Marketing Plan for the Writers Block Cafe at La Trobe University - Case Study Example

Executive summary This report has is the services marketing plan for the Writers’ Block Café at the La Trobe university. The university’s main customers include the students and lecturers interested in holding discussions over a cup of coffee or a meal given the Café’s location near the University’s library. The report first analyses the Café’s corporate marketing objectives before conducting a situation analysis and a market analysis for the café. A detailed environmental analysis for the café has also been conducted. The report then analysis the café’s customers with an aim of establishing their satisfaction level currently. I have conducted an audit of customer satisfaction using SERVQ model as attached. Through this, the report has established that the customers are not fully satisfied with the current operations as gaps have been established. Furthermore, the need to improve services in a bid to increase sales revenue has also been identified. As such, the report has recommended the establishment of a new marketing strategy for the café. Through the new strategy, new marketing segments have been identified for the café. In addition, the new marketing strategy involves improvement of the services and processes. It is therefore hoped that by introducing the new marketing strategy, the café will be more productive than before in terms of customer service and hence sales revenue which will lead to increased profitability. As such, it is hoped that the management will find it worthy to adopt the report for the purpose of improving the café’s performance. The appendix of the report contains the customer satisfaction survey that I have conducted which analysis my expectations regarding the services at the café vis a vis the reality or experience. The company’s corporate and marketing objectives Writer’s block café has the mission of providing a campus café for the students and stakeholders of La Trobe University and the neighborhood where they can find high quality meals and beverages. The café has the main aim of attracting and maintaining customers with its services exceeding expectations of its customers. The café also has the following marketing objectives; a) Developing brand awareness through steady growth in number of customers through offering of top high quality services (Sally, 2008). b) Development and increment of sales while achieving reduction in costs c) Development of awareness of the structured conversation system measured by customers coming to Writer’s Block Café. Situational analysis Writer’s Block café has been in operations for quite some time now. However, marketing remains essential to its success and hence future profitability given the high number of competitors in the surrounding environment. The café offers an ideal place where students as well as lecturers can meet in a confortable person-person meeting environment over a cup of coffee or a meal. This is the basic market need given that La Trobe University is a learning environment. Market analysis Over 85% of the café’s customers are students in the university with 5% being lecturers and the remaining 10% is made of the general public who visit or work in the university. The management is interested in growing the customer numbers in line with the university’s growth while making the café an ideal choice even for the visitors hence increasing their numbers by at least 50% in the next three years. SLEPT Factors analysis Social factors As stated above, the bulk of our customers are students and lecturers. This group is highly health conscious and hence the need for the café to observe high quality of service at all times. In addition, majority of the students depend on their guardians for finances, hence, the demand is highly influenced by price and hence the café prices its products in a way that everyone affords. Legal factors The café always ensures that it complies with all laws and regulations laid down by both the government and the local authorities regarding licensing, health and workers /customers safety in a bid to ensure continued and smooth operations for maximum profitability. Economic factors The café’s ability to grow is influenced by such economic factors as interest rates and accessibility of funds as well as inflation rates. In the Writer’s Block Café’s scenario, it has to always adopt a pricing policy that ensures that most of our target customers who are students can afford our services and products given that they do not have much finance. Political factors The café being a university’s café is highly influenced by government economic intervention in its operations. Such factors include tax policy, labor law, environmental law and political stability. In addition, the company’s policy is also influenced by the university policy and hence the cafe has to always operate in accordance to the university policy. Technological factors The café in keeping with taste of most young people who are majority of our customers has ensured that the café possesses state of the art equipment and technology. This serve to ensure that as many students as possible including lecturers deem the café as an ideal place for discussions and in the process they consume the café’s products and services hence increasing sales. SWOT ANALYSIS Strengths The café stands out from the rest as it competes with several neighborhood favorites and giants in the neighborhood. The café is famous for serving high quality beverages and meals at pocket friendly prices that range from as low as $2.2 to $10 which have distinctive ambiance. The café’s major strength is its location near the library where students and lecturers can hold discussions over a cup of coffee or a meal. In addition, the café is proud of having excellent staff that are highly trained and hence offer excellent service and high quality products to the customers. Weaknesses Our main weaknesses include our limited brand equity mainly owing to the café’s source of customers. The café also has a limited marketing budget with which to develop brand awareness. The fact that we cannot sell our products beyond certain prices limits our profitability and hence it’s a weakness to the café. Opportunities The university is rapidly growing which implies a growing market that has a significant percentage of the target market which is not yet aware of the café. There is also an opportunity for lowering variable costs through increased efficiency thereby increasing profitability. Our sales are also likely to increase as more and more people become increasingly aware of the café as an ideal place for holding a meeting or a discussion over a meal owing to increased marketing activity. Threats There are the threats of increased competition as more and more facilities are developed both inside and outside the university. In addition, bars and related facilities are a real threat. A slump in the economy which would decrease discretionally spending would mean a decrease in our sales and hence profitability. Customer analysis The café’s target market as described above is mainly the Latrobe University’s students and lecturers as well as other visitors who visit the university. Based on the age group, majority of the café’s customers are between 20 and 30 years which accounts for 80% of the customers who are mainly college students. The customers above 30 years mainly comprise of the workers and the lecturers as well as visitor visiting the university. Based on gender, females form the majority of customers at 52% with the rest being male. All the customers are interested in healthy and high quality offerings as well as high quality service. Therefore, the perceived risk regarding the service offered at the café is that the café may fail to attain the service standards expected. There is also a minor risk of food poisoning hence threatening the café’s reputation. In a bid to counter the risk, the café employs highly trained employees both in terms of food preparation and customer service. The café also ensures that it sources all its resources from supplies who observe high quality service. The café environment is also kept clean at all times. The service duration always ranges between 10 and 30 minutes depending on the kind of orders being placed. The high quality of service and the high food quality always ensure an emotional attachment between the consumer and the café. Furthermore, the provision of an environment favoring discussions as well as an open management where consumers are allowed to always air their view regarding quality enables the café to form formidable and long-lasting relationships with consumers as long as they remain in the university. Customers are served by highly trained waiters who promptly attend to any issues they might be having. However, self-service is also available but there are no boundaries between customers and those serving them and hence a visit at the café is always a memorable experience. However, it should be noted that successful service delivery in this industry does not require a high level of customer experience but it does require competence and effort so that a customer can have a personalized service. The service boundary is not spanning. However, the first experience of a customer in this industry is always important in ensuring repeat purchases hence the high quality service offered by Writer’s Block Café. Service product analysis The role of physical evidence In this industry, physical evidence is the environment in which the service is provided and delivered and in which the firm and the customer interest and any intangible commodities that facilitate performance or communication of the service. As such, it provides customers with tangible cues in evaluating the service before they can purchase it as well as in assessing their satisfaction with the service during and after consumption. For instance, Writer’s block café facilities and its surrounding environment serve to attract the customer making him belief that high level of service quality will be offered. In this regard, the customer is always willing to part with the price charged at the café through equating it with the physical evidence. The physical surrounding and also the physical facility where the service is produced delivered and consumed in its service scape. It has a role of creating mood, an attraction or a desire to visit and hence purchase the service. The location of the Writer’s block café near the library as well as the quality furniture, facilities and technology for instance create a repeated desire for the customers to visit and hence consume service. This is also aided by customer service and directions on how the service is to be delivered or accessed. The physical evidence can be used as a competitive advantage within this industry. People will always want to go to café’s that have high quality service scape as opposed to the ones that don’t. For instance, many students are attracted to the café owing to its location and physical appearance as well as how the service is packaged which is superior to other cafes around. This is the café’s competitive advantage over its competitors. However, the café needs to identify new areas of improvement in its service scape that can enhance its competitive advantage. For instance, acquiring new and high quality furniture will greatly enhance customer experience hence acting as a competitive advantage. The Writer’s Block café current pricing strategy The company uses economy pricing strategy by taking a very basic low cost approach to marketing in a bid to keep the prices low and hence attract the student segment of the market which is very price sensitive. As stated above, the company’s beverages and meals range from $2 to $10 which relatively when compared to its various competitors. This is in recognition to the fact that students are very much price sensitive owing to limited finances. Due to the need to attract them as they form the bulk of the market, the company deliberately adopts economy pricing. The company’s sustainable competitive advantage mainly lies in its location. It should be noted that the café is located next to the library which ensures that students visiting the library and who have the need to hold discussions in a conducive and ambient environment are afforded such a place in the Writer’s Block Café. The students as well as the lecturers can then hold their discussions or meeting s over a cup of coffee or a meal from the café hence enhancing the level of sales. In fact, this has been the factor driving up sales for the café for a long time. Current Promotional Strategies The Writer’s Block café uses a number of promotional strategies in a bid to make itself known by potential customers. The company maintains an active website where it describes itself as well as its offerings to the customers. The website is much appealing to the customer and is aimed at promoting the café to the customer who does not even know what the café offers. The website describes all the offerings of the café as well as a menu for breakfast and lunch together with their respective pricing. The website is designed in such an appealing manner that everyone visiting it would desire to sample the services offered by the café. The café also actively makes use of the social media in advertising its products to the potential customers. For instance, it maintains a Facebook page where all customers as well as potential customers can share on various issues. Through this platform, the café is promoted to both current and potential customers. The use of traditional media is also one of the channel through which the company markets itself. It is common for the company to use television to advertise and hence promote itself. This way, the cafes popularity continues to increase. The café also promotes itself in various publications within the university. For instance, it is common to find articles and promotions about the café in various magazines produced in the university. It is also worth noting that the company has also been using after sale services and discounts to promote itself. The café also uses various noticeboards within the university to promote itself while its location near the library also serves to promote it to anyone coming to the library. As such, it can be said that the company has succeeded as far as promotion is concerned. It is clear that the media used in promoting the café have largely been successful in covering as many people as possible. It is however worth noting that there is numerous cost implications for using the promotion media described above although the cost is justified owing to the high number of customers the café attracts. However, the website needs to contain more information regarding the company so that it can be more effective in its promotional efforts. The Methods by which Supply and Demand is managed The Writer’s Block Café Service Blueprint Physical evidence- this is achieved through use of social media ads, billboards , café and logo signature, the café’s familiar layout, friendly staff, the café’s menu, efficient kitchen and fresh and quality products. Customer actions The customer learns of the café through the various means of promotion described above and also through the word of mouth and then makes their mind to visit the café. On entering the restaurant, the customer will line and make an order. The customer will then wait to be served before taking the meal and departing at their own pleasure. Line of interaction Interaction with customer takes place a long various fronts including marketing as well as the interaction that takes place between the customer and the café’s employees and services. The front of stage interactions involve greeting of patrons, taking orders, handing in orders to those responsible for their preparation before the guest is served with the order. The back of stage interaction involves landscaping and maintenance of the café, management, inventory, trucking delivery as well as waste management. All these interact to ensure that the customer has a wonderful experience during the stay. The support process involves the corporate office which coordinates the interactions between the café, the university and the outside world including suppliers in a bid to ensure supplies are delivered on time. Problem areas that may arise from the service blueprint There needs to be a proper coordination at all levels of the service blueprint. Otherwise, the service to the customer will be negatively affected hence affecting the café’s reputation and hence revenue and profitability. Some problems that may arise would include lower quality of service being offered to the customer, the quality of products being low owing to the suppliers supplying low quality products. In addition, the demand may be higher than the available supply hence making customers go without their orders being supplied to them. The demand can also exceed supply such that much of what is supplied goes to waste. As such, the café employs forecasting in a bid to forecast demand during various times of the year. by accurately forecasting demand, the café will only require supplies when they are required. This way, the café ensures that no products that are supplied go to waste neither are customers made to leave with their orders not having been met. In addition, the supplies department always ensures that quality is observed at all time in a bid to ensure that the café continues to offer high quality service. Analysis of Customer Quality, Satisfaction, Perceived Value and Customer Retention Efforts The company ensures that its employees are highly trained so as to offer high quality services to the customers. Furthermore, the suppliers have to observe the café’s quality code so as to ensure they supply high quality products so that the customer can enjoy high quality beverage and meals. The success of this is measured through repeat purchases which has been an effective measure of satisfaction. According to the café, its customers’ satisfaction level is very high since they serve 80 percent of repeat customers at all times hence the customer gets value for their money. The café applies the following strategies that have been highly effective in building customer relationships for the café; i) Enhanced customer service- the customer employs a dedicated staff and has put in place a dedicated channel for quick and effective solution of customer problems while attending to their needs promptly. Having a superior customer service makes the café stand out from the competition (Ravi, 2002). This is because it enhances customer experience hencecreating repeat business, creating positive word of mouth and hence increases in sales therefrom. ii) Effectively building two ways communication- the café effectively makes use of its social media platform including its websites to enhance two way communications with the customer hence creating rapport and hence relationship between the company and its customers. The company normally conducts research in a bid to establish the level of customer satisfaction and hence establish areas of improvement. The research is conducted twice per year with the participants being randomly selected among the customers. Each participant is given a questionnaire to fill on various issues that relate to customer service as well as the company’s offerings. The current research strategy is highly effective as it has been identifying areas that the company needs to improve on in a bid to better serve the customer. However, there is need to increase the frequency at which the research is carried out in a bid to serve the customer better. I have conducted a service audit for the café using SERVQUAL that reveals that although the café has been effective in meeting customer expectations, there is still room for improvement as the reality of the café’s service fell slightly short of my expectation in many respects. The results of the audit are attached as an appendix. Internal marketing The current organizational culture at the Writer’s Block Café does support customer orientation. The company has put in place employee motivational programs in a bid to ensure they serve customers with zeal and zest. Some of the programs include best employee awards as well as good pay packages. In addition, the company is always open to customers’ grievances which are attended to promptly. The grievances are aired through various means including through suggestion box as well as the media described above. Marketing strategy Bearing in mind the above market analysis for the café, there is need to develop a new marketing strategy that will enable the café realize its full potential through improved marketing hence leading to increase in number of customers, sales and hence profitability. The new marketing strategy will have three fold objectives (Michael, 2010). These include: a) Increasing consumer awareness of the healthy aspects of the cafe offerings and the environment the café provides especially to those who want to hold discussions and meetings over meals by 10%. b) Increasing sales by 20% in the café through improved marketing efforts within one year. c) Increasing the café’s profitability by 8% through improved efficiency as well as the increased revenues within the first year of the new marketing strategy implementation. Future target market segment The café has traditionally served the student market segment and hence it has been disadvantaged by having to sell its products and services at economic prices that students can afford with an aim of attracting as many students as possible. However, this has resulted in low level of profitability. As such, it will be right for the café to consider a new segment of the market. As such, two new segments will be introduced. These include the events and outside catering segment as well as the executive lunch segment. The events and outside catering segments will cater for people that want to have such kind of services. Since the sales on weekends are usually very low as students break for weekends, the café should advertise the café as a place where people should hold events on weekends. In addition, outside catering services should be introduced (Boundless.com, 2015). On the other hand, the executive lunch segment will seek to attract people who would want higher quality services but will also be willing to pay a little bit more for the improved service. It is believed that the areas surrounding La Trobe have enough customers for the two segments if enough marketing is done given the high quality of services offered at the café. New Brand positioning The café will provide the consumers with a 3D experience of the brand and hence this will be premium positioning. In this regard, our customers will experience the brand in a real physical environment that is warm, contemporary and friendly where the customers will be able to indulge themselves with the quality offerings of the café. In a bid to achieve premium positioning, the café will differentiate its experience from other cafes around by exposing the customer to the Writer’s Block Café indulgence that is unrivalled. In other words, the café will seek to provide the customers with experiences they cannot find elsewhere. To further confirm this position, customers will also have experience that will include chocolate and gifts. Product strategy The company will approach a value approach product strategy whereby different pricing will be employed for different types of customers. It is hoped that this way, every customer will be satisfied with our offerings and hence the café can significantly increase sales. Optimum pricing strategies The company will continue using the economy pricing strategy it has been applying on the current segment of customers (McDonald, 2014). However, we will employ high low pricing for the new segments to be introduced. In this regard, the services will regularly be priced higher than those of our competitors. However, through promotions we will offer lower pricing regularly with an aim of bringing customers to the organization hence increasing sales. People All the staff at the café will be retrained with an aim of equipping them with skills to better serve the three customer segments. The café will also introduce motivational packages for the employees so that they can better serve the customers. Process The order process will be based on service where the customers will read menu and make orders. However, in some instances, there will be self-service based on the customer convenience. References: Sally, D2008, Market planning: A workbook for marketing managers, New York, Delmar Thomson Learning. Boundless.com, 2015, Service marketing management and metrics, retrieved on 20th May 2015, from; https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/services- marketing-6/the-importance-of-services-48/service-marketing-management-and-metrics-244- 6670/ McDonald, D2014, Introduction to services marketing, New York, John Wiley & Sons. Michael, H2010, Marketing strategy, Western Australian, Cengage Learning. Ravi, S2002, Services marketing, Mumbai, Excel Books. Appendix A – the SERVQUAL Questionnaire The Survey The questionnaire below is in two sections. The first section asks you to rank the service firm according to your expectations i.e. what you expect it to provide. The second section asks you to rank the firm you chose for the survey according to your experiences and perceptions. Expectations This section of the survey deals with your opinions. Please show the extent to which you think the service firm should posses the following features. What we are interested in here is a number that best shows you expectations about this type of service firm. You should rank each statement as follows: Strongly Strongly Disagree Agree 1 2 3 4 5 6 7 Statement Score 1. The service firm will have modern looking equipment. 7 2. The physical facilities at the firm will be visually appealing. 7 3. Employees at the service firm will be neat in their appearance. 7 4. Materials associated with the service (pamphlets or statements) will be visually appealing. 7 5. When an excellent service firm promises to do something by a certain time, they do. 7 6. When a customer has a problem, an excellent service firm will show a sincere interest in solving it. 7 7. An excellent service firm will perform the service right the first time. 7 8. An excellent service firm will provide the service at the time they promise to do so. 7 9. An excellent service firm will insist on error free records. 7 10. Employees of an excellent service firm will tell customers exactly when services will be performed. 7 11. Employees of an excellent service firm will give prompt service to customers. 7 12. Employees of an excellent service firm will always be willing to help customers. 7 13. Employees of an excellent service firm will never be too busy to respond to customers' requests. 7 14. The behaviour of employees in an excellent service firm will instil confidence in customers 7 15. Customers of an excellent service firm will feel safe in transactions. 7 16. Employees of an excellent service firm will be consistently courteous with customers. 7 17. Employees of an excellent service firm will have the knowledge to answer customers' questions. 7 18. An excellent service firm will give customers individual attention. 7 19. An excellent service firm will have operating hours convenient to all their customers. 7 20. An excellent service firm will have employees who give customers personal service. 7 21. An excellent service firm will have their customers' best interest at heart. 7 22. The employees of an excellent service firm will understand the specific needs of their customers. 7 Perceptions The following statements relate to your feelings about the particular service firm you have chosen. Please show the extent to which you believe this service firm has the feature described in the statement. Here, we are interested in a number from 1 to 7 that shows your perceptions about the service firm. You should rank each statement as follows: Strongly Strongly Disagree Agree 1 2 3 4 5 6 7 Statement Score 1. The service firm has modern looking equipment. 5 2. The service firm’s physical features are visually appealing. 5 3. The service firm’s reception desk employees are neat appearing. 6 4. Materials associated with the service (such as pamphlets or statements) are visually appealing at the service firm. 6 5. When the service firm promises to do something by a certain time, it does so. 4 6. When you have a problem, the service firm shows a sincere interest in solving it. 5 7. The service firm performs the service right the first time. 4 8. The service firm provides its service at the time it promises to do so. 4 9. The service firm insists on error free records. 5 10. Employees in the service firm tell you exactly when the services will be performed. 5 11. Employees in the service firm give you prompt service. 6 12. Employees in the service firm are always willing to help you. 7 13. Employees in the service firm are never too busy to respond to your request. 6 14. The behaviour of employees in the service firm instils confidence in you. 5 15. You feel safe in your transactions with the service firm. 7 16. Employees in the service firm are consistently courteous with you. 6 17. Employees in the service firm have the knowledge to answer your questions. 5 18. The service firm gives you individual attention. 4 19. The service firm has operating hours convenient to all its customers. 4 20. The service firm has employees who give you personal attention. 5 21. The service firm has your best interests at heart. 5 22. The employees of the service firm understand your specific needs. 5 Source: Parasuraman, A., Zeithaml, V.A., and Berry, L.L. (1988) ‘ SERVQUAL: a multiple item scale for measuring customer perceptions of service quality’, Journal of Retailing, vol. 64 (1): 12-40. Read More