In this task 3 I will explain the Marketing Mix in my caf businesses, which are the product (what the actual offering comprises), price (the value exchanged for the offering)

Jayson Calagos

Business Studies

Miss Joyce

Unit 3 Investigating Marketing Coursework

Task 3:

In this task 3 I will explain the Marketing Mix in my café businesses, which are the product (what the actual offering comprises), price (the value exchanged for the offering), place (this means of having the product offering available to the target audience. and promotion (means of communicating that offering to the target audience, promotional mix and distribution. In this information I will explain this area because this is very important to my café to make a very good decision on how to run and manage my new café business. All about this are the four P’s of marketing mix of business.

The Marketing Mix Explained
In order for my business to sell its products and services as successfully as possible, I need to look at what products are selling in detail to ensure they will be attractive and needed; the price to ensure it is not too cheap or too expensive; where are best distributing product for my business; and finally, how I can create interest and awareness for my products. All these elements need to be targeted at the right people at the right time. In order for my business to tackle this correctly, I need to get the right type of mix (marketing mix), the mix should include four main elements: Product, Price, Place and Promotion, by examining each and carefully and adapting them to my customer's needs, I will continue to produce and needed products and services.

Analyses of marketing mixes are usually conducted using linear regressions which clearly show the efficiency of the product or service to help provide information about the progression. In accordance to the analysis decisions are taken if needed for improvements to increase sales. This is usually done annually depending on the company’s interests.

When creating a marketing mix you need a successful combination of:

Using the right product
Must sell at the right price unless if your business will be very popular to the people, whom you price high charge for your product.
Must provide the right place
Using the most suitable promotion

If all of these are met to your business or what ever it will result in a successful product. To meet these goals the product must have the right look, it must look good and appeal to the correct audience. The price must be right in hand with the target audience, a large number of products must be sold to get a large profit. The goods must be sold in the right place, at the right times, making sure goods are delivered when and where appropriate is vital to success. The target group must be made aware of the products existence; successful promotions will help the company spread costs over large outputs.

Marketing mix for my Café

My café is a relaxing place for friends to spend some time and socialized; the interior setting and sound will setup the atmosphere.

It is located on City centre Birmingham. This location will promise us some definite customers, and it’s a very busy area. My Café will provide delicious coffee with more than a hand full of flavours combinations. Takeout services are also provided for the convenience for my customers. My main target will be late-middle class age to people in their mid 30’s since they are eager to spend, according to my survey. The business plan will show that Café can still be a success amidst all the other cafes that exist in the area.

Product

This defines the characteristics of the product or service that meets the needs of the customer.

The market I will be selling to is middle class age group and also some older people like my product, I will mainly aiming at people who works at the certain area.
Every day and need something because this is where I can make the most money from. To make all of this realistic there is a lot I will have to do. Before allowing people to buy products from my café I will have to buy some products for my café, this will include needing to buy kitchen appliances and in my café area I will need chairs and tables. I will be searching the Internet for this and will be looking for the best bargain. I will need to fit a complete kitchen because the building, which I am renting out, was previously an office block so I will need to also decorate the place.

When deciding on my product I knew it was vital to produce a product that met the criteria needed for a successful to my café business. I wanted my product that was good impression, good designing and professionals had the correct appeal for its intended audience, which are middle age which are all adult bracket, and will introduce new audiences with its individuality. From my research I found through the primary research that this group of people love’s little style/decoration on the product I sell. This is why I have decided to produce some decorations to my products. All of this information I found was also supported by my findings from my questionnaire. When asked does the packaging affect choice 40% said yes. In my secondary research I found important information in selling my product, example of this are price charge on the product, the coffee consumption and statistics that help me to prevent failure in my product. I looked at the existing product and tried to discover why it dropped in sales and stopped being a cash cow? About my product I produced unique selling point which is selling different types of organic food which is sandwich, so this is one of the main reason why I have decided to make a little alterations to the sandwich by not just not having a ordinary and simple sandwich but many different filling which would appeal to the adult people even more. And because of these alterations it will also give consumers more reasons to why they should purchase and come to my business.

The product and services for the business Cafe is hot and cold drinks which are include the coffee, and bread (sandwiches). There is a varied menu for customers to choose from at reasonable prices. Food will be delivered fresh from Hofmann’s Bakery. This supplier was chosen because the prices were inexpensive and the company has a good reputation. Deliveries will be scheduled for every other day because if they delivered every day it might result in too much stock. Problems may arise with competitors as there are many cafes in Town centre in Birmingham and the competition overall is quite ...

This is a preview of the whole essay

I have a wide range of products in my café to meet customer’s tastes and preferences. From my marketing research I found, mostly of this the 3 top sandwich fillings are, chicken cheese and ham. Therefore, it would be appropriate for me to include these fillings in my sandwiches as they are likely to meet consumer tastes. Also in my market research I decided to make organic and non organic filled on the sandwich to make more customer satisfactions on my product.

At the same time I will be having a section of grilled sandwiches to attract people who want something different in their sandwiches.

Consumers have a choice to eat in/ take away. This will help strengthen the level of quality in my café as consumers are free to relax or leave.

The main foods I plan to sell in my café are,

Any types of sandwiches, example is organic and non organic filling
Pastries
Cakes
Muffins and cookies
Salads
Different types of bread
Hot and cold beverages

In hot and cold drinks I fund that the most common and popular hot drinks is coffee and other types of hot drinks because in my secondary research – Women indicated that drinking coffee is a good way to relax. Men indicated that coffee helps them get the job done also Men drink as much coffee as women; each consuming an average of 1.6 cups per day. Women seem to be more concerned about the price than men.

So in this information I found I decide create my own menu about hot and cold drinks. These are:

Any types of soft drinks, juices, beers and wine
Coffee
Cappuccino
Chocolate drinks
Milk
Teas
Espresso
And other types of hot drinks

In this product I chosen is the best way to sell to my certain customers. Also I fund that this type of drinks are the easiest way to create and its affordable prices. The quality of the product is very important, in order to have returning customers they must feel satisfied with the product. I manage to meet these requirements by making sure production lines are run correctly and to a high standard.

The taste and style of the products from my cafe is to increase the perceived value as customers believe it to be part of a larger scale and increase brand equity. I am hoping by do this thing in my product they will buy future products on the quality of my cafe. All of this thing are called Branding is controlled by the marketing team and is devised to try and establish them and familiarise with the audience. Successful branding will help me to sales increase. This is why I have taken this seriously and working on this on the good impression for my products to make sure that all customers coming and buy my product would be happy.

Place

The location of my business is referred as the place decision. Decisions must be made as to whether it is a retail or wholesale, how many participants there will be in the distribution process and in which physical locations each of the types of the product will be made available. Also is very important as it needs to be where there are lots of passers by, have easy access, good parking facilities and have little nearby competition.

I have chosen the place where I will be renting out and I have phoned up the Halifax estate agency where they have confirmed with me that I can pay the rent monthly if that is how I chose to pay it, and I have. I will pay £1,100 every month. The place is in Town centre in Birmingham so it is in the part of Birmingham Council and because it has two floors I could place seating upstairs and have a take away service downstairs. It is necessary that I have my café in town because otherwise I would not get any business. I listed my competitors in my secondary research section and I know that I have to offer something more. They were very helpful and showed me some locations that would be suitable for my Café including information such as: sizes of property, prices and previous uses.

So my cafe will be located in City centre in Birmingham. The location will feature authentic Oriental style of decorations and furniture’s. The Cafe will be equipped with a some sound system connected to a jukebox where my customers will be able to select their favourite songs for free. The cafe will be built up to the prototype specifications, clean lines, open and pleasing to the customers.

The location was based upon the following reasons:

Community size of 1,010,200 people population within this area
High visibility – City centre, Birmingham is near the road where cars, vans and buses are travelling everyday. My restaurant is highly visible to travellers.
Easy access to parking.
Blue-collar worker make up the community.

The place is nice and comfortable, so all the customers can relax and enjoy.

Opening Hours

The Café will be open Tuesdays to Sundays from 9:00 – 15:00 for break fast and lunch time and 18:00 – 23:00 for dinner. I have chosen these opening times because I believed that these days and times are the real busiest point of the week. Opening the cafe for lunchtime and dinner time is good. There are many people in working class will go out for breakfast and lunch to drinks hot and cold drinks and eat bread which is sandwiches, and this is a good opportunity to gain customers. Opening this business at night has much better opportunity to gain customers. There are so many people going out in the evening to enjoy and have party. This is the best time to attract and gain customers. When I opening my café at night maybe I will sell more to my café like wines and beer – I sell this product only when I open my café at night because people at this time like buy alcohol drinks.

Price

Price is very important for marketing. If the price is not right customers will buy rival products/services therefore if customers are lost it results in lost revenue but it can also be lost if the price is too low because no profit will be made or income to cover costs. There must be a balance between revenue and profit. There must also be a balance between being competitive and being profitable. In this part of Marketing Mix, I will offer a good product and service in a very affordable price. My customers can choose from a wide selection of Hot/ cold drinks and food that can suite their taste and style.

So in my primary research through my questionnaire I asked how much you are willing to spend on one cup of coffee. 76% of people showed they are willing to pay between 50p – £1.00 cup of coffee. Therefore I will be placing my product just below the higher end at 60p+. By placing the price in the section I will be meeting a large amount of the audiences needs and be cheaper than what some people are willing to pay. I think this price is reasonable for the product as it has a lot of characteristics and doesn’t look like a cheap product. I am hoping this price will help the sales of the product increase as it is reasonable and not too expensive.

Below also is a sample of the menu for my café, prices were set by looking at prices for assorted other cafes, this is called competitive pricing.

Menu of Café

This are my entire Cafe certain product in Hot and Cold drinks. I separate all my prices those products in my café.

This are my all other beverage of my café products which are the sandwiches, pastries and Cakes.

Pricing Strategies

The pricing strategies are based much on what objectives the company has set itself to achieve. If I would like my business to survive the long run, I must be able to cover my costs of product. If the revenue I make does not exceed the costs, I will make a loss.

I need to have a good knowledge about my expense, as when setting the price I need to calculate the average cost of the product and then add a profit margin.

While conducting my research on competition, I found out that my competitors are using penetration pricing as there is a lot of competition in the area, by lowering prices to gain market share quickly.

So I working about the pricing strategies to gain more customers in my location I choose. As you can see in my menu, I using an also a penetration pricing which means I set a low price of my product which is to increase my sales. And the last thing a working is a physiological pricing which means I set my owned designed about my prices I made, examples is I selling a shortbread in 29p – means that I selling this product in 29p instead in 30p or other prices. This is a very good example of my prices because I designed a physiological impact of group of people, which is I provide a customer satisfaction within my business.

Competitive price list:

Price lists of four main things sold by competitors and my chosen price.

This is a price list for my café and my other competitors. The price list shows that my café’s prices are the lowest and the reason I have is to set these prices is because I’m are using penetration pricing – means deliberately set at low level to gain customer's interest and establishing a foot-hold in the market, and I used physiological pricing means designed to have a positive psychological impact from the customer and also they are entering the new business. These kind of pricing strategies help me to gain more customers coming at my café; I’m gained information on the quality, range of products and services and their strengths and weaknesses. I’m going to analyse this information that will allow competing with my competitors successfully.

As I will be competing with my established competitors I will try to compete and be strong in the areas where my competitors are weak.

My aim is to provide the best possible quality of service that none of my competitors provide now. This will include:

Easy access toilet in the shop
Menus on all tables
Allowing customers to pay before or after they finish their food and drinking coffee
Giving time for customer when choosing what to eat and what they drink a coffee

Promotion

The most common type of promotion is advertising; it is the best way to communicate with potential and existing customers. It encourages customers to purchase the product or services. Advertising my products and services will help create demand for my café and will be recognised in the market. This includes advertising, personal selling (e.g. attending exhibitions), sales promotions (e.g. special offers), and atmospherics (creating the right impression through the working environment).

Advertising is also an important factor and I have used above the line promotion therefore adverts have been placed in the local newspaper, the Yellow Pages, computer magazines and on the Internet. Also a flyer has been designed to distribute to the local public.

Special offers are an essential part of my Internet café because offers such as buy one get one free and 20% off attract the customer as they will be saving money. I think introductory special offers are important because first impressions are crucial. They could influence repeat purchases and recommendations to other potential customers. The offers are displayed in full view of the customer, in the shop window to entice passers by.

The main aims of promotion are to persuade, inform and make people more aware of the restaurant, as well as improving sales figure.

On this section, I am going to bullet point my target audience with their ages and life standard:

Age: 30-70 years old ( Middle class group)
Gender: Both male and female
Mostly people in working class.

These are the main target people of my cafe. They will develop more awareness on the promotions that I’m doing.

So far from my research I have concluded that I will be aiming my product at middle age group of people (adult). So through promotion I will be looking to do offers on my product within the first month. This will be buy 2 get 1 free, this is so I still make a profit and create customer awareness. However, my main promotion technique will be through an advertising campaign on leaflets and a small billboard. I will be giving a leaflets people walking in town centre where my business is located and put in door to door because to know this people that there is a new café business in Birmingham centre.

My cafe would not advertise on TV because it is very expensive. I have £1000 budget for promotion on the first month of operation. Sales promotion is designed to encourage new and repeat sales. Loyalty cards, free gifts, competitions and voucher schemes are the most popular. Promotion covers all the different ways a business can communicate with its customers. Promotion is classified as following:

Advertising – I will be using advertisement to promote my business. I can advertise by using small billboards and posters that will be posted around certain area which is town centre in Birmingham and places nearby. There are many people walking around or with cars on these areas so the advertisement is noticeable. People in working class usually travel in Birmingham city.
Direct Marketing – the main target for promoting are the people in working class with family. I want to direct the promotion to them because these are the people that can be loyal to my café.
Sales Promotion – I am planning to offer some good promotions to my customers to earn their loyalty. Every end of the month, customers can have a free set of coffee and other beverage when they order worth £10 to 20 and up. This is a good incentive because it is attractive to them.
Public Relations – I can advertise locally on the newspaper so people will be more familiar on my cafe. Newspaper advertisement is a very effective way of promoting because all people read newspaper.
Sponsorship – this is an expensive form of promotion and not much included on my business promotion. However, my cafe can sponsor for charity works, small football teams and events that wants to be sponsored. This can also increase the familiarity of people.

Competition

My business has got quite a few competitors over different areas in City centre in Birmingham but my service will be unique I will be providing more hot and cold drinks and other beverage such as cakes and sandwiches and better offers than any other competitor. In task I will investigate the market and find out what the majority of people will want from their café shop and how many consumers they are willing to pay for the service I am providing. This information will be found out by questionnaires and once they have been filled in I will present the results in a graph to make them easier to understand and make better judgements.

Competitive Strategy
There are three major ways in which we will create an advantage over our competitors;