Starting a new business - marketing
Contents
Contents Page No.
Action Plan 2-5
Introduction
.1 Marketing Definition 6
.2 Business Ideas 6
.3 Background Research 6
.4 Factors affecting success 7
2 Market Research
2.1 Sources of Market Research Information 8
2.2 Customer Questionnaire Design 8-9
2.3 Analysis of Questionnaire Results 9-11
2.4 Competitor Analysis
2.4.1 Competitor 1 11-12
2.4.2 Competitor 2 12
3 Marketing Campaign
3.1 Promotional Methods 13
3.2 Advertising Methods 13-15
3.3 Costings 15-16
3.4 Legal Contraints 16
4 Conclusions and Recommendations 17-18
5 References 19-20
6 Appendices
6.1 Appendix 1 - Draft advertisement 21
6.2 Appendix 2 - Customer Questionnaire 22
6.3 Appendix 3 - Competitor Secondary Research (Costa coffee) 23-24
6.4 Appendix 4 - Competitor Analysis 1 (interview questions) 25
6.5 Appendix 5 - Competitor Analysis 2 (interview questions) 26
Action Plan
What do I need to do?
When? (Date)
What Information do I need?
Where will I find the information?
Alternative Sources?
Changes to Plan
Action Plan
- Fill in 'What do I need to do?' and 'When?' coloumns for Action Plan, Introduction and Market research.
In Monday 1st March lesson
A plan for each lesson of my project
Looking through coursework plan.
No alternative sources.
Not all finished. 'What do I need to do?' and 'When?' columns not completed for Market Research
- Complete the 'What do I need to do?' and 'When?' columns
In Wednesday 3rd March lesson
A plan for each lesson of my project
Looking through coursework plan.
No alternative sources.
Completed work set for today started tomorrow's work.
- Complete all other columns of the action plan
In Thursday 4th March lesson
A plan including where I will find the information I need
Looking through coursework plan.
No alternative sources.
All work completed
Introduction
- What does 'Marketing' and 'Marketing campaign' mean?
- What factors need to be considered when planning a marketing campaign?
In Monday 8th March lesson
Definitions for 'Marketing' and 'Marketing Campaign', the factors needing to be considered by companies when planning a marketing campaign.
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books, my own business studies exercise books.
A little bit more work needed to be done on the second bullet point in next lesson. Reference page started which will be filled in as I use sources
- What type of retail business are you going to set up?
- Which customer segments are you targeting your business towards?
In Wednesday 10th March lesson
Need to find a type of company I would like to study and set up a similar business to. Look at the customer segments I'm aiming my business towards.
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books, my own business studies exercise books, yellow pages/ Thompson directory
Completed these two sections and started the two sections needed for next lesson. Will look over the work from today and improve it in next lesson.
- What factors will affect the success of your business? (at least 2 must be discussed, not just stated)
- What information will you need to find out before you open the business?
In Thursday 11th March lesson
Look at factors which affect business success. Look at how businesses start up and what information they need to know first such as law.
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books, my own business studies exercise books.
Completed this work and started Market Research section (completed first two bullet points)
Market Research
- What is the purpose of Market Research?
- What is the difference between Primary and Secondary research?
- Critically compare different market research methods and suggest when each method would be most appropriate.
In Monday 15th March lesson
Explain purposes for market research. Definitions for Primary and Secondary research plus differences. Compare different market research methods & where each would be useful.
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books, my own business studies exercise books.
Completed this work and started my questionnaire.
- Design a questionnaire to find out about your target market
- Why have you chosen to carry out a questionnaire? (Why will it be useful?)
- Describe the different ways you could PRESENT the information from you questionnaires (e.g graph/table)
In Wednesday 17th March lesson
Questions for my questionnaire and a professional layout. Advantages of using a questionnaire. A list of different ways to present information
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books, my own business studies exercise books.
Completed this work and started getting people to fill in my questionnaire
- Record & illustrate the results of your questionnaire (use tables, texts, graphs)
- Summarise the results of your market research - is it the same or different from the results you expected?
In Thursday 18th March lesson
The information from my questionnaire, a summary of what the results show.
My previous work on the questionaire
Look through my business studies exercise book at previous questionnaire summaries done in lessons.
Questionaire not compete yet, instead I wrote up my interview ready to conduct before next lesson
Competitor Analysis
- Make a plan of interview ready to interview a shop similar to the type you have chosen.
In Monday 22nd March lesson
A set of questions ready to ask a shop
Sample interview questions in coursework plan
AS Business studies textbooks, Marketing books, my own business studies exercise books.
Interview already planned and conducted. Instead I recorded the results from questionnaire and interview.
- Interview shop either by phone or by visiting them.
- Write down everything they say.
For homework between Monday 22nd March lesson and Wednesday 24th March lesson
Need pen and paper ready to record everything they say
From the shop either by phone conversation or directly.
No alternative sources
Already done on Thursday 18th March.
- Write up in lesson what the shop has said.
In Wednesday 24th March lesson and Thursday 25th March lesson
Need the information I have recorded from the interview
My recorded conversation information
No alternative sources
Wednesday - wrote up results from questionnaire
Thursday - completed this task
Marketing Campaign
- What is the purpose of the PROMOTION part of the marketing mix?
- What is the difference (at least 2) between above the line and below the line promotion?
- Discuss the methods of advertising and promotion your business could use (which methods would be most/least appropriate for you type of retail business?)
In Monday 29th March lesson
Definition and explanation of promotion, plus why it is important. Information about above the line and below the line promotion. Methods of promotion with definitions and why they would/wouldn't be appropriate
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books, my own business studies exercise books.
Completed first two bullet points.
-Find out the COSTS of different advertising methods available to you
In Wednesday 31st March lesson
Look at websites for: Local radio, MK web, The Citizen newspaper, Thomson Directory, Yellow Pages, TV etc to find prices for advertising
Telephone or email some of the companies who provide advertising.
Finished last lesson's work and got a few costs (MK web, Citizen and Yellow pages)
- What does the Advertising standards authority do?
- How will the ASA Code of practice affect how you advertise your business?
- Is there any other legislation (laws) that you need to be aware of?
In Thursday 1st April lesson
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books.
Completed last lesson's work and this lesson's work
Conclusions
- How are you going to advertise/promote your business? (at least 2 methods)
- For each idea, describe at least 2 strengths/ 2 limitations of it and make 2 decisions about how it will be done.
In Monday 19th April lesson
Two methods of promotion suitable for my business. Strengths and limitations of them and decisions about how it will be done.
'Huggett' GCSE business studies textbooks
AS Business studies textbooks, Marketing books, my own business studies exercise books.
Completed in lesson
- Why have you chosen these advertising/promotion methods for your business?
- Which parts of your research helped you to decide how to promote the business?
In Wednesday 21st April lesson
Look at the strengths and weaknesses previously done to say why I chose the ones I did. Look at other methods and say why I haven't chosen them. Look back at questionnaire and interview to say how I decided these methods.
Previous work within the coursework.
'Huggett' GCSE business studies textbooks,
AS Business studies textbooks, Marketing books, my own business studies exercise books.
Completed in lesson
- Suggest at least 2 improvements you could make to the overall Marketing Campaign
- How would these improvements help the business in the long-term?
In Thursday 22nd April lesson
Look at my overall marketing campaign and how certain improvements could help the business
My previous work on the coursework, looking especially at the Marketing Campaign
'Huggett' GCSE business studies textbooks,
AS Business studies textbooks, Marketing books
Completed in lesson
Final Checks
- Type up the REFERENCES page
- Check that each section of the report has ...
This is a preview of the whole essay
- Suggest at least 2 improvements you could make to the overall Marketing Campaign
- How would these improvements help the business in the long-term?
In Thursday 22nd April lesson
Look at my overall marketing campaign and how certain improvements could help the business
My previous work on the coursework, looking especially at the Marketing Campaign
'Huggett' GCSE business studies textbooks,
AS Business studies textbooks, Marketing books
Completed in lesson
Final Checks
- Type up the REFERENCES page
- Check that each section of the report has a numbered heading
- Add page numbers to the final document
- Add appendices and number them
- Type up a contents page
Design a front cover.
By Friday 7th May 2004
All the the text books, websites and other references I have used.
I will create a references page document from the start which I will add to as I use more and more books.
No alternative sources.
Completed in further extension lessons before the deadline date.
. Introduction
.1 Marketing Definition
It is very difficult to find an exact definition for marketing that everyone agrees with. The Collins Gem English dictionary defines it as the, "Part of a business that controls the way that goods or services are sold". Peter Drucker of the Management Guru says that, "Marketing is not a function, it is the whole business seen from the customers' point of view". There is also no specific definition for a marketing campaign. The Collins Gen English dictionary says that a campaign is a, "series of coordinated activities designed to achieve a goal". My personal definition of a marketing campaign is based on the definitions I have found: a series of coordinated activities designed to achieve a goal, based on the part of a business that controls the way goods and services are promoted and sold using the customers' point of view.
.2 Business Ideas
The factors needing to be considered when planning a Marketing campaign are basically to do with the 'four Ps' in the Marketing mix; Product, place, pricing and promotion. The reasons for this are defined here:
* "Product, which must be differentiated from its rivals' products
* Price, which must be low enough to be competitive
* Promotion, which is how customers will hear about the product
* Place, which is where the customer will find the products and how they will be distributed to them."
(Huggett Business Studies GCSE textbook, 4th edition, 2001)
If these factors are not considered carefully, it is likely that the marketing campaign for the business will fail.
The type of business I've decided to set up is a coffee shop in the style of a 1950s diner which will be located within the Centre MK. I have chosen this because I think that there is a niche in the market for a new type of coffee shop. The Centre MK already has many coffee shops, but most of them are very similar in style. My coffee shop will include bright colours, a pop-art theme, chrome interior designs, guitars hanging from the walls and music from the 1950-1990s will be played. The customer segments I'm mostly targeting my business towards people of all ages who are shopping in thecentre:mk (possibly groups of friends or families).
.3 Background Research
Before opening the business a lot of information needs to be found out in order to have success. I will have to do some primary market research to find out what customers want from a coffee shop in terms of product, price and possibly place. I am planning to conduct a questionnaire to members of the public to find out what potential customers want from a coffee shop and to interview one or two existing coffee shops to find out what sorts of things my business could include. I will also have to conduct some secondary market research to find out the different ways I could advertise, and how much each one costs. This could be done using books or the internet. I will have to look at all of the different means of promotion in terms of how much they cost and how effective they would be for my company.
.4 Factors affecting success
The main factor that will affect success within my business is surrounding competition (will similar local businesses have better appeal to customers?). This is based on the Marketing mix (four Ps). If other businesses have better products, or if they have lower prices, more effective promotion techniques or are located in a more appealing place customers will choose to go to their coffee shop instead. This is why so much information needs to be researched before setting up the business to ensure that competition issues against my business will not occur.
2. Market Research
2.1 Sources of Market Research Information
Market research is defined as the "systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services". (American Marketing Association (1960), taken from 'Marketing principles and practice' edition three, 1998). Market research is conducted by companies in order to succeed. It is important for two main reasons:
* To find out what the customers or potential customers for the business want in terms of product, price, promotion and place.
* To find out what other similar businesses are doing, and how to compete with them (eg. Finding out how much they are charging, and offering a better price).
There are two main types of Market Research: collecting Primary data and Secondary data. Primary data (often referred to as field research) is "obtained by using one or more of the following four market research techniques: observation, surveys (interviews), projective methods, experimentation". (Marketing principles and practice, edition three, 1998). Secondary data (often referred to as desk research) is "Information which already exists due to other people's research. It is collected by desk research, for example reading documents." (Huggett Business Studies GCSE textbook edition 4, 2001).
Different Market research methods are appropriate at different times. Both primary research and secondary research have good and bad points. The main advantages of primary research are that it's reliable and up to date and speaks directly to the customers. Disadvantages are that it can be expensive and it is hard to make sure that the information is reliable. Advantages of secondary research are that it is cheap and easier to carry out. Disadvantages are that it is not very accurate because it doesn't necessarily speak directly to customers and may not be very up-to-date. A mixture of the methods is the best way to carry out research. This is what I aim to do.
2.2 Customer Questionnaire Design
I have chosen to carry out primary research because I want to speak directly to my potential customers and I feel that primary research is the most reliable and up-to-date way of finding out what they want. I have chosen to carry out a face-to-face questionnaire with members of the public because I feel that this will have a high response rate and will be cheaper than carrying out postal or telephone surveys. This questionnaire will be useful for me to find out what the people of Milton Keynes want and using the information I receive I will be able to display my findings. I will show my questionnaire findings in result tables, bar charts and pie charts to show the percentage/amount of people that have chosen certain results. I will question at least 30 people because I feel that this is a high enough amount to analyse and will provide me with reliable data. I will be asking people from all over the place, I will question some people in school (teachers and pupils), some outside Walnut tree local centre and some within thecentre:mk. This will provide me with a varied sample. I will use mainly closed questions (where there is a choice of answers) because this makes it easier to show the results in tables and graphs afterwards. A disadvantage of using closed questions is that it is sometimes thought that this is like putting words into the person's mouth, or making their decisions for them. To avoid this, I will allow a space for the person to make their own decision if I have not specified it in my choice of answers.
2.3 Analysis of Questionnaire Results
I questioned 30 people in a few different locations (outside Tesco express, walnut tree, thecentre:mk, in school, friends and family). The people I questioned were of a varied age range, although there were more people aged 16-25 than any other age range (see figure I), which could make my results slightly biased.
Figure I - shows the ages of the people I questioned.
The results from my questionnaire are very useful as they have given me a lot of information. To show me whether or not it was worth opening a coffee shop with food facilities, I asked people, "When you visit thecentre:mk do you ever stop for a cup of coffee/something to eat?". My results showed that the majority of the people I asked said yes (See figure II), proving that coffee shops are popular.
Figure II - shows whether or not people stop for a cup of coffee/ something to eat when they visit thecentre:mk
To outline who my competition will be, one of my questions was asking which places people often stop to eat or drink in. This was a multiple choice question, but had an 'other' box for people to name their choice, and a few people did choose this option, naming their preferred choice. This question could be answered as many times as necessary by the person being questioned, so it wasn't necessarily one answer per person. The results from this question showed that my main competitors would be Costa coffee and Mc Donalds (See figure III). Using this information I could choose to interview one of these businesses and find out what techniques they use in order to have success. This would help me because I could use the same techniques as them in my business.
Figure III - shows where people visit to eat or drink at thecentre:mk
Next, I asked people to describe what they thought of the coffee shops in thecentre:mk. Again, this was a multiple choice question (but included an 'other option, although no-one chose to use this), and again people could answer as many times as necessary. The choices I included were based on the amount of coffee shops, their style and their prices. My results showed that the coffee shops are too expensive and too similar in style (See figure IV). With this information, I can choose to make my new coffee shop completely different to others in style (which it will be, seeing as there are no others in style of a 50's diner), and I will have to make prices competitive.
Figure IV - shows people's thoughts on the current selection of coffee shops in thecentre:mk
I wanted to know whether or not people would be interested in my idea of opening a coffee shop in the style of a 50's diner, so I asked this in my questionnaire. My results showed that most people would be interested (see figure V) showing that my idea should be carried out, as it would appeal to people.
Figure V - shows how many people would be interested in the opening of a new coffee shop in the style of a 50's diner.
2.4 Competitor Analysis
I wrote up an initial interview with questions that were specially formatted in order to find out what I needed to know about the companies I was interviewing. I did both of my interviews by telephone. The first interview was conducted on 18th March 2004 and was with Andy - the assistant manager of Costa coffee, thecentre:mk (competitor 1). The second interview was done on 24th March 2004 and was with Kaisha Morris - the assistant manager of The end bar, thecentre:mk (competitor 2). Although I was hoping to have three competitors to analyse, unfortunately this was not possible as other companies that I called said that they were unable to participate in research related interviews.
2.4.1 Competitor 1
Looking at the secondary research I found on the Costa coffee website (www.costa.co.uk), I found that the franchise offers a fair trade coffee option on all of its coffees. I also found that they claim to make the "perfect cup" of coffee. In the primary research (interview) I found out about the company's marketing mix (price, promotion, place and product), and also about their aims and objectives. Costa coffee's main aims and objectives are to make £10million pure profit each year. Their product, as well as selling a range of drinks and snacks, is "an excellent staff training programme" (Andy - assistant manager of Costa coffee). When asking them if they thought that their location (place) was important they said that it was 100% important. The branch that I chose to interview is located near the department store John Lewis, and they said that this is where they feel that their business comes from. They especially notice this on Mondays, when they have no business. They believe this is because it is the day when John Lewis is shut. Another issue in discussion was pricing. They say that the opening of a similar business nearby would make them, "check out their prices and compete against their services" (Andy - assistant manager of Costa coffee). Costa coffee doesn't tend to use advertising methods for promotion, but do offer, "Free samples of food about once a month. The coffee sells itself so free samples of coffee aren't necessary" (Andy - assistant manager of Costa coffee). From this information I have learnt that location, and competition are important things to consider when opening a coffee business. Promotional methods aren't necessary because the products tend to sell without using these.
2.4.2 Competitor 2
The End bar has a fairly different attitude towards their customers and why they have success. Their main aims and objectives, unlike Costa coffee's money related aims and objectives were to "To achieve a well run business, good staff and atmosphere, quality food" (Kaisha Morris - assistant manager of The End bar). They feel that the main service that they provide is being the only bar in thecentre:mk where people can smoke. This could be possibly something some people would find to be a bad point of the business. They feel that location is very important in success because in their case, being in a busy shopping centre location, "People just walk past and see it" (Kaisha Morris - assistant manager of The End bar). The End bar feels that the opening of a similar business wouldn't necessarily affect their success because they have regular customers who come in everyday, although they would compete against a similar business's prices. The End bar, surprisingly, use no promotional methods at all, they don't advertise or have special offers.
3. Marketing Campaign
3.1 Promotional Methods
Promotion can be outlined using the AIDA model. The Financial Times 'Marketing principles and practice' edition 3 (1998) describes the stages of promotion using the AIDA model as:
"Attention - Gain attention of the audience.
Interest - Kindle interest in the product/service on offer.
Desire - Arouse desire for your product above any desire for your competitor's product.
Action - The customer buys the product".
The purpose of promotion is to gain awareness from your potential customer and persuade them to buy your product or service. There are two main types of promotion, above the line and below the line. Above the line promotion is through independent media, such as the TV or newspapers. It does not involve the company directly contacting their potential customers. Examples of above the line promotion are: television, radio, cinema, the internet, newspapers. Below the line promotion is promotion through other methods which the firm has direct control over. It involves the potential customer being directly contacted. Examples of below the line promotion are: exhibitions and trade fairs, handbills, direct mailing.
3.2 Advertising Methods
My coffee shop business could use a range of methods for advertising and promoting. When interviewing coffee shops (Costa coffee and the end bar), I found that Costa coffee often gave out free samples of their food, but the end bar used no promotional methods because they feel that it is unnecessary. I don't feel that as a coffee shop many promotional methods are needed, because coffee does tend to sell itself in a busy shopping centre location, but here is a list of possible advertising methods I could use:
Method of advertising
Advantages / why would they be appropriate for my business?
Disadvantages / why would they be inappropriate for my business?
Free samples
Cheap because not much is given away, If people enjoy what they have tried they will come back regularly, if they think that the company are after pleasing their customers by giving away things for free, they are more likely to go back and 'return the favour' by buying their products.
If people don't enjoy what they have tried for free they are even less likely to go back than if they hadn't tried it in the first place.
Posters
Most groups covered, if close to shop could encourage impulse buyers, seen every time the person walks past, can put poster right near the coffee shop so that target audience will see it, weather will not damage it as it could be placed within thecentre:mk, colour techniques possible.
Can't put too much information on effectively
Radio
Cheap, most groups covered, use of sound
No visual techniques can be used, may be seen as annoying because it's interrupting music, not necessarily getting target audience (people in thecentre:mk)
Television
Can attract attention and have a massive impact, can demonstrate the shop in use, vast audience.
Very expensive, may not necessarily remember the advert when visiting thecentre:mk, not necessarily getting target audience (people in thecentre:mk)
Magazines
Colour techniques possible, can reach target audience with specialist magazines.
No movement or sound, a long time between advertisements being placed and magazine being printed.
Internet
Cheap, easy to set up, number of views can be shown, can be aimed at target audiences, can be changed
Limited audience, technical problems are always possible, not necessarily getting target audience (people in thecentre:mk)
Regional newspaper
Better than national newspapers because the coffee shop will be local, not national so target audience is more likely to be reached
No movement or sound, more expensive than national newspapers (in terms of cost per reader), may be poor quality, not necessarily getting target audience (people in thecentre:mk)
National newspaper
Relatively cheap, national coverage so more people will read than a regional newspaper
No movement or sound, usually only black and white colours, there's usually so many adverts that many go un-noticed, not necessarily getting target audience (people in thecentre:mk)
I feel that the most appropriate advertising methods for my type of retail business would be free samples and posters. These would not only grab the target audiences' attention (target audience being people walking around thecentre:mk) and encourage them to go into the store (posters), but once they had entered the store they could try out the free samples and be tempted to buy food and drinks. These methods are also not too expensive.
3.3 Costings
I have researched how much various places charge for advertising.
MK Web (Milton Keynes' website)
MK Web charge £100 per month for any of the options below.
Banners - guaranteed to be viewed on a minimum of one in every 6 pages.
Square buttons - guaranteed to be viewed on a minimum of one in every 3 pages.
Rectangular buttons - guaranteed to be viewed on a minimum of one in every 3 pages.
Panel advertising
Advert is permanently displayed on the home page of one of the following section.
Business directory, restaurant guide, accommodation guide, pubs and clubs guide.
This includes a link to a full advertorial containing up to three pictures and 250 words of text. Ideal for a business who wishes to target the audience attracted to a specific section. Limited availability.
Milton Keynes Citizen Newspaper
Milton Keynes Citizen is a local newspaper to Milton Keynes. They have a variety of advertising options and rates including leaflets.
Leaflets
£17.50 per 1000 leaflets (up to A4 size)
Run of paper
£11.15 per advert per week
Yellow Pages
The Yellow pages also offer a range of advertising options. The prices range from £28 - £8991 in the Bedford/Milton Keynes area for publication in April 2005.
3.4 Legal Constraints
The ASA (advertising standards authority) is "the independent, self-regulatory body for non-broadcast advertisements, sales promotions and direct marketing in the UK" (www.asa.org.uk). They claim to "ensure that advertisements are legal, decent, honest and truthful".
The ASA Code of Practice is basically the laws that have to be followed legally in advertising. They will affect how I advertise my business because I will have to follow their rules and regulations in order for my advertising to be legal. There are many rules on advertising but a few examples of the rules that the ASA enforce are:
* "All marketing communications should be legal, decent, honest and truthful"
* "Any stated price should be clear and should relate to the product advertised. Marketers should ensure that prices match the products illustrated."
* "No marketing communication should mislead, or be likely to mislead, by inaccuracy, ambiguity, exaggeration, omission or otherwise."
(Points taken at random from the "CAP Code" on www.asa.org.uk)
There are other laws that my business will need to be aware of. Here is a list of them, taken from the Huggett Business studies GCSE textbook edition 4 (2001):
* "1968 Trade Description Act - stops businesses giving a false or misleading description of goods or services.
* 1970 Equal pay act - says men and women should receive the same pay for the same work or work of equal value.
* 1973 Fair trading act - sets up Office of fair trading.
* 1974 Consumer credit act - protects people who buy on credit.
* 1974 Health and safety at work act - requires employers to provide safe premises and healthy working conditions.
* 1975 Sex Discrimination Act - makes sex discrimination illegal.
* 1976 Race relations act - make it illegal to discriminate on grounds of race, or colour, or ethnic origins.
* 1987 Consumer Protection Act - makes businesses liable for any damage caused by defective goods.
* 1994 Sale and Supply of Goods Act - says all goods must be safe, durable and free from defects.
* 1995 Disability Discrimination Act - makes big firms treat disabled people no less favourably than other employees.
* 1995 Environment Act - controls pollution of land, air and water.
* 1998 Competition - makes anti-competitive agreements between firms illegal
* 1999 Employment Relations Act - makes trade union recognition easier and improves parents' rights."
4. Conclusions and Recommendations
I have chosen these methods to promote/advertise my coffee shop retail business:
Free Samples
* Advantages - free samples wouldn't cost much to the business, if the potential customers like what they are trying they will come back for more.
* Disadvantages - if the potential customers don't like what they try they are less likely to visit the coffee shop than if they hadn't tried the sample in the first place, people could try the samples for the sake of it without any intention to make a purchase.
* A person will stand close to the coffee shop giving out the free samples (there will be two samples at any one time, one a type of drink and one a snack). They will then explain about the coffee shop and show the potential customer where it is located.
* I chose this promotional method because it fits in excellently with the marketing mix. It promotes the product close to the place where the business is located and introducing members of the public to the prices. This method is below the line promotion, because it involves direct interaction with the potential customer.
Posters
* Advantages - poster can be put right near to the coffee shop to reach the target audience, the weather wont damage it because it can be put inside thecentre:mk, encourages impulse buyers.
* Disadvantages - can't put a lot of information on posters effectively (people get bored when too much information is disclosed), people could walk straight past posters without noticing them, a very specific location will need to be found where most people will see it.
* I will put up a large coloured poster which is of a cup of coffee in a brightly coloured mug on top of a retro style stall. It will say something along the lines of "New 50's diner coffee and refreshments cafe, located next to Marks and Spencers. Eat. Drink. Enjoy! (Without breaking your budget!)" The writing will be in a multi-coloured font and will curl around the coffee mug to grab attention.
* This promotional method also complies with the marketing mix. It is promoting the cup of coffee (product), telling the customer where to go (place) and telling them that it's not expensive (price). This method is above the line promotion, because it doesn't go directly to the potential customer (such as direct mailing, exhibitions and trade fairs).
Quite a few parts of my research helped me to decide how to promote my business:
* My questionnaire results - when I asked people to describe the coffee shops within thecentre:mk, the majority of people said that they were too similar in style and too expensive. Therefore, within my poster advertisement I have included the fact that my new coffee shop is different in style to most, and that it is cheap.
* When interviewing Costa coffee, they said that they don't tend to advertise but do offer free samples about once a month. Seeing as Costa coffee appears to be a popular coffee shop, with 26% of the people I questioned saying they visit it regularly, I thought it would be a good idea to use similar promotional methods to them.
* I chose to use methods that would be situated close to the location of the coffee shop so that I could reach my target audience effectively. I didn't use methods such as the radio, newspaper and television because these are less likely to reach my target audience.
* The prices which I researched for MK Web, Citizen Newspaper, and Yellow pages seemed expensive for a type of advertising that I didn't feel would be effective for my type of business.
Improvements
I am convinced that the advertising methods I have chosen to promote my business are suitable for the type of business I am opening, and will encourage customers to visit my coffee shop and purchase my products. However, in the future I may want to make improvements to these methods and perhaps change them due to a change in circumstances. At the moment my aim for the near future is to make customers aware of my coffee shop and make them visit it. If my aim is accomplished, and the business has success, I may want to expand my advertising methods in the future. I may want to start advertising in the local newspaper or sending direct mailing to people around Milton Keynes, perhaps including special offers. This would help the business in the long-term because it would expand my target audience to be not only people who are already in thecentre:mk. It would also help the business to achieve profit-maximisation. Another thing I could choose to do if my business has success is to open another store, either somewhere else in Milton Keynes or in another town or city. This would create a chain, which would have brand-name loyalty to customers. It could take a long time before improvements such as this happened. This improvement would help the business in the long-term because it would help with achieving profit-maximisation. The possibilities are endless when talking about expanding the business in the future, but for a starting-up business I am happy that the promotion methods I have chosen to carry out will help my business to mature, ready for these developments.
5. References
BOOKS
Collins Gem English Dictionary (2003)
* Defines the term marketing as, "Part of a business that controls the way that goods or services are sold." (Introduction - 1.1)
* Defines campaign as a, "series of coordinated activities designed to achieve a goal. (Introduction - 1.1)
Huggett Business studies GCSE textbook edition 4 (2001)
* Explains why the four Ps in the marketing mix are important. (See Introduction - 1.2)
* Definition for Secondary Data, "Information which already exists due to other people's research. It is collected by desk research, for example reading documents." (Market Research - 2.1)
Financial Times 'Marketing principles and practice' edition 3 (1998)
* Defines Market Research as "systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services". (American Marketing Association, 1960) (Market Research - 2.1)
* Says that Primary data is "obtained by using one or more of the following four market research techniques: observation, surveys (interviews), projective methods, experimentation". (Market Research - 2.1)
* Describes the stages of the AIDA model as:
"Attention - Gain attention of the audience.
Interest - Kindle interest in the product/service on offer.
Desire - Arouse desire for your product above any desire for your competitor's product.
Action - The customer buys the product". (Marketing Campaign - 3.1)
PERSONAL QUOTES
Peter Drucker of the Management Guru says that, "Marketing is not a function, it is the whole business seen from the customers' point of view."
WEBSITES
Costa coffee website (www.costa.co.uk) for secondary research on the company before interviewing them.
MK Web website (www.mkweb.co.uk) for research on advertising pricing (Marketing Campaign - 3.3)
Milton Keynes Citizen newspaper website (www.mkcitizen.co.uk) for research on advertising pricing (Marketing Campaign - 3.3)
Yellow Pages website (www.yellgroup.com/802569EA00621809/Pages/yellowpages) for research on advertising pricing (Marketing Campaign - 3.3)
Advertising standards authority website (www.asa.org.uk) for information on what the ASA do and examples of some of their rules (Marketing Campaign - 3.4)
PERSONAL INTERVIEWS
Andy - assistant manager of Costa coffee, thecentre:mk (interviewed on 18th March 2004 at 18:00)
Kaisha Morris - assistant manager of The End bar, thecentre (interviewed on 24th March 2004 at 16:10)
6. Appendices
6.1 Appendix 1 - Draft advertisement
7.2 Appendix 2 - Customer Questionnaire
. How old are you (please tick)?
* Under 16
* 16 - 25
* 26 - 40
* 41 - 50
* Over 50
2. How often do you visit thecentre:mk?
* More than twice a week
* 1-2 times a week
* Once a fortnight
* Once a month
* Less than once a month
3. When you visit thecentre:mk do you ever stop for a cup of coffee or something to eat?
* Yes (go to question 4)
* No (go to question 5)
4. Which of these do you often eat/drink in?
* Starbucks
* Costas
* Coffee republic
* Let's eat
* Mc Donalds
* Burger King
* The End
* Other (please specify) ...........................................
5. How would you describe the coffee shops in thecentre:mk? (tick as many choices as you find appropriate)
* There are too many coffee shops
* There are not enough coffee shops
* All of the coffee shops are too similar in style
* The range of coffee shops is reasonable
* All of the coffee shops are too expensive
* The prices of coffee shops are reasonable
* Other (please state).......
6. Would you be interested in the opening of a new coffee shop/café in the style of a 50's diner?
* Yes
* No
7. Where would the best place be for the opening of this new coffee shop (eg. Near Marks and Spencers, Midsummer place, Near John Lewis)?
......................................................................................................................................................................................................................................................
8. What is your annual income?
* Less than £15,000
* £15,000 - £20,000
* £20,000 - £30,000
* £30,000 - £40,000
* £40,000 +
* Still in full time education
7.3 Appendix 3 - Competitor Secondary Research (Costa coffee)
Everything on this page was taken from the website for Costa coffee (www.costa.co.uk 18/03/04) I'm using it to help me with creating my interview questions for my interview with Costa. This page is a summary (mostly in my own words) of what I have learnt about Costa coffee from the website.
Name of shop: Costa Coffee (franchise)
Type of shop/business: Coffee shop/café/restaurant
Where is the business located: 158 Midsummer arcade, thecentre:mk,
Telephone number: 01908 394 266
A brief history
* In 1971, Italian brothers Sergio and Bruno Costa started a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops.
* The brothers established Costa's unique roasting style. Beans were slow roasted at reduced temperatures to produce a fuller, less bitter flavour and a specially developed espresso blend was created of six parts arabica and one part robusta to create Costa's unique taste.
* The Costa brothers opened the first Costa store in London in 1978 and growth expanded at the rate of two stores per year with the help of their family and friends in the business.
* With huge growth over the 1990's the company had increased to 186 stores by 1999 and in 2000, 3.7 million cups of coffee were sold each week.
* Costa is now the leading UK branded coffee shop with over 300 stores and host units in a number of complementary retail outlets
Fairtrade
Costa coffee claim to offer a fair-trade coffee option on all of its coffees. In addition to ensuring that coffee growers always get a fair price no matter what the global market price is, Costa, through Cafédirect's Gold standard is also helping to invest and build the businesses and communities of its growers. Costa sales have helped fund major community projects such as road improvements in Uganda to allow easier and quicker tea deliveries to the factory (previously farmers had to walk up to 5 hours), and the funding of a women's association in Mexico providing courses on midwifery, the production of vitamins from local plants and child rearing.
Perfect Cup
Costa coffee claim to make the "perfect cup" of coffee. They include all of the information about how they do this on their website.
Franchises
Costa coffee is a UK franchise, UK corporate franchise and International franchise.
7.4 Appendix 4 - Competitor Analysis 1 (interview questions)
Telephone interview - Costa Coffee
Interview with Andy - assistant manager
8th March - 18:00
o What are the main aims and objectives of Costa Coffee?
- Our main aim is to make £10million pure profit
o Describe the range of goods/services you offer.
- We have an excellent staff training programme and up-sell everything
o Who is your target market for the business (consider age, gender, socio-economic groups, lifestyle, ethnic groups)?
- There is no specific target market. At Costa coffee we feel that we cater for everyone.
o How has the target market influenced the range of goods/services offered? (e.g. goods appealing to particular groups of consumers?)
- Not at all
o You're located in a busy shopping centre. How important is location in terms of your business's success?
Absolutely 100%. We're located next to John Lewis which is one of the biggest and busiest shops in thecentre:mk. We notice how important this is on Mondays especially when we have hardly any sales because John Lewis is shut on Mondays
o How could this business be affected by a similar business opening nearby? Would the business make any changes?
- As a business we would check out their prices and compete against their services.
o What types promotional methods does Costa coffee use and why?
- We don't tend to advertise but do offer free samples of food about once a month. The coffee sells itself so free samples of coffee aren't necessary.
7.5 Appendix 5 - Competitor Analysis 2 (interview questions)
Telephone interview - The End bar
24th March 04 - 16:10
Interview with Kaisha Morris - assistant manager
o What are the main aims and objectives of The End bar?
Profit just a well run business and good staff and atmosphere, quality food.
o Describe the range of goods/services you offer.
Services - only bar in the centre where you can smoke, offers cold and hot snacks hot and cold drinks
o Who is your target market for the business (consider age, gender, socio-economic groups, lifestyle, ethnic groups)?
Mixture, open early in the morning, so OAPs and young people
o You're located in a busy shopping centre. How important is location in terms of your business's success?
Very important, people just walk past and see it
o How could this business be affected by a similar business opening nearby? Would the business make any changes?
We have regular customers so the opening of a new business won't affect us too much, people come in everyday and know the staff. Price competition will affect us and obviously we would compete
o What types promotional methods does The End bar use and why?
Don't, just word of mouth. Don't do any promotion 'buy one get one free' offers or anything