Coffitoff Online Coffee Business - Essay Example

Coffitoff Online Coffee Business Proposal Contents Contents 2 Product 4 Market Analysis 4 Pest Analysis 4 Political 4 Economical 4 Social 5 Technological 5 Target market 5 Competitor’s analysis 5 Porter’s five forces 5 Unique Selling Proposition 6 Marketing Plan 7 Marketing Mix 7 Product 7 Price 7 Place 7 Promotion 7 Distribution strategy 7 Pricing strategy 8 Promotional strategy 8 Conclusion 8 Recommendation 8 Short term 8 Long term 9 List of References 10 Business Proposal Product Description “Coffitoff” is the name of the coffee product that is going to be sold online to its customers all over the UK. The online business store will aim to sell coffee to people especially business professionals that do not have time to stop by at a coffee shop before heading for work. It will be very simple to order coffee from Coffitoff. When an employee gets to the office, school or where ever he works he will just need a computer or smartphone to get on the website and order coffee that will be delivered within 10 minutes maximum. As it is a service provided to the final customers it belongs to the tertiary sector. The aim is to provide coffee services. Coffitoff will start its online business from England mainly London and then at later stage expand its market to other parts of the UK. London is the business hub of the UK and it is there where the product will be tested. The business will be started as a sole proprietor and if need arises it will go public to attain funds. Market Analysis Pest Analysis Political The coffee beans are exported from other countries. This increases the cost of the coffee in the UK as compared to the American or Asian countries (Casenotes, 2004). Coffee is not easily affordable in the UK. Economical The global recession that took place in 2008 has made consumers very careful of how they spend their money. Coffee is regarded by many as a product of surplus need rather than an immediate one. People in the UK can go without drinking it (Ireland, 2009). Consumers look to save every penny in these harsh economic times. Social Coffee is consumed in the UK as a drink that relaxes the mind especially before the day has begun. It is preferred over tea in most parts of the UK (Hashemi, 2002). Technological As newer coffee machines are coming into the market it is becoming easier for people to purchase and keep these machines in their home. It is cheaper to make coffee at home rather than ordering online (Hashemi, 2002). Target market The target market for Coffitoff comprises of business professionals who find it hard to stop by a coffee shop for a cup of coffee. Recent research shows that 60% of all business executives would like to have a cup of coffee at least once a day in London (Richardson, 2014). Out of the 60% only about 18% of the professionals make it to the coffee shops. This means that 42% of the people are deprived of this need as they do not have time for coffee. Coffitoff will look to cater this segment of people (Richardson, 2014). Competitor’s analysis There are quite a few competitors for Coffitoff in the market. Among the popular ones is Square mile, Roasters and Nude Espresso (Robertson, 2010). Porter’s five forces 1. Rivalry: Online business is still very new and is growing. At the moment, there are over a dozen online coffee shops in the UK. Brand identification is very important to maintain the rivalry and market position between coffee shops (Pride, 2008). 2. Threat of substitutes: The threat of substitutes is high as coffee is not regarded as something that is mandatory to consume. Tea, soda and other drinks are also available online that makes switching of customers easy and costless (Pride, 2008). 3. Buyer power: The buyer power is high because there is no shortage of companies and buyers. There are a lot of options to consider thus the switching cost is low (Pride, 2008). 4. Supplier power: There are lots of suppliers thus they do not dictate their own terms in the market. The supplier’s power is low (Pride, 2008). 5. Barriers to entry: There are no policies from the government that restricts a retailer from entering the market. Investment is also low encouraging more retailers to open online coffee stores (Pride, 2008). Unique Selling Proposition The unique selling proposition for Coffitoff is that it would be able to provide coffee to its customers within 10 minutes after the order has been placed. If the store is unable to do so then it would give away free coffee to the customer. This will be a great advantage for Coffitoff over its competitors. Most of the competitors promise to deliver within 20 minutes but when Coffitoff will claim to deliver in 10 minutes then the customers will feel that their urge to drink coffee will be met sooner if they order for Coffitoff. It is not very hard to achieve this goal and students who could ride cycles would be encouraged to work for the store. Only more riders are required to fulfill this vision of the company (Ireland, 2009). Marketing Plan Marketing Mix Product Coffitoff will never look to compromise on the quality of the product. It aims to deliver the best to the customers in order to win their trustand loyalty. The company will launch with five flavors and depending upon the taste of the customers will soon launch 5 more. It will look to see the taste of their customers and launch different coffee products each year. Price Coffitoff will look to apply a price penetration strategy. The times are hard on people with an average income in the UK and Coffitoff will look to keep the prices low so that most of the customers can afford the coffee and turn to it again. Place The Company will need to have a physical existence in different parts of the city. As it aims to deliver within 10 minutes it must be situated where it can easily get the order to its customers in time. It could be a little costly at first, but later this USP could bring in great profit for the company. Promotion The Company will look to promote its products through social media websites rather than television or newspaper. Distribution strategy The company will look to find cheaper sites to set up and run their coffee retail business. In these sites, they will make coffee and deliver them to the customers. The company will have a place in every 10 to 15 kilometers of the business area in London. Pricing strategy The company will look to capture at least 3% of the online coffee market with a price penetration strategy. The prices will be kept lower than the competition so that it becomes easy and affordable for the customers to order their coffee. The mission of the company is to maintain its business standing in the market by achieving loyal customers. Promotional strategy Social media websites like Facebook and Twitter are cheaper plus more popular with the target market of the company (Close, 2012). This is the reason why the company will use this form of a strategy to market its products. Conclusion Based on the culture and habit of the people in the UK, it is fair to say that there is great potential on online coffee retail business. People in the UK do not just drink coffee because of the fine taste, but they drink coffee to soothe themselves. It gives them great pleasure to drink coffee before their day starts and in the middle of the day when the work load is heavy. It has a psychological effect on people that makes them feel relieved and energetic once they have their daily dose of coffee. Seeing this trend it is fair to assume that the business could pick up pace once it gets popular with the people. Recommendation Short term Customers must realize the importance of Coffitoff coffee. It is a daily dose of energy for the business professionals and induce their behavior to take it in order to get their work done in time effectively. The short term goal is to associate Coffitoff with energy so that business professionals are tempted to consume it. Long term The long term goal is to expand Coffitoff in the whole of the UK associating the brand with energy. There has to be a reason for people to have coffee unless it becomes a habit. The reason is that it gives them strength and the ability to carry their diurnal work. The taste of the product is very important because marketing efforts will be made to associate a product with energy but the taste of the coffee must be appealing for customers to get that dose of energy repeatedly. List of References Casenotes, 2004. Business Organizations/corporations, Keyed to Choper, Coffee & Gilson. Sixth ed. New York: Aspen Publishers. Close, A., 2012. Online Consumer Behavior: Theory and Research in Social Media, Advertising. Routledge : New York . Hashemi, S., 2002. Anyone Can Do It: Building Coffee Republic from Our Kitchen Table. Chichester: John Wiley & Sons. Ireland, R. D., 2009. Understanding Business Strategy: Concepts and Cases. Mason: Cengage Learning . Pride, W., 2008. Foundations of Business. Mason : Cengage Learning . Richardson, J., 2014. The Coffee Boys Step-by-Step Guide to Setting Up and Managing Your Own. London: Constable & Robinson. Robertson, C., 2010. The Little Book of Coffee Law. Chicago: American Bar Association. Read More