Marketing plan for Sweet treats coffee

Marketing plan: Sweet treats coffee shop & bars

Sweettreats Marketing Plan

During the recent years, the restaurants industry has been met with great increases in both demand as well as offer. And the coffee shop sector has not been an exception. With a constantly increasing number of coffee drinkers driven by numerous and changing demands, the industry has been forced to develop and adjust to the new requirements. A new trend within the sector is that of opening multifunctional stores, in the meaning that aside from coffee-based beverages, these stores also offer a wide selection of soft beverages and even food. These stores are being referred to as gourmet coffee shops and a new gourmet coffee store to be opened is Sweettreats.

The Sweettreats coffee shop and bar will be a new and innovative concept which will bring together and serve the needs of different target markets. More precisely, during day-time, it will welcome adults and their children. The adults will be able to enjoy a hot cup of coffee and chat with their friends, while the children play safely in the Sweettreats' playground. The main idea of the coffee shop is to create a new place with an extremely welcoming ambiance where customers can enjoy themselves. Unlike other coffee shops which sell their coffee-based beverages to go, Sweettreats will sell them to be consumed in the store, while relaxing in a pleasant environment.

At night time, the family-like place will turn into a social gathering spot for young single people and couples, which will be able to socialize and attend the concerts organized by the bar.

Before actually opening the store, the managers at Sweettreats will have to clearly analyze the market, the trends, the demands forwarded by customers as well as the strategies implemented by the competition. Also, the company will have to develop and implement a wide series of strategies focused around their core competencies and the main features which differentiate Sweettreats from its competitors and ensure its success.

2. Situation Analysis

The situation analysis is a vital first step in developing a marketing plan as it defines the background, the environment and the characteristics of Sweettreats which are likely to ensure its success or which are prone to pose difficulties. A first step in defining the environment where Sweettreats will conduct business is the highlighting of the target market. Then, a SWOT analysis is required, followed by an analysis of the competition and the factors which differentiate Sweettreats from its competitors and increases its chances of success.

2.1 Market Summary

In establishing the target market, the company has to look at the products and services it offers and then identify those individuals or groups of individuals who are likely to consume the Sweettreats products and services. In this order of ideas, the coffee & bar's primary audience will be formed from families and single individuals.

2.1.1 Market Demographics

The market of coffee shops is formed from numerous individuals coming from all sorts of backgrounds and registering various levels of income. "Seventy-seven percent of U.S. adults drink coffee daily and gourmet coffee consumption has risen in the past five years. Coffee bar patrons are younger, more affluent, and educated and are 22% more likely to be aged 18-24. They are also 65% more likely to have an annual household income of $100K+. Coffee shop patrons are 28% more likely than the average American adult to be single and 70% more likely to have a post graduate degree. The average age of specialty coffee drinkers is 43. Occasional latte devotees are in the higher average income of $76,000, and similarly, cappuccino and espresso drinkers reflect an average income of $60,000" (Holmes, 2004).

Given the dual character of Sweettreats coffee and bar, it is only natural for them to address two different types of consumers.

Demographics primary target market will be formed from young families with little children and who like to got out for a cup of coffee with friends. The individuals within this segment will be able to enjoy a nice morning or afternoon at Sweettreats, while in the same time having their children around, safely playing in the store's playground. This target market is basically formed from young parents between the ages of 25 and 40. It is also true that grandparents can join the family or can even go by themselves at Sweettreats, action encouraged by the coffee & bar, but they do not represent a primary target market, but an extended one.

The second target market will be formed from single individuals who are outgoing and enjoy a nice evening out in the company of other single individuals, while in the same time enjoying a concert organized by the bar. The main characteristic of this audience will be the age interval of 25 up to 50.

Geographics

Sweettreats will be located in highly populated metropolitan areas and will be extremely easy to access. As such, the geographics of the target market are rather insignificant. To better explain, given the central location of the coffee & bar, the customers can easily be the individuals living in the vicinity as well as tourists or people just passing by.

Other factors highly used segmentation criterion for identifying the target market is the income realized by the audience. But since the prices implemented by Sweettreats will be lower than those implemented by the competition and affordable by anyone, and the setting and serving conditions will be impeccable so to satisfy the most refined tastes, the financial criterion will not be used to segment Sweetreat's market.

2.1.2 Market Needs

The needs of the target market can be divided into two categories, according to each of the two identified audiences. As such, the first target market, formed from young families, presents the need for:

family-like and pleasant environment where parents and children can spend time together the possibility to meet friends hot coffee drinks, beverages and snacks for themselves and their children

The needs of the second target market can be summarized as follows:

place of social gatherings where they can spend their evenings in a pleasant environment and meet new people the need to relax and listen to concerts

2.1.3 Market Trends

Sweettreats activates in the restaurants industry, particularly in the coffee shops sector. This industry is highly dynamic and the major intent of the shops is to increase the loyalty of customers. And coffee shops generally do this by diversifying their product palette, customizing and personalizing the sold products based on the particular requirements of their clients.

Another trend in the market is given by the fact that coffee shops "have become establishments where people are not only drinking coffee but also surfing the Internet, working from their laptops, or communicating with friends, family, and colleagues. [...] Offering free wireless Internet in coffee shops is sure way to boost success. People are now given the option to make a connection over a cup of coffee and/or over the Internet" (Holmes, 2004).

2.1.4 Market Growth

The market of coffee shops has been met with significant increases during the past recent years. And so has the number of operating stores in the coffee industry. For instance, in 1989, the United States was estimated to host a total number of 585 coffee stores. By 2003, this number had increased to 17,400, revealing as such as increase of 2,874% in 14 years (Ferguson, 2004) particular domain which has seen major growth is that of gourmet coffee shops - segment where Sweettreats also activates. The market does however seem to have grown as much as possible, reaching now its maturity. "The industry is maturing, and coffee shops like Starbucks and Gloria Jean's may need to expand their target demographics and better understand the purchase motivators of away-from-home coffee drinkers in order to fuel growth in the coming years" (Dawidowska, 2002).

2.2 SWOT Analysis

The SWOT analysis conducted on Sweettreats emphasizes the internal strengths and weaknesses as well as the external threats and opportunities which could easily affect the future success of the coffee & bar.

2.2.1 Strengths

Sweettreats possesses sufficient financial resources to afford to invest in founding and developing the coffee & bar

Sweettreats possesses skilled, qualified and committed personnel which will support their development

The dual concept and multiple functioning of the store (coffee shop, playground, singles' spot)

2.2.2 Weaknesses

Stweettrates possesses no previous expertise with coffee shops

The multiple purposes of the shop could generate more expenses than initially estimated

2.2.3 Opportunities

An increase in the number of senior citizens who drink coffee outside their homes. "Seventy-five percent of Americans between the ages of 55 and 64 drink coffee out, compared with 47% of 18- to 24-year-olds. Considering that this age group is the fastest growing segment, thanks to Boomers, some coffee shops may want to reconsider their target market" (Dawidowska, 2002)

Gourmet coffee shops are increasing in popularity

2.2.4 Threats

Fierce competition from long established and internationally renowned coffee shops, such as Starbucks

The primary market targeted by Sweettreats is formed from adults, but statistics show that the senior population consumes visits coffee shops more often; therefore, for the future, Sweettreats might have to change their approach

2.3 Competition

As stated before, the competition in the coffee shops industry has increased drastically during the past recent years. In 2003, the industry had registered total sales of over $6 billion (Ferguson, 2004). The top five competitors of Sweettreats would be: Starbucks, Nestle, McDonald's, Dunkin and Gloria Jean's.

Gloria Jean's is among the leaders of the industry and they basically address their products to the young population. The corporation is based in Australia but present in numerous countries of the globe through franchise contracts (Official Website of Gloria Jean's, 2008).

Dunkin Donuts is a U.S. based company, namely headquartered in Quincy, Massachusetts. In 2006, they registered annual revenue of over $4 billion. They address all types of consumers and sell a wide palette of coffee-based beverages and foods (Official Website of Dunkin Donuts, 2008).

Starbucks is the undisputed leader of the industry and in 2006 they registered annual revenues of nearly $8 billion (Official Website of Starbucks, 2008). They are headquartered in Washington and they operate all across the world. Most of their success is based on the brand-oriented marketing strategy.

Nestle is based in Switzerland but like most of Sweettreats' competitors, operates at international scale. The company sells a wide series of products, coffee being just one of them. Most of Nestle's products are designed for home consumption.

However McDonald's has developed their operations in the fast food industry, the latest tendency with their business strategy is to expand and cover new areas. One of these areas is that of selling coffee and by this they managed to address a new target market: the parents. Their needs were basically overlooked by McDonald's who only saw them as the parents of their main consumers.

2.4 Product Offering

Sweettreats will offer a wide variety of products, fit for all children, parents, single individuals and couples going to the evening bar. However the product offering could easily become even more diversified to fit the particular needs and requirements of their customers, the basic offering will consist from:

Coffee-based beverages

Sandwiches, panini wide variety of ice-cream, heavily decorated with sweet treats and fruits for kids

Pastry, chef master piece cakes, scones, etc. from all over the world, not just U.S. specific

Giant super-thin pancakes loaded with warm supreme chocolate, fruits, cream, etc.

During night-time, the shop will also sell alcohol-based cocktails with reduced concentrations and in limited quantities

The coffee shop will not sell tobacco products nor will it allow smoking.

2.5 Keys to Success

Swettreats's keys to success reside in its capability to differentiate itself from its competitors. In this order of ideas, a major aspect is given by the dual functionality of the coffee shop. Most competing stores only function as coffee stores during day time and close during the night. In addition, must bars are closed during the day and only function during the night. But Sweettreats has managed to efficiently utilize the same space so to retrieve revenues literally day and night. And this means that customers will be able to go to Sweettreats when ever they feel like it, without any time restrictions.

Another feature that will ensure the success of the new coffee & bar is given by the fact that it offers playground for the children. This resolves the problems of parents who want to meet their friends for coffee but do not want to leave their kids with a babysitter.

A third feature which differentiates Sweettreats from its competitors is given by the pleasant ambiance within the coffee shop. Aside other stores which simply sell the coffee for customers to drink on the street, Sweettreats offers a pleasant space where clients can relax and enjoy their order.

Other issues which increase Sweettreats' chances of success regard the wide array of products sold, including a wide variety of beverages and foods. Then, in comparison to Nestle or McDonald's, which commercialize multiple items, Sweettreats is based on offering only two major categories of products. This will make them better specialized. Starbucks and Gloria Jean's are then renowned for their high prices, but Sweettreats will offer similar quality products, but at significantly lower prices.

2.6 Critical Issues

Sweettreats will have to face up to the challenges posed by the industry and the market in regard to several critical issues. As such, the company officials will have to think of a way to perfectly harmonize the daily coffee shop with the night bar, without one affecting the other. For instance, they will have to be attentive for children not come in contact with the alcoholic cocktails served the night before. Then, they will have to hire skilled and capable personnel to attend to the clients and be willing to also work night shifts. The staff must be properly remunerated and motivated through a series of financial and non-financial incentives.

Another critical issue revolves around increasing the notoriety of the coffee & bar and attracting customers. Then, the store will have to increase loyalty of its customers through the implementation of clearly developed and efficient marketing strategies. This could be difficult to achieve even more when Sweettreats is a new and yet unknown brand and they might find it hard to gain the interest of consumers and the trust of the community.

3. Marketing Strategy

The marketing strategy encompasses all courses of actions taken by the organization in order to ensure they reach their stated goals. These goals have to be SMART, in the meaning that they must be specific, measurable, achievable, relevant and time-framed (Walesh, 2003).

3.1 Mission first step in identifying the marketing strategy to be implemented is that of clearly stating the company's mission. For Sweettreats, this is based on three features: satisfying the customers, respecting the employees and registering profits. The mission statement of the coffee & bar could be formulated as follows:

Sweettreats is committed to becoming a strong player in the coffee industry and offering our customers the best products at good prices, served by highly skilled and obliged employees. Through all these, we desires to register revenues which we will invest in the further development of Sweettreats and we will also support the development of the communities where we operate.

3.2 Marketing Objectives

The founders of Sweettreats are great coffee lovers and their wish is to create a place which will bring together coffee lovers and offer them the best beverages available. They also desire to foresee and satisfy the needs of their customers even before these become aware they have the needs. In addition, they wish to provide their customers with all the features take make up a perfect and pleasant setting, including, but not limited to the following:

Friendly small-town service

Good drinks and food

Fun and funky atmosphere set in an old house

Good location in the center of town

Pleasant mix of background music

Outside seating for sunny days

Frequent customer reward stamp-cards

Comfortable seating

Free Wi-Fi for getting work, business and emailing accomplished" (Jennrich, 2008)

Another objective is to make the most of the opportunities offered by the market. In this order of ideas, a study conducted in 2001 by the "National Coffee Association indicated that over 100 million people drink coffee on a daily basis and that nearly 60 million more occasionally consume coffee. Based on average drinking habits, the daily coffee drinker will consume multiple cups per day - totalling hundreds of millions cups of coffee being consumed every 24 hours" (Dream, 1997-2008). These statistics indicate large numbers of coffee consumers and Sweettreats has to implement proper strategies to attract them.

Directly linked with the need to attract customers is the marketing objective of getting to know the customers, clearly understanding their needs, wants and preferences in order to best address and satisfy them. Then, the product must be presented to them, in order to capture their interest even before the actual opening of the Sweettreats coffee and bar.

3.3 Financial Objectives

The main purpose of opening the coffee & bar, aside from creating a pleasant place for the members of the community, is to retrieve financial benefits. In this order of ideas, the company intends to:

Reduce operating and marketing costs starting with the second year of operating

End the first year with profits

Gradually increase annual sales revenues.

3.4 Target Markets

The primary target markets have been identified as being formed from young families with children who want to meet their friends in a pleasant ambience where they enjoy a cup of coffee while their children are safely playing nearby. The second target market, formed based on the second activity conducted by the store, is formed from single individuals and young couples, who wish to enjoy a nice evening out. A third potential target market could be formed from the senior citizens, which grow in terms of outside coffee consumption.

All marketing strategies will be adapted to the unique requirements of each target market.

3.5 Positioning

The positioning of the Sweettreats onto the market will be based on the main features of the bar and coffee. As such, the store will be presented as a place where one can take their family, enjoy a nice hot cup of coffee in the company of good friends while their child is happily playing with other children in the Sweettreats playground.

But the positioning of the store will also have to revolve around the second functionality of the location - that of a bar. In this order of ideas, Sweettreats will be presented as a place for social gatherings, surrounded by pleasant music, high quality products and obliged staff. It will be promoted as an ambient place to meet old friend or make new acquaintances, for both singles as well as couples.

3.6 Strategies

When opening the coffee & bar, Sweettreats has to choose from two available alternatives: operating on their own or purchasing a franchise. Sweettreats desires to create their own brand and will therefore not buy a franchise from other players in the industry. But this implies more risks and generates additional expenses. For instance, they will have to built, rent or purchase a location for their store. Then, they will have to acquire the necessary machineries and technologies. In addition, their being a new firm might generate reduced interest and trust from the community and the targeted audience.

In this order of ideas, the officials at Sweettreats should start by finding a location for their future coffee and bar. It would have to be located in a friendly and safe neighborhood and in a central area, with intense traffic and where it could easily be accessed.

Then, they would have to find appropriate suppliers who would be willing to sell high quality products and if possible, with flexible payment opportunities. The strategies which will be taken by the executives at Sweettreats are organized into four categories, as according to the marketing mix.

3.7 Marketing Mix

The marketing mix for Sweettrades is formed from the four P's of marketing, Product, Place, Price and Promotions. For each of these Ps' the officials at the coffee and bar will have to make numerous decisions including brand, pricing strategy, locations or advertising (Net MBA, 2002-2007)

Product

The coffee-based beverages and the foods, as well as any other products commercialized by Sweettreats will be sold under the company's brand name

The specified functionality of the Sweettreats products is to clench the consumers' thirst and hunger while in the same time offer them a beverage to enjoy while talking to friends

All products will be sold in stylish and modern holders, including cups, plates or covers

The customers will be able to take home their left overs or a new order in white cardboard packages which contain the name, contact information and logo of Sweettreats

All products commercialized by Sweettreats will meet the highest quality standards

The coffee & bar will offer a wide series of additional services, meant to help the customers increase the quality of time spend within Sweettreats; these include the playground for children, concerts during night time and 24-7 wireless access to the internet

Price

Sweettreats uses their lower prices as a sustainable advantage in comparison to its major competitors; therefore, they will sale the average cup of coffee for no more than $2

Upon launch, Sweettreats will implement a skimming pricing strategy; as such, the prices will be significantly lower than those implemented by the competition. The strategy is aimed to attract customers and form a loyal customer base

Gradually, the prices will increase and the store will implement a variable pricing strategy, meaning that the retail price to the end user will directly depend on the costs generated by the manufacturing and selling of the purchased product

Place

Sweettreats will sell their products within their own stores, without the usage of any intermediaries

The Sweettreats stores will be located in highly populated areas which are easy to access

The commodities will be stored within Sweettreats' facilities and there will be no need for additional warehousing

Promotions

Promotions will commence with the opening of the coffee and bar and will consist of lower prices and even free products, such as buy three coffees, get the forth one for free

The store will also develop their own web page which will contain vital information about the organization and their products

Sweettreats will launch a strong advertising campaign, focused around the core competencies of the store and the benefits it offers their customers

The advertising campaign will be aired on most available local media channels, such as television, radio, and even the internet; it will also contain printed materials, such as fliers and street banners