Guerrilla Marketing Strategy - Case Study Example

Financial Plan Considering the overall nature of the business and fresh start, there is an acute need to grow and expand. This financial plan will actually set up the overall financial requirements for the coffee shop, following financial plan is outlined: Overall financing In opening up the business, a total of $11,000 will be required out of which 60% i.e $6. 600/-will be financed through external financing whereas the rest of the money will be contributed by the owners of the business. The overall ratio of 60:40 has been maintained in order to ensure that both the owners and VCs/angel investors contribute to the business to set up strong growth path for the firm. The overall financial plan is attached as an appendix in the attached excel sheet. It is critical to note 40% of the financing will be either borrowed or will be obtained through venture capital financing. Guerrilla Marketing Strategy Guerrilla marketing strategy involves the use of unconventional and low cost advertising strategy to promote the business. Such strategy is often used locally and through an organized network which actually promotes the business and advances it in relatively unconventional manner. (Levinson, 2003) This marketing plan is related with the marketing of the new coffee shop and is based upon offering a critical strategic outlook and insight into the overall marketing efforts to be taken. The overall product range will not be limited to the freshly served coffee only but will also include selling merchandize such as caps, t-shirts and other items thus increasing the overall products to sell. Since Hot and Sweet Café’ positions itself as an organization for all, who prefers hot and cold beverages. The customer profile of ‘Hot and Sweet Café’ ranges between an age-group of 15- 45 years. Considering this, the overall goals to be achieved by executing this strategy include: 1. Increase overall word of mouth about the business. 2. Increase local awareness of the brand by at least 25%. 3. Increase local sales by 10%. It is critical to note that the owners of the business are assuming that the overall access to finances will be restricted at the early stages. In order to overcome this, it is therefore important to initiate and set up a marketing campaign which can deliver results without incurring much of the cost. In order to promote the new coffee business, following marketing strategy will be applied: 1. In order to expand the business, marketing buzz will be created for the café at local level. An undercover marketing campaign will be started to create the opportunities for interaction between the consumers and the business to increase the overall exposure of the product. The overall marketing buzz will be created through word of mouth as well as through the viral marketing on social media. 2. Viral marketing will be started with specific targeting on the local consumers in the area. With the help of the online marketing platforms such as facebook and Google ads, a local campaign will be started to attract the local customers. Local website will be created and handouts will be dropped into the homes to actually encourage users to login to the website and increase sign ups. 3. Flyposting will also be used to actually attract the attention of our local customers. Strategically, fliers will be posted and distributed at places which are visible to the customers and can attract their attention. Fliers will be includes with a call to action along with the map/directions for the café. (Levinson, 2007) The above strategy will be executed in phases wherein initially flyposting will be used to create awareness about the brand and the store. Flyposting will be done on extensive basis involving the locals in spreading the overall word of mouth about the business. It is also critical to note that flyposting will be based upon localizing our contents therefore the initial emphasis will be on exploiting the local sentiments and buying behaviors rather than addressing a larger and wider base of customer demographics to target. The initial campaign will be limited and hyperlocal in nature. Appropriate Location The second store will be opened at 5801 South Dale Mabry Tampa, Florida 33611 which is a retail strip center with its own frontage and have its own drive thru capability also. The site is relatively accessible to the local residential areas and is situated at an area which is wider and easily accessible to all. Connected with roads, the site not only allows access to the local customer base but can an also serve as a brief stopover for those who are driving. While choosing the location of the second shop, important factors have been taken into consideration. One of the key factors is the visibility as it is important for a coffee shop to have a location at a place which is visible and easily approachable. The area around South Dale Mabry is visible and well connected with the roads. Ease of access has also taken into consideration however, while taking this factor, it has been outlined that the location is easily approachable to the local surrounding area as well as for the commuters who can stop for a cup of tea. This therefore suggests that the location targets both the residential customers as well as the customers who can occasionally come into the shop for this. Plan for Securing Debt Financing for Second Store The new store will be established closer to a major thorough fare and as such is expected to attract more customers. In order to serve a larger base of customers and to further expand, the new store will therefore serve as one of the important steps towards achieving the desired level of expansion. It is also important to note that initial capital will be secured through either the venture capital or the angel investors therefore once that is secured, it will be relatively easier for the business to actually secure the debt for the second store. Further, a comprehensive presentation will be made presenting the actual figures for the sales in the first store along with the projections will be presented to the bank. In order to secure the debt financing for the store, the owner will approach the Bank and will apply in the personal capacity to apply for the loan. Considering the small business nature of the business and the lack of any physical collateral for the business to secure financing, initial debt financing will be for small business loan backed up by the personal guarantee of the owner and the overall credit rating of the borrower. Since the overall cost to set up is relatively low therefore it is expected that the financing will be easily available. A debt up to 90% of the total cost to start the new store will be taken through the debt whereas efforts will be made to secure the debt at prime rate. An estimated rate of 2% to 3% is assumed to be costing the business in terms of the overall interest rates to be charged. Apart from the personal guarantee, business is also willing to offer a charge on the sales proceeds of the firm to further secure the debt in case the debt is not being arranged on the basis of the personal guarantee of the owners. Bibliography Guerrilla Marketing for Free: Dozens of No-Cost Tactics to Promote Your Business and Energize Your Profits2003New YorkHoughton Mifflin Harcourt Guerrilla Marketing, 4th edition: Easy and Inexpensive Strategies for Making Big Profits from Your SmallBusiness2007New YorkHoughton Mifflin Harcourt Read More