CASE STUDY -BLACK BEANS CAF

Black Beans Caf is located in the Sydney CBD and caters for individuals, businesses, and take away customers. The basic market need is for fresh, creative, exotic, attractive, pre - made delicacies and desserts. The caf uses homemade sauces, organic vegetables, and imported meats and cheeses.

Mission

Black Beans Caf is an ethical provider of :

• high quality coffee
• other quality beverages
• hot and cold gourmet food
• consistently high level of friendly services to customers

VISION

Black Beans Caf aims to successfully operate a small caf specialising in the supply of high quality coffee. The business will provide, within three years, sufficient funds to purchase an additional caf .This will also in the CBD of Sydney.

Marketing Policy and Procedure

RATIONALE

This policy and procedure on the use of marketing materials is required to enable Black Beans Caf to adhere to all legislation relevant to marketing practices and meet standards and codes such as Advertising Standards Bureau (ASB) code of conduct.

Purpose

The purpose of this policy is to describe the procedures for Black Beans Caf to ensure its marketing and advertising are accurate and ethical and promoted in accordance with legislation, standards and codes of conduct.

General Policy

This policy applies to all employees and external providers involved in the promotion of Black Beans Caf products and services. Detailed written procedures are available to all staff and are included in the staff induction packs.

All marketing material must:

• Adhere to Privacy Act 1988 - must not use personal images, information for marketing purposes without written consent.
• Adhere to "Do Not Call" legislation - potential customers on list must not be called for marketing purposes.
• Adhere to anti -discrimination policy - images or written material must not portray any group or individual in a negative, offensive or stereotypical way on the basis of sex, gender, marital status, etc.
• Be conducted in a safe and responsible manner to minimise risk to health and safety of Black Beans Caf employees and the general public.
• Not include spam campaigns

Adhere to the Competition and Consumer Act 2010. Employees must not -

• Attempt to induce individuals to place their personal interests above those of Black Beans Caf
• Attempt to restrict competition by - inducing a competitor or customer to breach a contract with a third party, obtaining unauthorised access to classified information or documents, securing unfair competitive advantage
• Violate any law or regulation
• Engage in any activity that could damage the company's reputation
• Giving false or misleading information or advice in relation to products or services or any other claims
• Where relevant, adhere to standards and codes of practice regarding specific types of media such as radio, television or the internet

Marketing and advertising materials refers to all materials printed published and in electronic form relating to Black Beans Caf.

EXECUTIVE SUMMARY

Black Beans Caf is a prestige coffee shop, catering to the growing demand for gourmet coffee, quality food and fast service.

The caf provides high-quality food that may be eaten in or provided as "take-away".

Black Beans Caf provides an early morning breakfast service and a lunch service for individuals and businesses, with emphasis on high-quality service and consistent attention to detail.

At a glance - Black Beans Caf

• Location: Sydney CBD
• Design: bright and functional
• Size: 90m
• Employees: 5 to 8 full-time plus casuals
• Seating: 25
• Types of transactions: 65% take-away, 35% eat-in
• Opening hours: 7 am to 4 pm

SITUATION ANALYSIS

Black Beans Caf is about to enter its third year of operation. The caf has been well received, but marketing is now critical to its continued success and future profitability. The caf offers a quality of coffee unsurpassed by any of its nearby competitors and quality meals for dine-in and take-away. The basic market need (for individuals, businesses and take-away customers) is for fresh, creative, attractive dine-in meals, pre-cooked and pre-made take- away food, a range of beverages (including fine coffee), and exotic desserts. The caf uses homemade sauces, organic fruit and vegetables, and high-quality local and imported meats and cheeses.

MARKET SUMMARY

Black Beans Caf possesses good information about its market and knows a great deal about the common attributes of its most valued and loyal customers. The caf will use this information to better understand its clientele, their specific needs and how products and service can be continually improved.

MARKET ANALYSIS

Market Demographics

The profile of Black Beans Caf customers consists of the following geographic, demographic and behaviour characteristics, based on a Chamber of Commerce report.

• Overview:
• a large percentage of office workers (80% of daytime trade)
• the area (number of offices) is growing at 8% per year
• Geographic:
• the immediate geographic target is the surrounding area, a radius of 250 metres
• the total targeted population is estimated at 45,000
• Demographics:
• male and female
• aged 20-60, this is the segment that makes up 83% of the available daytime market
• retail employees, office workers and professionals, many tertiary educated
• incomes vary from retail to professional; average is over $60,000 per year
• most buy take-away food at lunchtime or eat out most working days
• most tend to patronise fast service cafs
• Behaviour factors:
• enjoy high-quality take-away food and dine-in meals rather than bringing their own lunch from home
• value the convenience of prepared food and the time taken to prepare it

MARKET NEEDS

Black Beans Caf provides its customers with a wide selection of freshly prepared and fresh pre-prepared food that is pleasing in taste and uses high-quality, including organic "top- shelf", ingredients. The caf seeks to fulfil the following benefits that are important to their customers.

• Selection: a variety of hot, cold and "heat-and-serve" take-away food, with the option of dining in (inside the caf or at tables outside).
• Accessibility: patrons can gain easy access to the caf with minimal wait.
• Customer service: patrons are impressed with the quality of food and the fast, friendly service.
• Competitive pricing: all products and services are competitively priced relative to comparable outlets.

Above all, Black Beans Caf believes that fast service, gourmet coffee and carefully selected food in a busy office environment is the key to its customers' needs and wants.

MARKET TRENDS

The market trend for cafs is headed toward a more sophisticated customer. The caf patron today compared to the past is more sophisticated in a number of ways.

• Coffee and food quality: the preference for high-quality ingredients is increasing as customers are learning to appreciate the qualitative differences.
• Speed: as people have less time available in the morning before work and at lunchtime, patrons are learning to appreciate speed of service.
• Selection: people are demanding a higher quality of coffee and food.

The reason for this trend is that, within the past couple of years, caf offerings have increased, providing customers with more and new choices. Caf patrons no longer need to accept a limited number of options and most are not prepared to. With more choices, patrons have become more sophisticated. This trend is intuitive: it is easy to observe a more sophisticated caf patron in the city market, as well as in major suburbs, where there are more choices available.

Black Beans Caf strongly believes that its customers have become more interested in speed of service than any other issue, provided they receive quality food. That is why people patronise the caf and are loyal customers.

MARKET GROWTH

People expect a variety of food choices, as well as traditional favourites. For example, in 2008, sales of focaccia in the Sydney CBD (a high percentage of Black Beans Caf's food sales) were estimated to be $50 million, and estimated to be growing at least 5% per year. This growth can be attributed to several different factors. Although not all focaccia are "good for you" (particularly those with cheese-based sauces), they are quick to prepare (and pre- prepare) and are very tasty. Black Beans Caf sees no real substitute for what it provides.

ECONOMY

Based on economic forecasts, Black Beans Caf assumes that interest rates will stay relatively steady and so will have no effect on disposable income. The same assumption is made about employment levels, which the caf's owners assume will remain at between 5% and 6%.

POLITICAL

From research carried out, Black Beans Caf has identified that the government's focus and emphasis in the future (including its legislative and regulatory) direction will be on "growing the economy" and supporting small business, which Black Beans Caf sees as a positive for its business model. Black Beans Caf as a business operating in Australia will abide by the law in all its dealings and comply with legislation relevant to its business activities.

SWOT ANALYSIS

The following SWOT analysis captures the caf's key strengths and weaknesses and describes the opportunities and threats facing Black Beans Caf.

STRENGTHS

• Excellent staff; highly skilled at coffee-making and food preparation
• Excellent location with passing trade of commuters coming into the city to work
• High customer loyalty; repeat customers
• Coffee and food offerings that exceed competitors' offerings in quality, speed of service and accessibility.

WEAKNESSES

• A limited marketing budget to develop brand awareness
• The struggle to continually appear innovative in a stable product market
• Lack of space and capacity to serve more customers

OPPORTUNITIES

• A strong market with a significant percentage of the target market still not using Black Beans Caf
• Increasing sales by duplicating operations in other area of Sydney CBD

THREATS

• Competition from local cafs that respond to Black Beans Caf's quality product and service
• Uncertainty about worldwide coffee supplies and increases in coffee prices

COMPETITION

Competition (Local only)

• Buzz Caf: offers consumers a wide range of sandwiches, wraps and focaccia; enables customer to select the ingredients; average food quality.
• Dynamic: a limited selection of coffees; relatively high quality pre-prepared focaccia, wraps and sandwiches; higher price point.
• Mia's: good coffee and food that is reasonably fresh, reasonably innovative; at a lower price point; also has licence to serve alcohol.
• Verdi: medium-priced take-away food (including focaccia) with average ingredients and no creativity; less-than-average store atmosphere.

GROWTH ANDSHARE ANALYSIS

• Individual eat-ins: growth in potential customers 7%; estimated customer numbers in 2011 is 7,500.
• Groups: growth in business catering 9%; estimated customer numbers in 2011 is 650.
• Take away: growth in take away 13%; estimated customer numbers in 2011 is 18,000.

KEYS TO SUCCESS

Black Beans Caf's CBD location is the key element to its success but, as indicated in the SWOT analysis, growth is restricted by the size of premises.

CRITICAL ISSUES

• Expansion of the business is dependent on either obtaining larger premises or an additional outlet.
• Larger premises will not necessarily result in proportionate expansion of the business.
• Duplication of the business in another CBD location away from the existing caf is a far more suitable option.
• The two businesses can operate distinctly in different locations but with the advantage of stronger buying power, the common use of some services (eg cleaning and bookkeeping) and an exchange of knowledge.

MARKETING STRATEGY

Black Beans Caf's advertising budget is limited; so the advertising program is simple. The caf does direct mail and local advertising, with coupon inserts in The Weekly (a weekly CBD newspaper), which appears to be the most successful of the campaigns.

Black Beans Caf will attempt to get articles in The Weekly. This has proved successful for similar businesses that have been featured in that newspaper.

MISSION

• Provide:
• high quality coffee
• other quality beverages
• hot and cold gourmet food for dining in and take-away
• friendly, efficient service
• Ensure that all staff are well trained
• Provide physical surroundings that are comfortable to use, clean and well maintained
• Comply with all regulations relating to safe and hygienic supply of food.

MARKETING OBJECTIVES

1. Increase foot traffic in the caf by 30% for 2011.

2. Increase awareness of the Black Beans Caf brand by 50% in the Sydney CBD area in 2011

FINANCIAL OBJECTIVES

1. A double-digit growth rate for each future year.
2. Reduce the overheads through disciplined growth, and reduced wastage.
3. Continue to decrease the variable costs through purchasing and purchasing from new suppliers.

TARGET MARKETING

The market can be segmented into three target markets:

• Dine-ins: people that order and eat in the caf.
• Businesses: business that require prepared food for delivery to their premises (for business meetings, seminars, etc); catered morning and afternoon teas and lunches.
• Take-away: people who prefer to purchase take-away food to eat at their desk, in the park, etc.

The Black Beans Caf customer is typically aged between 20 and 60, working in businesses within 250 metres radius of the caf. Other customers are people who come to the CBD occasionally for business, shopping or other reasons.

POSITIONING

Black Beans Caf's position is to be a reasonably priced provider of fine coffee and gourmet food. Its consumers appreciate high-quality coffee and food and will recognise the value and unique offerings of Black Beans Caf.

• Product: finest coffee ground fresh by Black Beans Caf
• Service: experienced, friendly customer-focussed staff who can provide coffee and meals that customers appreciate and that are delivered within the customer's required time.

By offering a superior service in speed and attention to detail, Black Beans Caf will excel relative to its competition and achieve its objectives.

STRATEGY PYRAMIDS

The single objective is to position Black Beans Caf as a provider of a superior coffee experience and supplier of gourmet food in the CBD. The marketing strategy will seek to first create customer awareness of the services offered, develop that customer base, and work towards building customer loyalty and referrals.

The message that Black Beans Caf will seek to communicate is that it has passionate baristas who use high-quality coffee to provide a superior coffee experience, and that the food is fresh, mainly organic, and reasonably priced. This message will be communicated through a variety of methods.

Question- Part 1.

This project requires you to collect information on the internal and external business environment to develop marketing strategies and marketing plan. You need to read the case study provided in the Additional Information at the end of this assessment document: Black Beans Caf, Case Study Resources

Task 1

Review the information on Black Beans Caf. You are now required to develop a report on internal and external business environment. In your report you must include the following:

1. Describe the current core activities, customer base, business values and current business direction of Black Bean Caf.
2. Identify and analyse information relating current and past marketing strategies and its effectiveness
3. Review business performance information to identify strengths, weaknesses and critical success points of the business
4. Identify and record current capabilities and resources (e.g. the use of technology or e- business to develop and implement marketing strategies) and need for any specialist assistance (e.g. underperforming products and services with reasons for underperformance)
5. Identify and analyze information on expected market growth or decline for coffee consumption industry and risk factors
6. Analyse projected changes to labour force, population and economic activity that would effect your marketing.
7. Current comparative market information which may include best practice information, benchmarking and competitor information.
8. Industry and customer trends , emerging issues and developments which may be: economic, ecological, environmental, government activities, social and cultural, demographic, technological or industrial
9. Legal, ethical and sustainability requirements for the business and its impacts

1. Opportunities presented by new technologies

Task 2

1. From the information you gathered in Task 1 and the information provided in the case study information, identify at least two marketing opportunities for the business and the innovative marketing approaches and techniques that are appropriate.

1. For the identified opportunities develop marketing strategies consistent with the direction and values of Black Beans caf. In your strategy :

• Outline the marketing channels and distribution networks you will use for your marketing communications and material
• Explain how you will integrate legal, ethical and sustainability considerations

1. c)Email the developed strategy to the manager of Black Beans Caf. Ask for the feedback and make the relevant changes to the strategy.