The largest national coffee chain has decided to expand aggressively in your market. While The Daily Grind is confident their coffee is better tasting and fresher, they have seen a 10% drop in sales at their three locations closest to the competitors new locations since theyve opened. As a result, the executive team has decided to invest more money into marketing and promotions. Theyve come to you with several ideas theyd like to get your perspective on. Which option would you advise them to go with?

A.) Introduce a customer loyalty program. The Daily Grind could create their own rewards program offering discounts and small-value incentives to guests. It could be based around a buy-10-coffees-get-one-free model and/or include random freebies, such as size upgrades or additional espresso shots. The Daily Grind could legally modify the program without giving customers prior noticemaking it easy to tweak the program as it develops. On top of the value of the freebies themselves, costs for setting up a loyalty program like this include scannable key chain tags costing $.74 per unit (with an initial activation fee of $.30 per unit), that will require $600 to design. The Daily Grind would also have to invest $379 into a gift card software program that works with its current POS system, along with a one-time processing set-up fee of $75 per location.

B.) Invest in new digital menu boards. Transitioning to digital menu boards in all 11 The Daily Grind locations would be another option. Digital menu boards make it easy to add new products and promote various selections quickly based on supply, profit margins, etc., and are proven to influence customer purchasing patterns. The salesperson at BCG Signage has quoted a cost of $3,790 per store to equip them with digital boards. BCG also offers hour- long training sessions to teach store managers and assistant managers how to operate, change and troubleshoot the boards. They recommend training two employees from each store at a cost of $50 per employee. Based on BCGs customer research, these boards can increase sales anywhere from 10-25%. BCG also estimates it will take The Daily Grind 24 months or less to recoup the initial cost of the digital menu board investment.

C.) Volunteer staff time and donate product to local events. The Daily Grind could also choose to focus on increasing community involvement. This would involve finding local events that align with The Daily Grinds mission and brandas well as donating product, in the form of coffee and food. Costs could run anywhere from $50-$1,000 per event, depending on size, audience, etc. Employees would be able to volunteer a set number of working hours per quarter, so their hourly wages would also be a cost to consider. (Baristas earn $10-$15 per hour, while assistant managers make a salary anywhere from $28,000-$35,000 and store managers $40,000-$55,000.) While it would be a one-time expense, The Daily Grind would also need to create various sizes of signage to use for different events that would cost approximately $4,300 to design and print. All expenses incurred would be in addition to the 5% of profits already donated to The Daily Grinds farming partners.

After reading the prompt, your original (initial) post should discuss:

1. The best strategic options for dealing with that situation.
2. Provide a rationale for your decision.
3. Create lists of additional questions the company would ask; information they would need and factors they should consider in making that decision.