04) a. Identify the current competitors of Richy Cafe'. b. Thinking about each opportunity you identied in 03, who will be the new competitors for each situation? 05) Analyse the viability of each opportunity by identifying below for each opportunity. Opportunity 1 Opportunity 2 Opportunity 3 Cost Expected revenue! return on investment Payback period Who are the competitors of this Richy performance The first Caf started in 2015; Richy Cafe is offering a classy 8: cosy atmosphere where guests will enjoy an authentic Italian coffee taste along with the most delicious Italian snacks and desserts. With the first cafe', Richy's guests loved the food and the coffee taste the service was excellent and the caf decoration and branding was simple yet classy and very warm. Customers wrote some excellent reviews and spread the word among their friends and families, the marketing team then used these reviews on social media campaigns and very fast Richy became the trendy and beloved Caf in the area. By the year 2019 Richard had already 5 cafes around Melbourne and was still aiming for more when COVlD-19 hit the cafe market very hard and slashed a lot of the prots. Richard managed to barely cover his costs. leaving his prots at 0.8% by the year's end. While the average net prot for a Caf is estimated around 10%, Richard managed to earn by 2019 an average of AUD 100,000 per Caf. Case Study The Business This is a ctitious business case study of Richy Caf. Richard, a young ambitious and hardworking business owner, decided to start a caf in Melbourne back in 2015 with the ambition to build a large Caf chain across Melbourne as a rst step, and expand to New South Wales and Queensland afterwards. Starting the business, Richard was managing the store himself as well as the recruitment and the marketing roles. As the business grew, he started to structure the business and has put in place several policies and procedure to secure the fair treatment to all employees, a safe work environment and offered competitive packages The worlcflow in the stores is very basic yet efcient; early in the morning the chef prepares the snacks and desserts of the day before the opening hour. The waiters take notes of the orders in writing. give the order note to the barista to prepare the coffee. and the waiters grab the dessert/snacks that are already prepared and serve the customer. After enjoying their coffee and snack, customers will head to the register, and pay the waiter who will record the order and payment. At the close of business. the written notes are revised against the money recorded in the register system. The marketing department has its own policies and procedures that mainly cover the roles and responsibilities of each employee, the approval cycle and reporting lines. The structure today: The table below reflects the different stores' sales and prots between 2017 and 2019. The Challenges: Opening new stores can be costly and could be somewhere between AUD 300,00 and 400,000 depending on size and location to cover the lease, renovation and branding' equipment, wages, insurance, food 8: drinks. The customer preferences and eating habits have been changing for a few years now. The Melbournian lives a fast-paced life, they tend to spend less time in cafes and restaurants - yet they still want to enjoy their coffee and their tasty food. That is why there is a significant increase of on-the-go food and drinks and delivery orders. Competition is increasing, more and more cafes are starting an estimated 2000 cafes are operating in Melbourne today mostly around the CEO. The main competitor however would be Degani, a large chain across Australia that offers good coffee and light meals in a cosy and friendly atmosphere. Degani has a large customer base and is loved by their customers as they adapt their menu to the local community as opposed to Richy that is an authentic Italian concept. The Future: Richard is no longer sure if having new cafes will still generate enough prot as before due to the increased cost and challenging revenues. The table below highlights the investments needed per region and the projected profit margins. CEO HR Marketing Finance Store Store Store Store Store manager manager manager manager manager Barista Barista Barista Barista Barista Chef Chef Chef Chef Chef Waiters Waiters Waiters Waiters Waiters Richard aims to double his business revenues and profit by year 2025 with a fixed annual growth of 25%.Region Cost 36 prot Vic/ Melbourne 300,000 30% New South Wales! Sydney 500,000 25% Queensland! Gold coast 250,000 15% Richard decided to slow down the expansion plan and re-evaluate the marketing opportunities available. You are working in the marketing team for Richy Cafe'; your role is to identify and study marketing opportunities. evaluate them and report to Richard the outcome of your study. Answer all the below questions: 01) Using the data provided in the case study and your own research. analyse information on the market by answering the questions below. Does the opportunity offer Richy Cafe' a competitive advantage - explain briey How is the opportunity in line with the organisation policies and procedures? 0.6) Select marketing opportunities according to outcomes of viability analysis, return on investment and competition justify your answer. a. Dene the customers in terms of demographics: age, gender, income level. b. What was last year's total market size in terms of 5 sales? c. Explain the coffee market sales trend in terms of sales growth per year for the past 3 years. 0.2) Briey explain Richard's business in terms of: a. Business objective. b. Organisational structure. c. Products and services offered. d. What potential markets (consumers) can Richard Cafe' target? Q3) a. Using the Ansoff strategies (as a for growth, identify 3 opportunities (hint: using 3 different strategies) b. Explain how you would develop and implement each of these marketing opportunities. c. Using the table below analyse each of the opportunities for organisational fit - by answering with yeso and briey justify. Opportunity 1 Opportunity 2 Opportunity 3 Is the opportunity tting with Richard's core business? Can Richard achieve the growth objectives If they seize this opportunity? Does Richard have the knowledge and capability to implement this opportunity? Marketing strategy: . The marketing team has developed the Marketing Mix below. Product: . Italian coffee beans are the main ingredients. Richy offers a range of short and long coffee options including espresso, flat white, mocha. . Italian Pastry and desserts along with light snacks are freshly made and offered daily to customers. Price: . Mid-priced coffee ranging from AUD 3.5 to AUD 5 per coffee cup. . Mid to high price range for desserts and snacks. Place: . Prime locations in suburbs with large Italian communities: Fairfield, Alphington. . Prime location in suburbs with high to mid income residence: St Kilda and Brighton. . A large cafe in the CBD. Promotion: . Mainly good presence on social media, predominantly Facebook and Instagram. . Limited or no price discounts most of the year. . Richy Cafe is positioned as an Italian experience cafe where customers get the real taste of Italian coffee. The Market Australians appreciate good coffee, and spend nearly 6 Billion AUD on coffee every year. The coffee market in Melbourne is very large and promising as Melbournians love coffee and consume it on a daily basis. The love for coffee started many years ago, with the arrival of Italian and Greek migrants; research has shown that 75% of Australians would have just one cup of coffee on a daily basis while 25% claim consuming 3-4 cups a day. Richard decided to offer mainly Italian rich flavoured espresso coffee in his cafe chain as he believes most Generation Y* as well as Generation X * would appreciate a good espresso and enjoy socialising in a cosy cafe atmosphere. (*Gen X: Gen X was born between 1965 and 1979/80 and is currently between 41-56 years old (65.2 million people in the U.S.) Gen Y: Gen Y, or Millennials, were born between 1981 and 1994/6. They are currently between 25 and 40 years old)