Beyond the Bean BY AC0190 Beyond the Bean (Case A) Lecturer: Authors: Name: Contents Student number: Group: Executive Summary The company’s main objective is to introduce t Beyond the bean” to the Canadian market in London Ontario on the Richmond road and open up a caf?© for mainly students, to get together and serve as a recreational center. This will be possible through the caf?© and/or by having a variety of board games for the public. The initial approach will be to gain a market share for leveling out the playing field and being a root competitor for similar types of businesses.
In the external and internal analysis you will be able to find all the necessary information that will provide you with a generous overview of the company’s operations and progress. For your convenience the analysis has also been summarized in the SWOT analysis. The key SWOT-elements chosen are as followed: Ostrength: Innovative caf?© / high growth rate industry Olweakness: Entering a new market segment with no similar type of experience. ‘lopportunity: Big (potential) target market (Students). OIThreat: Similar competitors with large market share + entering unknown market.
Based on the SWOT analysis and Porter’s ive forces model, objectives were defined in order to achieve our main objective: Long-term objective Reaching a bigger market share and maximize profit within 3 years. Short-term objectives 1) Enter new market segment 2) Managing costs effectively and lower the monthly costs. 3) Creating brand awareness. 4) Realizing a 3% per month profit increase Introduction Beyond the Bean is a new caf?© that specializes in gourmet coffees and related beverages (espressos, lattes, cappuccinos, teas, etc. where customers could also rent tables and play board games. In this section we detail marketing plan for Beyond the Bean, based on case facts and assumptions made by the marketers. The marketing plan includes an tull analysis ot the external and internal environment, marketing objectives, segmentation strategy, SMART goals, an integrated marketing mix, the budgets and controls, and a recommendation. External Analysis Customer Analysis “Beyond the Bean” is entering a segment that is not very well known yet.
It is a caf?© where people can get their coffee, but it also offers people the opportunity to rent a table to get together and play games. Market segmentation is all about understanding the market and the customers. If you know the needs and wants of your customers, you can start targeting a certain segment. Because “Beyond the Bean” is a new type of segment, it can be difficult to successfully target a certain segment. In this case, “Beyond the Bean” offers a person the opportunity to get together to play games, but also to have a drink together.
So it is a caf?© that stimulates social interaction. Geographical: The specialty coffee is a $5-billion industry in the USA that was hit by the same worldwide recession as Canada. But even though the economy was not as alive as it sed to be, the specialty coffee industry still had a growth rate of 20 per cent annually during the last decade. So the segment that “Beyond the Bean” tries to target can be very profitable when using the right strategy. Demographical: This is a very important segment, because it involves the people itself, which make up the markets.
The major segments that are used by “Beyond the Bean” by using demographic segmentation are: – Age – Gender – Location Age: Entertainment and social interaction are needs for everyone. It doesn’t matter if you’re 18 or 80 years old, everyone from any age could like to get together, have a rink, or play a game. Gender: Both men and women need social interaction and entertainment. “Beyond the Bean” offers these needs to both men and women. Location: A g location is a must. In London, Ontario, ” yond the Bean” nas a great location, because London is a big city, which offers an opportunity to reach a lot of potential customers.
Psycho graphical: This type of segmentation looks at the interests and lifestyle of the customers. This can also refer to the demographical segmentation, because a person’s lifestyle is determined by factors like age, gender and location. Beyond the Bean” has a very wide range of potential customers. It is appropriate for any lifestyle. Whether you are young of old, male or female, everyone needs entertainment and social interaction. Behavioral: This type of segmentation is about the buying behavior of the consumers.
In this case, it is about how people behave in terms of entertainment and social interaction. This graph shows the size of the entertainment industry. It shows that, even in the economic crisis, the market still remained constant, which is very remarkable. This shows that entertainment is a must for people, and that they spend money on it, ven when the economy is not at its best. Customer Needs Humans have various needs, physical, social and individual. They have the need to interact with others and to entertain themselves. Beyond the Bean” offers these needs by providing people the opportunity to have a drink and/or to play games together. Competitor Analysis Strategy Greig and Peck have already done some research about who their competitors will be. They see Fleetway and Palasad North as their direct competitors and Tim Hortons, Starbucks and William’s Coffee Pub as their indirect competitors. A marketing strategy involves two key questions: 1 . Which customers will we serve (segmentation and targeting)? 2. How will we create value for them (differentiation and positioning)?
Fleetway: Fleetway more focuses on the entertainment branch. It offers bowling, miniature golf, rock climbing and billiards. Its advertising targeted children, teenagers and adults. Although the company itself does not have a cafe/bar/restaurant, there is a nearby facility where lots of Fleetway’s customers go to eat or drink something. This could be a threatening company for “Beyond the Bean”, because Fleetway offers entertainment, but it’s also possible to grab a bite/drink nearby. Palasad North: Palasad North offers both entertainment and food.
It offers many forms of entertainment, like billiards and bowling, but it also has a large restaurant at its facility. Although a lot of customers come Just for the restaurant, this company can be a huge threat for “Beyond the Bean”, because it offers both entertainment and food. Tim Hortons: Tim Hortons was an extremely popular franchise with a lot of locations. It specializes in coffee, tea and baked goods. The store has a fast-food ambiance and doesn’t provide comfortable seating which make people go in and out as fast as they can.
This company is seen as an indirect competitor, because it doesn’t offer its customers any type of entertainment. It is completely focusing on the “fast coffee” branch. Starbucks: Starbucks focuses on offering its customers premium coffees and offers a wide selection of related drinks and high-end pastries. The company offers free Wi-Fi and a comfortable atmosphere so people can have a comfortable seat and enjoy their coffee. Starbucks is seen as an indirect competitor, because if focuses on the coffee branch, without offering any kind of entertainment.
It is a store where people go when they are “on-the-go”. Williams Coffee Pub: This company offers fast service, but also tasty, high-quality products in a relaxed and affordable atmosphere. It offers a full selection on coffees and related drinks, pastries and snacks. It has a restaurant look and it has a heavy focus on the breakfast menu. Free Wi-Fi is also available since it was offered by Starbucks. This company is also seen as an indirect competitor, because it offers drinks and a relaxed atmosphere, but no entertainment.
It is more like an “on-the-go restaurant” where people can get breakfast and coffee in a relaxed and affordable atmosphere. Coffee Culture Caf?© and Eatery: This franchise has stores that are like an old-world coffee house and offers its customers an extensive specialty coffee menu, baked goods, ice cream and gourmet goods. The franchise wants its customers to relax, socialize and enjoy the ambiance. It also offers free Wi-Fi. This franchise is also seen as an indirect competitor. It offers coffee and an enjoyable ambiance, but no type of entertainment.
Market Position The specialty coffee branch and the entertainment industry are both very big. There are a lot of stores and/or companies that offer at least one of these. However, getting into this industry does not mean that you have to directly compete with bigger companies (li two big ke Starbucks Ottering o b tn drinks and entertainment combines industries, without focusing directly on competing with the huge coffee or entertainment companies. When entering this combined market, there are two big competitors that have to be taken into account.
Both Fleetway and Palasad North are already into the market, which means that they have an advantage on “Beyond the Bean”. Fleetway and Palasad North already know their customers and the customers already know them. Entering the market could therefore be difficult, but seen the size of both the coffee and the entertainment branch, entering the market is certainly not impossible. The 4 P’s are very important for each company. They are known as: – Product What is the company offering? – Place Where is the company offering/promoting its products? Price What is the price of the products? – Promotion How, where and when to promote? Product Place Price Promotion Drinks&Food/Entertainment London MI-range Local advertisement Fleetway Midrange Palasad North London, Palasad North Tim Hortons Drinks&Food Multiple locations in and near London Midrange-premium Starbucks All over the World Premium Worldwide promotion Williams Coffee Pub Multiple locations in Ontario Coffee Culture Caf?© and Eatery Market Analysis The market that “Beyond the Bean” is trying to enter is not Just a simple one.
The market combines two major industries (the specialty coffee industry and the entertainment industry). Therefore, the market can be unpredictable, but also very profitable when using the right marketing strategy. Because of this “new” type of market, it is difficult to recognize the competitors. But ecause the company is entering both the specialty coffee industry and the entertainment industry, competitors can be found in different markets. It is important to make use of the advantages that the company has because of combining the two industries, because some competitors are very strong, like Starbucks for instance.
Macro Environment Demographic: The demographic environment relates to the customers, but also the employees of the company. This environment is all about the general factors of the customers and employees. It gives the company information about which customers need to be approached. In this case, the factors that matter are: age, gender, and location. By looking at these factors, “Beyond the Bean” can determine its target group and target market. Technological: The 21st century is also known as the digital age. Theretore, it is important to promote and advertise on the internet, because it cheap and reaches a lot of people.
Economic: The economic factor is all about recognizing and understanding the market. Some people are interested in a product or service, but don’t have the financial recourses to buy it. Economic factors are different for every person. It is all about how much you ant to spend on a product or service and seeing the value of it. Cultural: Cultural factors are very important for setting up a marketing strategy, because you need to know your customers and the behavior of customers differ in every country. This is also mentioned in the customer analysis.
Legal: Political instability affects every company both directly and indirectly. Regulations passed on by the government could prove to be too much for the organization and hinder its productivity. An example is the liquor license. An agreement between a company (Beyond the Bean) and the government is needed to control this aspect. Internal Analysis Because “Beyond the Bean” is not operating yet, it does not have a past or current strategy or way of operating to analyze. The only thing that can be said about the company is in what stage it is of starting the business.
At this moment, the company is looking for the best way to start. It is trying to see how to stand out from its competitors, how to promote, how to organize the cafe, and it’s trying to recognize the target market and the right marketing strategy. SWOT Strengths: The market for beyond the bean is open to everybody, with the innovative idea to tart up a caf?© in combination with a variety of board games, focused mainly on students, serving as a recreational center makes this caf?© unique and 1 of its kind.
Having 2 people in the company with prior business skills makes running the business professionally a lot easier, also it is more convenient to do business with. The industry in which this caf?© will be have a strong resistance in recession times (entertainment and industry) would again confirm the choice to open this type of caf?©. Weaknesses: Due to the lack of practical experience starting up a caf?© like this is increasingly ifficult but still very good doable because this would improve a better relationship between customer and owner.
They have a (relatively) low starting capital if compared to other companies in similar market Opportunities: The target market are mainly students, the area where the caf?© will open has big potential to target a lot of students because there are lots of colleges nearby, also Richmond road is a busy and well sought street with lots of recreational activities going on, ‘Beyon d the bean’ can use this in their advanta caf?© creating brand awareness. Threats: ge to pull customers to
There are many businesses with similar ideas so the competition it tough, through these innovative ideas a caf?© like this makes it possible for them to stand out become a root competitor in the industry. Rising prices of the coffee industry would negatively affect the caf?© whereas they would have to raise prices to compensate for the extra costs, this again would scare off (potential) customers. The Seasonal target group could be lost in the off season resulting in a loss of profit. Segmentation The market Beyond the Bean will attract is located in London. London is a city in
Southwestern Ontario, Canada, situated along the Quebec City-Windsor Corridor. The city has a population of 366,1 51 according to the 2011 Canadian census. London is home to Fanshawe College and the University of Western Ontario, which contributes to the city’s reputation as an international center of higher education, scientific research and cultural activity. The city hosts a number of musical and artistic exhibits, as well as The Forest City Road Races. London’s festivals contribute to its tourism industry, but its economic activity is centered on education, medical research, insurance, and information technology.
According to Ontario ministry of finance Consumer expenditures rose 0. 2%, following a 0. 3% gain in the fourth quarter of 2012. Consumers increased their purchases of food and beverages, furniture, clothing and natural gas in the first quarter. Spending on services increased 0. 3%, after rising 0. 2% in the fourth quarter of 2012. The primary target segment of Beyond the Bean is Millennials. This segment will include teens between the ages of 15 and 18 years and young adults between the ages of 19 and 35 years. The segments will be students and young professionals, who live in London Ontario.
The Beyond the Bean customer will come from ages between 20 and 24. Within this population we will focus on four separate groups: High school students, Fanshawe College students, Western university students and young professionals. High school students: between 14-19 years. Almost 20000 high school students enrolled in secondary school within the city. These students usually lived with their parents and often worked part-time, which provided with the some spending money. Fanshawe College students: between 20-24 years. Over 1 5000 full time students enrolled at its London campus.
Full time students usually don’t have part time Jobs unlike high chool students since it is hard to find a Job with flexibility; however Canadian students can apply for student grant or loans from the Ontario Student Assistance Program to gain some income. Western University students: between 20-24 years. There were approximately 3 undergraduate students enrolled witn almost 4 first-year students enrolling each year. The Western University offers Canadian students a work/study program, which offers the students to work flexible hours on campus in Jobs that accommodate their schedules.
Also the Canadian Western student can apply for a student loan or grant from OSAP. Young professionals: etween 25-35 years, generally well educated and with a higher disposable income relative to others their age. The partners’ research revealed that approximately 15000 young professionals lived in London. Geographic: All the segments are located in London, Ontario. The high schools and young professionals are located within the city. The Western University College is located in northwest London and the Fanshawe College in northeast London.
Fanshawe is approximately 10 kilometers away from Western’s campus and the location of Beyond the Bean. Students of Western University came from primarily Ontario, but a ignificant number of out of province and international students also enrolled for the college. Psychographic: High school students: The partners believe that the students would be interested in social interaction with their friends. They usually lived with their parents which means that the high school students would a to be restricted in their ability to visit the caf?© on school nights due to homework, part-time Jobs and curfews set by parents.
This group often relies on public transport or parents to drive them around town. Western University: University students will enjoy the opportunity to inexpensively socialize with friends. Most of Westerns did not own cars and lived near the university; all full-time undergraduate students at Western received a public transport pass for the school year. Although some classes were offered in the spring and summer, the majority of students spent eight months (September through April) in London, and returned home over the summer months.
Fanshawe College students: Like the Western University students Fanshawe students also enjoy an inexpensive night out. The presence of the college students in the city was also highly seasonal, with many of these students leaving London during the months of May through August. Young Professionals: It is likely that this group enjoys a good cup of coffee at a coffee shop occasionally. Young professionals generally provided their own transportation and lives city during the year.
Behavioral: High school students: According to the partners the high school students might be interested in social interactions while playing board games, but it is unclear if the high school students have interest for the coffee focused menu at beyond the bean. Beyond the Bean will serve alcohol and since the legal drinking age in London is 19 years it can have negative financial consequences if minors consume alcoholic beverages. Western University: The partners can identify with the Western students because they had recently been students at Western themselves.
According to Greig Peck university students will enjoy the opportunity to inexpensively socialize with friends and looking for an alternative to the bars frequented by most students. Fanshawe College students: According to the partners Fanshawe students had characteristics similar to those ot Fansnawe students and also enjoyed a night out a reasonable price that does not necessarily include alcohol and bars. Young Professionals: Greg and Peck believed this group would be interested in the gourmet offee shop offering but they were less clear on how much interest this group would have in playing board games.
Target Market Everyone who wants to have fun by playing games is welcome at Beyond the Bean; however the company will focus specifically on Western University students and Fanshawe college students. The main target market for Beyond the Bean is higher education students between the age of 20 and 24. Students that enjoy socializing with friends, looking for an alternative to the bars and students who want to have fun with friends for a descent price. For only $6 per hour the customers can enjoy playing nlimited games with five friends.
Based on Greigs’ estimation they will spend at least $4 on food and drinks. In London, Ontario over 15000 Fanshawe full time students enrolled at its London campus and where were approximately 30000 undergraduate Western students enrolled with almost 4500 first-year students enrolling each year in the target market group. Western and Fanshawe students do not own a car therefore the location of the caf?© will be accessible with public transit, Richmond row is an excellent well known place among the students. Since students have a smaller budget than the other segment groups.
Another way to attract student is with the Beyond the Bean stamp card. The customers will receive card when they visit the coffee shop; after each visit the student will get a stamp at the tenth stamp the person can rent a table for free. Positioning Beyond the Bean is a coffee shop like no other in the city because the company differentiates itself by offering entertainment to the customer (product differentiation). Beyond the Bean is a coffee shop with a twist, customers can rent a table to play board games with friends while enjoying a cup of coffee or an alcoholic everage.
The other coffee shops in London do not offer consumers alcoholic beverages and board games. The personnel of Beyond the Bean will have excellent knowledge of the board games so they can assist customers if needed. Free Wi-Fi will be available for the customers for their convenience. The company aims to position itself as fun, interactive, budget friendly and as unique entertainment. This position will be targeted to the higher education students located in London Ontario. The advertising will be through social media for example Facebook, word of mouth,
Western Gazette (Western university student newspaper) and Fanshawe interrobang (Fanshawe College newspaper). Beyond the Bean is the most fun caf?© youVe ever been. Beyond the Bean is a caf?© with a unique concept, but the competition is tight with other coffee shops in the city for example (the global successful caf?©) Starbucks. As a starting company with a humble budget Beyond the Bean should differentiate itself by its uniqueness. Therefore the business level strategy is recommended because it goes hand in hand with the differentiation marketing strategy. As a traditional coffee