee (Australian Bureau of Statistics, 2013).

Value Proposition Merlo’s Coffee Drive-thru is the most efficient option for consumers who have busy lifesyles and like to drink on-the-go. It is time effective and as Merlo has already established their brand reputation with coffee in the heart of Brisbane, it would be ideal to operate a drivethru in a surburban area for convenience of customers coming to work in the city from urban areas. Merlo is the better option for drinking fresher coffee on the go than existing competitors such as Gloria Jeans and Zarraffas as the busy lifestyle of 26 – 45 years working adults have because, Merlo is constantly brewing coffe in their Torrefaziones stores are they believe the freshest coffee is made right after roasting the beans. A survey conducted that by Nespresso revealed that coffee that leaves a a burnt and bitter taste for consumers, 50% will be angry, and also 47% saying they won’t go back ever to the café (Campbell, Compagoni. 2016). Coffee Beans left in day light, exposed to air can alter the taste in coffee

when used, hence, this is why Merlo has the advantage over their competitors by using freshly roasted beans.

IV. MARKETING TACTICS Product: As there is no existing product of Merlo’s that is going to be developed, product is going to focus mainly on the current brand identiy and how a drive-thru Merlo is going to affect the branding. The brand identity of Merlo is currently known as the coffee brand that always has freshly roasted beans ready for coffee, whether it be for making coffee or wholesaling to local cafes and restaurants working together with Merlo. Merlo is known for its quality Italian inspired coffee and its brand reputation is built soley on the cups of coffee. However, creating a drive-thru may change the brand identity. Drive-thrus are usually associated with fast-food, or goods which you can receive quickly without so much of the quality being there. This is a good chance for Merlo to increase the reputation for the drive-thru industry and maintain is quality of coffee even through a drive thru.

Price: For a Merlo Drive-thru, a penetration pricing strategy would be most effective and advantageous pricing strategy to implement. The current climate within the café industry has become oversaturated and currently has a high number of entrants, which has forced current industry leaders to find other alternatives to provide coffee to a new target market by creating drive thrus. Some of Merlo’s competitors such as Gloria Jeans are a step ahead of Merlo with a drive-thru, however, there are advantages to starting after as Merlo can benchmark itself against Gloria Jeans and see what they can improve, as there is a possibility to gain new customers from other competitors. (Setting a low price will increase traffic and thus increasing a number of cups per day. Gloria Jeans for their grand opening of their drivethru offered free hot chocolate from a certain time period as an incentive. For Merlo, to open in a surburban area, it would be new to most consumers, therefor the incentive should promote their values such as Free ‘Keep-Cups’ (environmentally friendly) and for their next return, they receive a free coffee of their choice. Penetration pricing seems only appropriate for Merlo as penetrating a new market (Drive Thrus), it is the most effective way to reach the marketing goal.

Place/Distribution: Like most new Merlo stores, they do their own coffee roasting. When setting up the store Merlo should add a ‘torrefazione’ meaning, Merlo Drive-thru would not only be able to sell coffee, but also their coffee beans. In terms of a point of purchase system, a traditional drive-in track would be efficient perfect. If Merlo were to embrace technology, Merlo could add an express lane in the drive thru with a touch screen, which allows customers to scan their loyalty card and choose their favourite orders from the past and pay at the station before picking up their drink, this will reduce the ordering time. In terms of intensity of market coverage, Merlo should keep in exclusive, by only opening in 1 store in a suburban area to see the progress and outcome of the Drive-thru.

Promotion OBJECTIVE Creating awareness of DriveThru

TASK Radio Marketing  5 weeks Social Media  e.g. Facebook Event

MEDIA COST Radio Marketing $3200 per week: 5 weeks = $16000 Social Media:  Facebook event: 2 months ahead = $0  Twitter Announcement: $0  Youtube Ads  60cents per ad (Low level youtuber):

Maintain and/or increase sales from a month after opening and off-peak hours

Loyalty Program  Merlo Friend: e.g. eclusive deals. Off-peak hour deals

Loyalty Program deals: Buy one get 1 for free for a friend (voucher)  exposure to more customers

Promotion for the drive-thru can mainly be done through social media. Competitors Gloria Jeans made a facebook event and added an incentive to consumers who shared their event. Consumers would receive a free small drink inside the café not in the drive thru. This led to consumers sharing the event which increased the events exposure. Making a facebook event is not costly and can save money and time instead of having to do physical promotion such as flyers and posters. V. REFERENCES

Abs.gov.au. (2017). 4102.0 – Australian Social Trends, July 2013. [online] Available at: http://www.abs.gov.au/AUSSTATS/[email protected]/Lookup/4102.0Main+Features40July+2013 [Accessed 18 May 2017]. Merlo Coffee. (2017). About Australia’s Favourite Coffee Roasters | Merlo Coffee. [online] Available at: https://www.merlo.com.au/about/#column-features [Accessed 18 May 2017]. Ausfoodnews.com.au. (2017). Average Australian coffee consumption drops, but café visits continue to grow, research | Australian Food News. [online] Available at: http://www.ausfoodnews.com.au/2014/03/12/average-australian-coffee-consumption-dropsbut-café-visits-continue-to-grow-research.html [Accessed 18 May 2017]. Campbell, L. and Compagoni, T. (2017). Australians Love Coffee. We Have Proof. [online] Huffington Post Australia. Available at: http://www.huffingtonpost.com.au/2015/08/26/ustralians-love-coffee_n_8029268.html  [Accessed 18 May 2017]. IBISworld (2017). Cafes and Coffee Shops in Australia. IBISworld. IBISworld (2017). Tea and Coffee Manufacturing in Australia. IBISWorld, pp.4,5,10. Snowdon, T. (2017). Brisbane has best coffee in Australia. [online] Couriermail.com.au. Available at: http://www.couriermail.com.au/lifestyle/food/merlo-voted-the-best-coffee-inaustralia-for-second-time/news-story/8750dceed43f42eeab756a41a6a67c4c?from=public_rss [Accessed 18 May 2017].

VI. APPENDICES Appendix 1: Strengths  Established coffee brand in Brisbane, QLD  Strong customer base in QLD  Industry experience for more than 20 years – since 1992  Voted as Australia’s favourite coffee for two consecutive years  Wholesaler – supplies Merlo Coffee to local smaller cafes, also provides training for baristas to make Merlo Coffee  Strong sense of community  Charity; ‘The Common Goods. Charity event Cycle of Giving raised over $200,000.

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SWOT Analysis Opportunities  Grow a strong customer base interstate   stronger brand reputation interstate  Expand and strengthen current  relationships with local cafes and community  sponsorships and wholesales.

Weaknesses Dominated in NSW and VIC by other cafés due to larger market and higher number of competitors Not Embracing the technology driven society like other competitors Loyalty Card  Purpose is ruined as ‘walk-in’ consumers can win a drink by participating in ‘flip for free’. Ruins exclusive feel to the loyalty program. Heavily dependent on Brisbane (has the most stores)

Threats Oversaturated market industry  Peak of maturity Numerous bigger local competitors in Brisbane: Zarraffas, Gloria Jeans, Starbucks and Coffee Club

Appendix 2: Culture

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Growing Coffee Culture (two types, traditional and hip) Health & Environment Conscious

Demographic

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Adults (working)  24 – 45 years Late teens – early adult  18 – 23

Social

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The aging population means that there is a market that is willing to sit in a coffee store, wait for the coffee, whilst experiencing and embracing the coffee stores utilities. However, generational shifts in attitudes towards the coffee culture has become more ‘hip’ towards the younger demographic, and have preferred to take the coffee on the go whilst doing other tasks. in a society that is fast paced, it has led to consumers embracing numerous methods in order to achieve convenience for their purchase goods. Food delivery services such as uberEATS, Deliveroo, and Foodora started as a small niche market for convenience of food deliveries to consumers. o This trend in convience and ‘receiving’ your goods on the go has led to a spike in purchases that utilize technology driven services. An example is BOOST Juice App allows customers to order their drinks and pay for the good all within the app before customers even arrive in store. All customers need to do is pick up the drink.

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Technological

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Rising number of mobile purchases Increasing availability of coffee machines for home use App’s on smartphones for delivery and pre-purchase methods

Economic

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Growing middle class (domestic/nationwide) Declining umemployement rates  baristas, partnerships with local communities

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Laws and regulations Raw materials for drinks

Political

wholesaling,...