Bsbmkg 501 Assessment TASK 2 ICM0788 PDF

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BSBMKG501 - Identify and evaluate marketing opportunities

Assessment 2 – Case Study MARKETING OPPORTUNITIES

Anirbit Ghosh ICM0788 International College of Melbourne

Executive Summary: Coffeeville was founded by partners Emma and Rufus Belcastran. Based on skill and knowledge Emma Belcastran would lead marketing activities such as promotions while Rufus would manage marketing research and liaise with stakeholders where required. About Coffeeville ● Location: Central Business District, Melbourne ● Design: Modern, bright and functional architecture ● Seating Capacity: 15 customers ● Types of transactions: 70% take away; 15% sit down; 15% catering Coffeeville is currently in its third year of business. The location and positioning of the cafe is a key reason for business to be well received by the Melbourne consumer market. The business plans to continue using effective marketing for profitability and future success. The business claims to provide a unique cafe experience for aware Melbourne coffee drinkers. Coffeeville is well known for ● High quality and fair trade ● Superior hot and cold gourmet food and beverages ● Fast and friendly service ● Consistently high level of expertise and knowledge

The business targets to have established itself as a premier cafe in Melbourne for gourmet coffee and food for an ethically and socially aware Melbourne coffee drinker.The goal is to expand the business in a number of key spots across Melbourne CBD. Coffeeville targets to achieve the business objectives and vision by implementing several key strategic directions: ● Improve revenue by target marketing campaigns ● Manage direct and indirect operational costs BSBMKG501_Assessment 2_ICM0788 2

● Deliver high quality product and service standards. ● Brand Coffeeville as an environmentally and ethically responsible company. ● Maintain highly trained and motivated employees

The marketing plan is drafted to ensure that marketing activities are aligned with business’s strategic directions to accomplish organisational mission, values and vision. The marketing opportunities report comprises of : ● Identifying two key marketing opportunities and evaluating them by consulting with various stakeholders ● Analysed the SWOT analysis of Coffeeville and identified the threats due to external factors. ● Evaluated the changes that need to be incorporated for the identified marketing opportunities to work using the PEST analysis. ● Finally the two marketing opportunities are ranked and viability and contribution towards the business is measured.

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Market Overview: Coffee and cafes have been a trend in the market currently. Although coffee was not a popular beverage for all ages, the popularity of drinking coffee and visiting cafes grew with the rise of coffeehouse chains like Starbucks, Costa Coffee, Figaro etc. Overtime coffee shops have become a place to relax and do your stuff while enjoying their cup of coffee.

“Coffeeville”, is a coffee joint which was formed by partners Emma and Rufus Belcastran. The coffee shop is currently under the third year of its business operation and the business aims to establish itself in the competitive world of brewing industry by expanding the local consumer market. Marketing is one of the key factors which plays a pivotal role in the company’s future growth and profitability in the next few years. The marketing opportunities report strives to detail the marketing approach that needs to be undertaken by Coffeeville. Coffeeville has authentic data available about the market trends in the past two years of operation and has a vast knowledge about the common aspects of our customers. Data has been collected from ● Melbourne Chamber of Commerce Reports ● Marketing research undertaken by Coffeeville on targeted customer groups such as data sourced from website traffic, social media monitoring, surveys and pointof-sale etc. ● Marketing research conducted by a private company (Action Marketing).

Market Analysis: The coffee shop’s customer base consists of following demographic, geographic and behavioral aspects. ● Overview of the Central Business District, Melbourne ○ Large numbers of office and corporate workers (90% of daytime business) ○ Area population growing at 8% per year. ● Demographics ○ Age group 20-60, which 85% of the total customer base. BSBMKG501_Assessment 2_ICM0788 4

○ Full-time employment ○ An income over $30,000. ● Geographic ○ The total population of the area is estimated to be at 40,000. ○ The main aim is to reach customers within the 1 kilometer of the shop. ● Behavioral Factor ○ Tend to consume lunch mostly from out during the weekdays. ○ Prefers cafes with fast and prompt service. ○ Enjoy a high quality locally sourced gourmet meal. ○ Value the use of high grade food products. ○ Support ethical and sustainable methods.

Market Needs: The coffee shop aims to brew high quality coffee and surpass its competitors in the area. The current trend for coffee shops is to attract consumers with high quality, locally made, fresh and innovative cafe products. Coffeeville strives to go 100% Australian with use of local produce, homemade sauces, organic vegetables, meat and cheese. Customers also expect effective service and socially responsible business. ● Selection: Customers are allowed to choose their heat and serve options. ● Accessibility: The shop extends to a street level premise with wheelchair and pet access. Wait time is minimum due to the availability of easy access to the coffee shop. ● Customer service: The customers are generally overwhelmed with the speed of service and customer handling. ● Competitive Pricing: HIgh quality food products will be used and priced relatively lower when compared to its competitors. ● Ethical and environmentally responsible business practices: The coffee beans used by the cafe are fair trade certified and its logo is used widely to build awareness among customers about the business practices. The food products are grown in Australian and labelled according to building a sense bond with the

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local community. Advertisement is done electronically or printed on recyclable material.

Market Trends: The modern day market trend of the coffee shop industry is required to cater to a socially and environmentally aware consumer. Coffee shops need to alter or regulate their menu in order to satisfy the growing customer sophistication. ● Coffee and food quality: Its premier to serve consumers with quality ingredients and possess a wide variety of options to choose in regards to coffee, pastry, etc. Customers with a bad customer experience are more likely to create a negative impact on their peers. ● Health Awareness: Consumers tend to choose products that improve health and support the active lifestyle. Wide variety of choice in regards to ingredients like lactose free, gluten free, vegan and vegetarian. ● Speed: With increased customer numbers in the daytime, it becomes difficult during lunch hours to handle large numbers of orders and customers appreciate fast service. ● Ethical practices: Following ethical codes and practices creates credibility towards customers. ● Access to information: Availability of information regarding promotions, services, practices and policies through internet and social media platforms for all patrons. ● Use of wide media such as newspaper, television and radio: These create a mark on consumers with a sense of personalisation, customisation and immediacy.

Market Growth: Melbourne has always had a reputation for good coffee shops and sophisticated coffee consumers. The level of sophistication among coffee drinkers have grown over the recent years. Coffeeville has seen a growing increase in customers over the last two

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years with the growing population. There is generally a high foot traffic of customers during the lunch time as time-poor consumers generally prefer takeaway or dine-in.

Target Segments: The market for Coffeeville has been categorised into three segments ● Individual takeaway: According to a market analysis conducted by Action Marketing, the estimated total size of the customer market is 18,000-25,000. The market is growing by 4% each year and trends highlight the demand for high quality food products and increased awareness about social/environmental issues among customers within the CBD area of Melbourne. The profile of the customer within this market segment is ○ Between the age of 20 to 60 years. ○ Regular commuters by public and private transport ○ Clerk, professional or student ○ Income in the range of $40,000 a year. ○ Considers higher price as the indicator to fresh and quality food. ○ Moderately sensitive about price and peer recommendations ○ Strive to be environmentally and socially responsible. ○ Technologically adapt and use the internet or social media effectively. ○ Working within 1 kilometer of the cafe. ● Individual sit-down: After the market search conducted by Action Marketing, the total size of this segment stretches from 7,000 to 9,000. The market segment has been growing 5% each year and like the takeaway market, consumers are increasing growing awareness of social and environmental problems and demand for quality food within the area population. A typical customer profile under this segment is: ○ Age ranging between 35-60 years. ○ Daily commuters ○ Potential tourists and management professional ○ Sensitive to peer influences. ○ Understand the use of the internet and social media. BSBMKG501_Assessment 2_ICM0788 7

○ Eager to impress coworkers about food quality, ingredients and service. ○ Income in the range of $60,000 a year. ○ Strive to be environmentally and socially responsible. ○ Working in offices/businesses within 1 kilometer of the cafe. ● Groups (Organisation and Business Catering): There are approx. 700 businesses located within the area of Coffeeville according to reports produced by Action Marketing. The target businesses of Coffeeville are likely to remain consistent. ○ Age ranging between 35-60 years. ○ Daily commuters ○ Management professional, clerk ○ Arranged during training, workshops, business meetings or award functions ○ Sensitive to peer influences. ○ Understand the use of the internet and social media. ○ Eager to impress coworkers about food quality, ingredients and service. ○ Income in the range of $60,000 a year. ○ Organisations strive to be environmentally and socially responsible. ○ Working in offices/businesses within 1 kilometer of the cafe.

Customer Management: Coffeeville will interact with consumers through direct electronic mails and social media posts. The cafe would recommend consumers to provide feedback electronically via mail and social media to highlight the positive responses in relation to the marketing campaign. The coffee and food joint will incorporate strict food quality codes and standards and publish the same on employee handbooks.

SWOT Analysis:

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The key strengths of the business have been analysed and the weakness, opportunities and threats are captured in regards to current organisational goals. Strengths ● Prime location ● Great customer loyalty ● Coffee and food products exceed the quality of competitors products. ● Highly skilled barista and food preparation staff. Weaknesses ● The budget for marketing is restricted. ● Shortage of counters to serve customers. ● High cost of sales involved in providing organic food products and coffee. Opportunities ● Create own brand - Franchising and market expansion ● Sell Products through e-commerce ● Extend business hours Threats ● Rivalry of local cafes and food providers. ● Unpredictability of global coffee supplies ● Population shifts in case of redevelopment of streets or buildings

Marketing Opportunities: ● Create own brand - Franchising and market expansion: Coffeeville should establish itself as a 100% Australian sourced business as according to surveys it was evaluated that consumers cared about the origin of the food source and would like to consume Australian made products. This will steadily decrease the cost of sales as the coffee is generally imported internationally. Expansion of the business is highly likely if Coffeeville starts producing all its food products to serve high grade cafe products. ● Sell products online: The business should target expanding customer reach and number by accepting online orders by signing up with food delivery service providers within the range of 2 kilometers from the cafe. Customers who are not BSBMKG501_Assessment 2_ICM0788 9

able to visit the cafe daily would be able to order. Customers are more than willing to purchase food and coffee online. Social media marketing campaigns would allow targeting specific market segments based on online traffic. Customers are also generally willing to pay for the added delivery cost. It is always important to create brand recognition and develop potential consumers.

Competitors Overview: Competit

Establishe

or Zelda's

d Date 2000

Focaccia Buzz

Size

Values to

Strengths

Weaknesses

Sandwiches are made with excellent fillings. Great food with great prices. Additionally has a permit to serve liquor. Ofers shoppers greatest choice, permitting the client to collect their focaccias as they wish. Fresh salad and healthy items to eat

Has fewer options for cofee. No reasonable exchange. No green strategic policies.

Quick and great service

Cofee quality is bad No reasonable exchange. No green strategic policies. Cofee quality is bad

10 staf

Customers Lots of food options in the noon

2002

15 staf

Alternate food options

Subway

2007

7 staf

7- Eleven

2008

10 staf

Consistent fast and healthy food Service and fast low-priced food

Cofee Mia

2008

15 staf

Good food at good price

Great espresso and cake at a lower value.

Mc Donald's McCafe Café Verdi

2008

20 staf

Relatively fast and low price

2009

15 staf

Sushi Mi

2010

10 staf

Low priced fast food and great service Comfortable ofers, sensible cost Fast, healthy, low priced food

Food quality is normal. No reasonable exchange. No green strategic policies. Cofee quality is bad

Medium-price for service is bad pre-prepared pasta and fried items Good options in the No reasonable menu, healthy food exchange. No

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items, fresh salad

green strategic policies. Cofee quality is bad

PEST Analysis: Economic environment- The Australian economy has remained cautiously optimistic even during the global fallout from the GFC. The unemployment rate promises to stay under 5% and the economic growth ranges from 2-3%. Coffeeville provides a low cost of luxury in these unprecedented economic times. Consumers are more likely to spend a gourmet breakfast or lunch than spending heavily on cars, TVs etc. With added delivery options through e-commerce websites, the business expects to see a rise in volume of sales or digital traffic. Political environment- Legislation may include ● Food safety ● Industrial Relations Law ● Banking Implications after GFC ● Packaging and labelling laws ● Health and safety ● Environmental laws ● Apprenticeship and funding The last three mentioned codes are key to Coffeeville’s marketing and business activities. Ethical business practices have come on people’s political radar. Coffeeville displays responsible approach towards business by adhering to the stringent packaging laws. The environmental legislation practically allows Coffeeville to promote a low impact method to marketing. Social Environment- Consumers are aware of various working conditions in countries globally and increasingly want to devote their purchase of service linked to better social and economic conditions. Consumers also associate themselves to conserving the environment and Coffeeville will market them as socially and environmentally BSBMKG501_Assessment 2_ICM0788 11

responsible and manage business operations accordingly. The idea is to create a value to the consumer and be the pioneers of social and environmental responsibility. Technological environment- the evolution of modern technology is quite rapid and it creates challenges and opportunities for marketing. The coffee shop will use social media and its website extensively to reach a greater target market.The option to deliver food and coffee would allow increased digital traffic and revenues. Sales and marketing objectives: The marketing activities of a company is linked with organisations mission, values and objectives. The vital strategic directions from the business plan are ● Improve revenue by target marketing campaigns ● Manage direct and indirect operational costs ● Deliver high quality product and service standards. ● Brand Coffeeville as an environmentally and ethically responsible company. ● Maintain highly trained and motivated employees Coffeeville’s marketing aims and functional strategies coincide with key strategic directions. ● To establish Coffeeville as a premier gourmet food joint with a superior coffee experience in the CBD, Melbourne. ● Grow the daily foot traffic from 225 to 275 customers. ● Improve brand recognition in order to increase brand visibility with a target of at least eight in ten people within 500 meters radius of the coffee shop that recognise the brand in online surveys conducted by Coffeeville or Action Marketing. ● Create a brand reputation that establishes goodwill within the target market and seven out of ten people vote Coffeeville as an environmentally responsible business.

Marketing Mix: Through an integrated mix of marketing strategy, Coffeeville will try to build customer awareness regarding the value of the business related to the target markets. Coffeeville’s marketing mix is comprised of the following methods BSBMKG501_Assessment 2_ICM0788 12

Pricing- The menu is priced slightly higher than its competitors. The higher pricing gives out a message about higher quality which is intended to increase revenues. ● Breakfast Option: $7-$9 ● Focaccias: $10-$11 ● Pastries, muffins, cakes: $5-$7 ● Coffee, tea and hot chocolate: $4-$5 ● Milk shakes and iced coffees: $5-$7 ● Bottled Drink: $4-$5 Place- To appeal to sit down customers, the shop needs to be neat, operational and stylish. 70% of the business revenues are expected from the takeaway customer segment in order to free up the customer queues and increase the speed of service. Catering services to be arranged as per consumer requirements in line with market positioning as a special service. Promotion- The main idea that Coffeeville will want to communicate with existing and new consumers is that they offer superior customer experience apart from the product, service values and an environment that attract the target market. ● Advertisement in local magazines/gazettes: A common attribute of all targeted market segments is that they commute on a regular basis. CoffeeVille will therefore place regular advertising in local magazines deemed to have a high number of commuters/other segment attributes. ● Encouraging articles and reviews in local magazines: CoffeeVille will attempt to get articles and reviews in mX. These can include information on coffee plantations, ethical coffee practices, etc. CoffeeVille will regularly provide mX with press releases to encourage use of our content. In addition, CoffeeVille will invite people from mX for lunch to discuss the business in order to raise awareness among writers. Such tactics have proved successful...