Price of the product
Price of a commodity is one of the main factors that affect the demand of a particular product. Setting high prices on the products that we are selling such as sandwiches, breakfasts, Lunch, dinner, cold and hot drinks will affect the demand of our products. The reason to why prices of our products can affect our demand is the products that we are selling are widely and easily available at various prices everywhere. Therefore it is very important for businesses like us to choose the right prices that increase the demand for our provided products and also increase or boost up our sales and profits.
Competition
Competition is a vital factor that businesses have to consider to stay favourite in the market. If the business does not compete with the competition than its competitors are going to take over through competitiveness.
Quality
It is very important for the businesses to maintain quality standards in order to be recognized as a good quality business in its market. If the businesses do not keep quality standards they than may lose their reputation as a quality business plus they may be forced to shut down if they do not maintain their quality standards by the Health and Safety Executive.
Customer service
To be successful it is very important for businesses to provide good customer service. If the businesses do not provide or keep good standards of customer service than it may lose its customers and cause damage to the businesses image.
Target market
The café will be suitable for everyone and also the neighboring towns such as Southall, Northolt and Hanwell .Our target market will be social class and the people with low and average incomes. We are going to target both male and female belonging to all age groups. But our main target will be to attract mostly old age people belonging to the age group of 56-65 years olds, because the primary research that I and my business partners have conducted show that most people who visit the café are aged 56-65 of age. But we will be mainly targeting 26-65 years olds as a whole. The café will be made suitable to people like bus drivers and builders who are most likely to be the regular customers.
Price lists of four main things sold by competitors and our chosen price.
This is a price list for our café and our other competitors. The price list shows that our café’s prices are the lowest and the reason my partners and I have set these prices is because we are using penetration pricing and also we are entering the new market.
My business partners and I have managed to find out the information of our competitors who have already established in the market. We gained information on the quality, range of products and services and their strengths and weaknesses. We are going to analyse this information that will allow us to compete with our competitors successfully.
As we will be competing with our established competitors we will try to compete and be strong in the areas where our competitors are weak.
Our aim is to provide the best possible quality of service that none of our competitors provide now. This will include:
- Providing high chairs for younger children
- Easy access toilet in the shop
- Menus on all tables
- Allowing customers to pay before or after they finish their food
- Giving time for customer when choosing what to eat
Our task will be to successfully compete on the terms of prices and quality to stay in the market and to stay competitive through out.
Market analysis
Results of primary research carried out
The graph above shows that a wider range of consumers who filled the questionnaires was aged between 46-65. These recommend that this age group are more likely to visit coffee shops and restaurants.
The graph above shows the percentage of male and female who filled in the questionnaires that visit the cafe shops in Greenford. We asked the equal number of males and females to fill in the questionnaires.
The graph above shows what customers have mostly in the cafés. The results of our questionnaire shows that 82% of customers who come in the café mainly have hot drinks such as tea, coffee, hot chocolate and 53 percent have cold drinks such as juices, coke, Pepsi, milkshakes. The results also show that 47 % of the customers have sandwiches, 30% have breakfast and 26% have burgers from the cafes. The lowest percentages of people have which are 16% desserts in the café.
The result above shows that the amount people mostly spend each time they visit the café. The highest numbers of people who are 30 % spend £3 to £5 each time they visit a café then 30% spend £5 when they visit the café. The lowest figures of people spending in the café shows that 23% of people spend £1 to £3 when they visit a café and 10 % spend under £1 when they visit a café each time.
The chart above shows that with whom consumers visit the cafe with for example friends, family and alone. The results illustrates that 58% of customers who come to the café are alone by themselves these people may be bus drivers or builders who come to have tea or coffee, breakfast or lunch in their break time. 24 % visit the café with their families and 18% with friends.
The graph above shows where most people want the café to locate. The chart shows that the highest number that is 47% shows that the new café should be located in Greenford. 23% show that the new café should open in Ealing and 14% show that it should be opened in Southall, 10% in Norhtolt and 3% in Hanwell and 3% in Ruislip. These figures will help us in considering a most suitable location for our café.
The graph shows that the promotional material that people find attractive. The research shows that 53% of customers find posters most attractive and 40% says they find leaflets more attractive. 23% of people say that they find local newspapers attractive and 20% say they find billboards more attractive and 17% say that they find point of sale more attractive. This piece of primary research will allow us to choose the most attractive advertising materials.
Marketing Plan
Product
Product is a very important area in the business because on this base we and other businesses do their business. Therefore product will be one of the most aspects vital of our business that is Broadway café. Our questionnaire results show that largest percentage of customers like to have hot and cold drinks and sandwiches in the café. As the graph below shows that 30% of customers like to have Breakfast, 26% like to have burgers and 16% like to have deserts as well in the café.
We will be selling all the products such as Sandwiches, Burgers, Breakfast, Desserts, Cold and hot Drinks. We will also monitor the products that our competitors are selling and try to provide in our café as well in order to be competitive and attract new customers. I and my other partners discussed and agreed that most of our food will be cooked before hand. To provide high standards of quality we will keep the products in the right temperature so their quality is not effected for example we will make the dinners before hand and will keep them warm in special ovens which enables the food fresh for a long period. My other partners and I also decided that we will make burgers fresh as they do not take long to get ready as compared to breakfasts and dinners. In breakfast there will be a few things that will be only made when the customer orders them such as fried eggs, baked beans and slices of bread.
Sandwiches which large number of consumers will like to have will also be made before hand in small bulks. The reason we will make sandwiches in small bulks is that we do not want some to be left over because we will not use them for the next day as we will be preparing fresh sandwiches in the morning before we open our café.
To meet our largest number of consumers who like to have hot and cold drinks, I and my partners decided that we will use famous brands for hot and cold drinks such as PG Tips tea, Nescafe coffee, Pepsi, Coca Cola coke and Schweppes lemonade. In order to provide good quality and taste.
Our primary questionnaire results show that 16% of the customers like to have deserts as well in the café. To provide good quality of products and also to provide service we will provide desserts. We will see what our competitors provide as deserts and how many different types of desserts they sell according to that we will also be able to compete in the market. We will keep ice cream such as Haagan Daz and Walls. We will also be serving hot and cold custard as a dessert to our customers.
Price
As we will be entering in a competitive market with competitors established over number of years, and in order to avoid and compete with the competitors we will be using penetration pricing. Penetration pricing means that prices are set at very low level in order to secure loyal customers. We will set a level of sales after meeting those levels we will slowly increase the prices of our products so that our customer don’t notice.
Place
It is very important for the business to carefully decide what place they are choosing for their business to locate. In order to find the most suitable place for our business this is a breakfast and lunch cafe. My business partners and I have carried out a questionnaire survey. The result of the survey shows that forty-seven percent (47%) of people say that the café should be located in the Greenford; this is the highest number of people. Ten percent (10%) of public says that the cafe should locate in Northolt, twenty-three (23%) say that the cafe should be located in Ealing, fourteen (14%) say that the cafe should be located in Southall and thirty percent (6%) say that the cafe should be located in Hanwell and Ruislip.
After analysing our results my business partners and I decide that we are going to locate cafe in Greenford. The reason behind to open our cafe in Greenford is not competition in those areas. The main reason is that our primary research shows that forty-seven percent (47%) of the people say that the cafe should be located in Greenford. Secondly we are expecting more customers in Greenford as compared with other areas.
Promotion
Business needs to carefully decide how they are going to advertise their products and services. Good successful advertise can boost business sales and bas advertising and cost business lots of money. In order to make our advertising or promotional campaign successful we have carried out questionnaire survey that has shown that most of the customers say that posters and leaflets are more attractive way of advertising for a cafe. Therefore my business partners and I will be advertising by posters which will be put on our cafe’s windows and leaflets which will be distributed in shops and houses around our café shop.
Production process
My partners and I have worked out the amount we can be selling daily. By analysing the questionnaire results we know what customers can be expecting from us.
Sandwiches x 40 roughly £1.30 each = £52
Breakfast x 25 roughly £3.00 each = £75
Burgers x 20 roughly £2.50 each = £50
Dinners x 10 roughly £4.00 each = £40
Dessert x 10 roughly £1.00 each = £10
Hot drinks x 60 £ 0.45 each = £27
Cold Drinks x 30 £0.50 each = £15
Total £269 (per day)
We will be trading 6 days a week (Mon-Sat)
6 days x 52 weeks = 312 days a year
312 / 12 = 26 days a month
26 x £269 (sales per day) = £6994
It is expected to receive roughly £7000 a month from our sales. These sales are likely to be achieved because the business will be trading full time (8 hours per day six days a week).
We do not expect to sell the same amount everyday because we expect to have increase in sales every month as we get more established and well known.
Plant machinery and equipment required
The machinery and equipment needed to open a coffee shop.
10 x Tables £800
40 x chairs £1600
Fridge £500
Fridge for cold drinks £0 (can get it free from Coca-Cola Company)
2 x Freezer £1000 (£500 each)
Frying Machine £400
Boiler for hot water £300
Grill £450
Slicing machine £450
Beanmary £1200
Van £2000
Cash register £200
Toaster £120
Microwave £300
Heater £80
Fan £90
Total £9490
Crockery
40 x Breakfast/dinner plates £80
40 x side plates £50
40 x cups and saucers £80
Knives, forks and spoons £50
Dishes for cooking food £100
5 x cutting knives and
Chopping boards £40
Total £400
The equipment mentioned is to be purchased from the well-known companies such as Argos and Dixon’s who give us grantee for their products and deliver them to the shop as agreed by all partners.
Quality and assuring Targeted quality
Our work is concerned with food and in order to meet health and hygiene standards, we will need to ensure high levels of quality. We will also ensure that we have the highest levels of quality. We will also ensure that we have highest standards of customer service is provided which is a week factor of our some competitors.
The way through which we are going to ensure quality is:
- Welcoming or greeting the customers and providing them good quality of service. For example: giving fast service and being polite.
- We will be using famous brand products as they are known to be the good quality products such as Heinz baked beans, Nescafe coffee, Tetley’s and P.G Tips tea. Apart from these we also need to make sure that the vegetables and meat we serve are fresh and are kept in suitable temperatures so they do not lose the freshness and quality we aim to give our customers.
- We also get training on health and issues so our customers do not suffer from any food poisoning because of our lack of knowledge.
- To ensure that the hot food is reached to the customers i.e. hot toasts is taken to the customers along with the breakfast is because some of our competitors take the toast first and then bring the breakfast and the toasts get cold in the time between.
Stages of production
- Taking order from customers.
- Write down the order on small piece of paper.
- Pass the order to chef.
- Providing customers any cold/hot drink asked.
- Taking knife, fork and serviette to customer.
- Taking food to customer soon as it is ready.
I and my partners have decided to set the service in a way so we could use time efficiently and customers could get the best out of it, for example: we will provide knife, fork and serviette to customer before the food is ready and taken to them.
Timing
We have decided to order the stock a week earlier before we finish our old stock, because we want to earn customer loyalty. Fresh food such as meat and vegetables are decided to bring daily to keep the quality.
Resource Requirements
Financial resources
We have worked out that we will need a starting capital of £80,000 (£70,000 given for lease and £10,000 to spend on resource, equipment and machinery.
We will also need working capital of £1,000 to fund day-to-day expenditure for one month. This is estimated as:
£300 for advertising
£300 buying raw food and drinks for the first week
£600 buying raw food and drinks for the next three weeks (£200 each week)
It is expected that we will roughly be making sales of £7,000 each month from which we will be paying part of our loans, bills and other day-to-day expenditure and will keep this same for the following months.
Human Resources
We are three partners; each of us will be given a main job role in the coffee shop. We will also be working as a team and helping each other. The job will be divided as:
Shekib
- To stay on the counter
- Taking orders from customers.
- Providing consumers hot/cold drinks
- Working with cash register
- Helping to wash up dishes and clean tables when free.
- Working as a team to clean the overall restaurant in the evenings.
Mukarram
- Stay in the kitchen.
- Preparing and cooking food (if necessary).
- Helping out to wash the dishes when free.
- Working as a team to clean the overall restaurant in the evenings.
Sandeep
- To work both in and out of the kitchen.
- Taking knifes and forks to customers.
- Taking food (made by Mukarram) to customers.
- Cleaning tables and washing dishes.
- Working as a team to clean the overall restaurant in the evenings.
As it will be three of us, we do not need to recruit staff from out side. How ever if our business gets very busy, we might recruit a part time staff to help out in the kitchen.
We will need to get training on health and safety at work place and food hygiene. To get health and safety at work place and food hygiene training we each have to spare one day separately and attend special training in a private college.
Training fees will be £60 per person, which is a total of £180 for all three partners.
Time plan
We will need resources and equipment such as fridge/freezer, grill, toaster including food and drinks to run the shop.
It will take a minimum of one week to decide what resources are required and find reasonable suppliers.
Resources and equipment will be ordered as decisions are finalised and than ordered to the selected suppliers who could take between 7-10 days to deliver the goods. After the equipment is available to us we will start the fixture and fitting job straight away therefore the cafe is ready for business.
We will also require ordering food in advance and keeping them ready to cook when ordered.
It is thought to open the café for business in four weeks and have all the equipment fixed and ready to use.