Marketing Strategies of Java Cafe - Case Study Example

Marketing Strategies Mission: The Mission of Java Café is to sell coffee made from organic seeds and to promote an environmental friendly approach in its Café. Along with the coffee, Java Café will be selling healthy products to its customers with the understanding that fast food leads to negative health impacts on the consumers and shifting to healthier options would lead to a happier nation Marketing Objectives The marketing objective of our Java Café is: 1. Sell coffee and products to consumers at affordable prices while maintaining a good quality for the brand 2. Develop a position amongst the best three coffee shops within the Denver local area in one year where competition may be high but demand is also high; 3. Use coffee as the main product with other healthy products acting as a go-between 4. Develop a perception of a socially responsible café brand 5. Integrate the service and the product together so that customer experience is improved. Financial Objectives: The financial objective of our Java Café is: 1. Earn a 15% growth annually; 2. Developing financial sustainability within one year; 3. Return on investment should be managed by Java Café within the next two years; 4. Add 10% value to the business annually Target Marketing: Through Java Café we aim to target to a wide customer base that includes customers between the ages of 18-65. Java Café will cater to all those people who want to enjoy a cup of coffee that is not priced too high and also allows them to enjoy a quality cup of coffee. Our Java Café would be focusing on customers who are environmentally conscious of their actions. While coffee is enjoyed by people of all ages, it is important to develop a primary target market so that we are able to develop a marketing strategy targeted towards this specific market. Our primary target market includes: Students: Students form a big part of the target market for Java Café. The Auraria Campus located in downtown Denver accommodates more than 40,000 students and thus could be a good potential market for our Java Café. Students have a hectic daily routine from pressures of work as well as having to survive on limited budget. Most students cannot afford coffee machines for themselves and rely on coffee shops for their daily cups of coffee. However, since they are on a limited budget, they cannot afford to buy from Starbuck or Mc Café, and thus they look for cheaper options that do not compromise on the quality of services. As our Java Café offers Wi-Fi, it would be a further attraction for the students since this generation is addicted to the internet and travels with its personal gadgets such as cell phones, laptops etc. ‘For them, technology is not a thing to be considered. It is a way of life’1. Furthermore, students usually have a common hangout place where they can meet up with their friends and peers. In this case, word-of-mouth promotion can help improve sales for Java Café. Young Professionals: Young Professionals are another target market for Java Café. Young Professionals in Denver make up 64 percent of the total population and Denver has the highest number of college graduates. Professionals from surrounding counties also visit lower downtown during their pre-working, lunch time and after working hours. These college graduates and young professionals are also busy people trying to make a position in the corporate world. They usually visit the coffee shop to either fuel themselves for the day or to enjoy a cup of coffee after a hard day. For them making coffee at home is not an option during these time period due to time constraints on their busy schedule. Therefore, they opt for a cup of coffee from the local Café. Positioning: Java Café will be positioned as a quality coffee Café offering coffee and small meals. Our Java Café will not be positioned as an upscale café, in direct competition with Starbucks and McCafé. This is because these two coffee shops have branches all over the world and enjoy both exposure and economies of scale. However since we are opening on a limited budget, we cannot hope to compete with them directly. Instead our coffee shop would be positioned along with the local coffee shops operating in the Denver area. These include Metropolis Coffee, St. Mark’s Coffeehouse and Ink Coffee. We have to understand that these local coffee shops have been operating in the area for quite some time and have developed a brand identity. Therefore in order to position ourselves amongst these coffee shops, we need to offer more value to the customers to that they switch over to Java Café. This refers to the competitive advantage provided by Java Café in comparison with the rest of the competitors. Competitive advantage may be defined as a ‘condition that enables companies to operate in a more efficient or a higher quality manner than the companies it competes with, which results in financial benefit ‘2. The competitive advantage that Java Café enjoys is that is offers a healthy menu for mini meals along with a quality cup of coffee in a good setting equipped with Wi-fi. In terms of its positioning amongst the customers, our café would be positioned as a upbeat coffee house that caters to the local needs of the customers by providing a friendly service to its customers in a setting where they can meet up with their friends and colleagues to enjoy a good cup of coffee. Strategy Pyramids: The Strategic aim of Java Café is to develop a strong brand identity in the minds of its target customers. Most customers visit their favorite coffee shops and do not like to switch between brands in the ordinary circumstances. The tactic adopted to promote this strategy is to offer good quality coffee that is made from the best quality coffee beans. With recession in the economy, most customers are looking for cheaper alternatives for their daily cup of coffee. For this reason, we would be offering good quality coffee with small meals at affordable prices. The quality and price of the product will bring customers back to the shop while they develop a rapport with the staff at our Java Café. Another tactic to bring back customers would be to encourage the staff to develop a relationship with the customers and value the loyal customers with a smile and a discount now and then. This would ensure that customers keep coming back as most customers prefer to visit a coffee shop that has become their own. In order to ensure that the tactic of developing ownership is successful, we would introduce different coffee flavors named after the popular spots, events or slang of the area. For example, one coffee flavor would be named the Buster coffee, after the Broncho Buster sculpture in Denver. Another program would be to hire staffs from the local area who already know the people in the area. This would help in developing a connection between the staff and the people. Also staff would be hired on a long term basis rather than temporary staff from the local colleges and universities. Marketing Mix: The Marketing Mix for Java Café would help us develop the unique selling proposition for the business. The USP for the business helps in creating a differentiation strategy for the business that would bring customers to experience a new kind of coffee shop. ‘The marketing mix is the combination of product, price, place and promotion for any business venture’3. The combination of these four elements helps in defining the differentiation strategy for our Java Café. Differentiation strategy is important to develop for Java Café since the market is saturated with both local players and big players that make competition high. Thus in order to survive, we need to offer something extra to the consumers in terms of the experience so that the consumers start preferring Java Café over other coffee shops. Product: The main product for Java Café is the coffee that we are offering. The meal serves to compliment the coffee and add revenue for the business. The coffee is meant to attract the consumers to our shop as consumers will also opt for something to go with the coffee. The coffee would be made special as coffee flavors would change to adopt the changing seasons and events. The service offered along with the coffee is also counted as the product for the company. This includes service of the staff that could be making the special cup of coffee for the consumers as they wake up with our cup of coffee or they relax after their tiring day with the cup of coffee. The Wi-Fi offered within the shop would also be counted as the service offered by our coffee. Pricing: Our coffee shop is not a premium coffee shop therefore we cannot charge high prices from the customers. Pricing of the meals and the coffee would be done keeping in view the prices offered by the local competition. These prices would be lower than that offered by premium coffee shops including Starbucks, McCafé and Dunkin Donuts. However, the price range would match the one offered by the three local coffee shops operating in the vicinity. In the beginning, the prices would be fiercely competitive in order to reroute customers to our café from the other coffee shops. Promotion: Since we are operating on a strict budget initially, we cannot hope to promote our coffee shop through big advertising and marketing. Promotion would thus be done through cost effective methods. We would rely basically of word-of-mouth publicity to attract a large share of the customer. But initial advertisement would require some investment. This would be put into advertising through social media such as Facebook and Twitter. Facebook marketing is done through both paid and unpaid methods. A group will be created on Facebook that would use tempting pictures of coffee and other meals offered at our café. Twitter would help manage the interest of the users towards our café. Both these social networks would develop communication with the consumers so that ownership for the brand is created among the consumers. The third form of promotion would be in-store promotion that would make use of the shop’s display and out-door board to promote coffee flavors and special offers. Place: The place for the coffee shop is the lower downtown Denver that is the favorite spot for both students and business professionals. It is expected that this place would be ideal for a coffee shop as statistics reveal that 110 million cups of coffee are consumed by the Denver people in one year. Also Denver is the 27th most populated state of United States and houses the greatest number of college graduates. Thus, this place is ideal for the target market that we are going to explore for Java Café. Services and Services Marketing: The services offered by our Java Café primarily include the availability of Wi-Fi in the shop. Wi-Fi would help attract the growing Generation Y in Denver and its vicinity. Generation Y is more attracted by the value they receive from purchasing a product. Thus when they would be buying a cup of coffee or enjoying their meal, they would benefit from the availability of Wi-Fi. The promotion of Wi-Fi would be done outside the shop on a wooden board that would be promoting the daily menu of Java Café. Once customers are aware that Java Café is offering Wi-Fi to its customers, the word-of-mouth would be good promotion for our café. The ambiance of the shop would also be an added service to the customers. While the customers are enjoying a cup of coffee, they would be relaxing in comfortable couches placed within the shop that would help ease out the tension the customers have after their tiring day. The comforting ambiance of the shop would pamper the customers so that they would come again and again. Even when they are passing by the shop, they would be tempted by the smell and the sight of the people enjoying their cup of coffee at Java Café. Service: The service offered to our consumers would be highly monitored. This is because every coffee shop depends on its loyal customers to not just generate sales but also to bring in new customers through word-of-mouth publicity. Therefore attention would be given to the service so that the staff is friendly towards the customers and corresponds with the frequent customers on a first name basis. With time, loyal customers would be given more benefits such as discounts, extra refill etc. Channels of Distribution: The channel of distribution in the case of our shop would be quite small. This would help in controlling the costs of the business. In order to gain beans for the coffee, we would be contacting Luna Beans who have direct channel of distribution with coffee farmers. The coffee would be sold to the consumers directly from the shop. In terms of other meals, we would be contacting local food suppliers in order to keep down costs for the business and ensure healthy meal options. Marketing Research: Marketing research is imperative before beginning up any new business. Market research will allow us to develop an edge over our competitors. It will allow us to understand the social, psychological and demographical knowledge about our target group of customers. Market research will help us review our entire marketing strategy in line with the needs and wants of customers. In this era of relationship marketing, it is imperative that we develop a relationship with our consumers since it not only helps bring in profit for the business but also helps the business grow according to future trends. Possible methods of marketing research include surveys, comment cards, focus groups etc4. Citations: 1. Sheahan, P. (2005). Generation Y: Surviving (and Thriving) with Generation Y at Work, Australia: Hardie Grant Publishing 2. Khosorowpour, M. (2007) Dictionary of Information Science and Technology, London: Idea Group Inc. 3. BBC (2012) The marketing mix, Retrieved from http://www.bbc.co.uk/schools/gcsebitesize/business/marketing/marketingmixrev1.shtml 4. McNamara, C. (n.d.) Critical Role of Market Research, Retrieved from http://managementhelp.org/marketing/market-research.htm Read More