Custom Coffee & Chocolate Marketing

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* Capital - Now that they have exhausted their savings and loan, they need to find new operational capital by any mean. It seems to me that the cash flow is sufficient since they decided to press-on, but careful analysis of future spending and obligations needs to be done.

* Price structure – The book states that they have struggled to find the right price point; although they have formal management and marketing education, they may need an external consultant to help them sort out a balance between cost and price. Their decision to purchase only fair trade coffee may add a restraint to what they can realistically charge for their products without affecting the bottom line. This last point resonates with the weakness of location as I stated previously (students are not willing to pay higher prices just as professionals do).

Opportunities

* Social Media – Facebook, tweeter and other social media are great means to disseminate Custom Coffee and Chocolate’s menu, hours of operations, prices, etc.

* Wire-less service – Always sought by students and faculty, is a good way to attract customers.

* Expanding the menu and exploiting the eating habits of customers– They can incorporate different type of foods into their menu by taking in consideration the type of customers and even the seasons. For example, studies have shown that people eats more cake during the winter months and more sandwiches during the summer months. Students may prefer a quick snack (because of lack of time), rather than a substantial sandwich as a professor of faculty member may want since they do have the time. Also, the nutritional preference needs to be taken into account (health conscious vs sweet tooth).

* Delivery service – It would be a great idea to deliver to students, faculty and residents in general since this in itself is a good marketing opportunity by exposing their product to the community and taking advantage of a captured market (residents and students in dorms).

Threats

* New franchise – The threat of a corporate establishing a franchise with their higher resources (a.k.a. STARBUCHS), to compete with CC&C should always be in the fore front of Bonnie and Stacy’s business strategy.

* Wrong assessment of their core customers (wrong market strategy)– By incorporating things such as poetry and discussion groups, they are taking the risk of alienating all other type of students and faculty that are not “into” this kind of events, thus unwillingly labeling the coffee shop as a place for snobs, nerds, geeks and so forth. CC&C needs to be a place where everyone feels welcome. Furthermore, the fact that you can allure a customer to stay, do not mean that they will spend more money consuming their products; on the contrary, if a customer stay for chi-chat or whatever, they consume air conditioner, heat, water from the bathroom, leave more trash, make more mess, etc. In my opinion, a coffee shop with revolving clientele would make more money than a coffee shop with stagnant customers.

3. Using the owners’ ideas for the future of their café, as well as your own ideas, outline a tactical plan for Custom Coffee & Chocolate.

The tactical plan to implement the following ideas should be pursue aggressively, but methodically.

* Expand menu immediately. This is an area where they need to do some trial and error; however, the amount of resources needed to implement an expanded menu is not detrimental so the risk of developing an unpopular item in the menu could be negligible.

* Begin an aggressive advertising in surrounding areas as soon as budget allows. CC&C’s budget is tight so careful consideration to any kind of overhead expenditures needs to be perform.

* Offer delivery service within one month. A supply of local students looking for extra cash should be abundant. The number of part-time delivery personnel will depend directly on the amount of take-out and delivery orders received. They should start with one person, but moving fast to two or even more if demand suffice. Insurance and possible liabilities of a part-time delivery person needs to be addressed.

* Offer incentives (gimmicks), to keep loyal customers. Incentives could include, buy three – get one free, preferred customer discount, etc. This is something that can be implemented immediately as well.

* Offer WI-FI connection. This service can be offered within a month. Once again, careful management of overhead expenditures is essential.

* Use of social media. This is another area that can be implemented immediately, is virtually free.

* Develop an “App”. Young people like apps, CC&C can develop an application for cellular phones with information about their menu, hours of operation, location a blog link and other links related to the university lifestyle. This could be a good venue to sell other business advertisements.

In my opinion, CC&C should seriously evaluate the possibility of opening a second store in Pike Place Market, where they should have opened the coffee shop in the first place. As I mentioned, Pike Place Market, offer a wider array of customers with better buying power, constant foot traffic and is not bounded by school seasons or holidays. The opening of this second store not only will complement CC&Cs income during the university off season, but it could become their top earning store. I understand that the rent in a business center like Pike Place Market will be considerable higher, but again, the customer base in that area worth the risk. More than a tactical plan, this can be construed as a strategic plan for CC&Ss future.

Chapter 5 – Subject Review questions

1. Refer to Table 5.3 on page 169 in the text. What would you do in each of the scenarios described?

Scenario one. Honestly – I will give the minister $20,000.00, $30,000.00 or whatever he wants in order for my company to land the project; however, I would let my bosses handle the situation as they may see fit. Why would I give in? It has nothing to do with my ethical and moral standards, this is the cost of doing business in some parts of the world. In some places outside of the United States is very common to have this kind of propositions, if I want to keep my job as a sales representative I need to “play the game or get out”; of course, this is based on the instructions of