Bumgt5928 : Strategic Enterprise Planning Assessment Answer

One of the important angles are the various products and service which will be offered at the café. A café which serves espresso, cappuccino or latte with books; along with it a great ambiance for the customers to relax is promised. The prices might be high for the high-end coffee but it will be given out according to the service and product (Armstrong, Kotler, Harker & Brennan, 2015). Moreover, the business plan proposed is a different kind service as it wills one of the first cafes with a bookshop in Woolsworth which is a good location for the potential customers. The café has enough funds to implement the services which are technological and skilled workers. The security of the customers is a priority as well. The biggest strength is the informative books for the customers.

Weaknesses

A new café in the business has a high risk of being unsuccessful in many countries. Since it is a new business in the industry factor like: not all Australians are book lovers some may like reading but not that enthusiastically as in other countries which give way to an uncertainty of customers. The business is high priced for both the maintenance of equipment and books till it will control the cost and time to complete the deadlines of the café, which affect the profit.

Opportunities

A café like the coffee square which will be growing franchise, some people like to have coffee, some like spending time, some like alone time as well. In this way it is always occupied in so many ways, the saturation is a good thing as well (Arrawatia, 2018). The target place is also accessible to a big lot of people who like coffee and want to explore new places, new taste in food and a new aroma. A lot of tie-ups with companies for sponsorships and promotions also benefit the customers and the café and the partnered as well.

Threats

A lot of other tea houses and cafes to replace the proposed business especially would choose the cheap ones. Similarly, there are many tea houses and other cafes which are available in the same market, and also are cheaper (Baker & Saren, 2016). Australians are very practical, they choose the alternative way of thinking which will cost them less. And also, the market trends choose the healthy way of eating and drinking and coffee doesn’t come in the list which is not a good thing. Although the sales and the profits will get high and the competitors arising are also expected.

Market segmentation

Market segmentation is the process in which a business divides the market of the potential customers into the various groups and segments on the basis of some of the characteristics (Chernev, 2018). Consumption of caffeine in Australia has shown an increase in the growth and the strongest growth in the gourmet coffee. The economic ups and down in the past years up till today has not refrained the coffee business from growing. The business is literally facing poor sales, bankruptcy and negative balance sheets in some cases but still, the business has shown signs of positive progress. The business will build loyalty amongst the customers by providing the taste of coffee and an environment which is relaxing and ventilated and spacious as well.

The cafeteria coffee square is planning to open the new café in Woolworths supermarket stores so that they can provide the wide options to their customers (Brand & Rolland, 2018). The segmentation for the business is given below: -

Demographic segmentation 

This segmentation divides the customers on the basis of the age, income, occupation, gender, and many other factors (Schramm, 2018). Over here, the cafeteria segments the both male and female with the different age groups and the customers that belong to the low, middle and high-income groups. This customer segment includes bachelors, single people, married couples, young children and many others.

Behavioural segmentation

This segmentation makes the differentiation between the customers on the basis of behavior, usage and the decision making. Coffee square café considers this market segment because they know the fact that there are numerous numbers of people who consume coffee on daily basis (Hollensen, 2015). Along with this, the customer who visits the supermarket like to consume coffee whenever they shop at stores because this is the way through which they can make themselves refresh. Most of the people make the quick decision for the coffee.

Geographic segmentation

Coffee square café will offer the services to the local customers who visit the store in Australia (Baker, 2014). Therefore, it can be said that the company will offer its services to the rural and urban region in Australia.

Psychographic segmentation

The company considers this market segment because this segment differentiates the people on the basis of social class and lifestyle (Wilson and Gilligan, 2012). The coffee is one of the products which are considered as the part of the lifestyle of people. Therefore, the people of Australia like to consume coffee as a primary product.

Demographic environment

Demographics are the study of human population in terms of density, sex, race, occupations, and size. The demographics in Australia have transformed the marketplace into a more fragmented micro market from a mass market which is differentiated by factors like sex, age, education, and ethical background. The recent demographics show that they are now more educated and white collared, changing in age structures. Such changes make the organizations design programs and products for certain micro market which they want to target. All the demographic variables potentially affect the instant coffee market and significantly in the micro markets (Burch, 2018). The ethnic markets are a part of the growing Australian market population who has a clear brand preference. They demand a variety of coffee styles to fit the tastes which make for the development of new marketing strategies. Like most of the coffee is preferred is espresso by Italians that is why they have invented instant options.

Economic environment

Consumers have the purchasing power in the Australian market as like any other market to back their desire up for the products. Although there is an important basis of competition of the coffee products and changes for the prices and a big effect on the manufacturers market share.

Economic factors do have an effect on the Australian market which includes the Australian dollar. The coffee beans are from various countries and the rates also vary with relative exchange rates. The Australian dollar has a low value currently which drives the input prices of the manufacturers passing it onto the customers.

 The association of coffee producing countries accounts for the three-quarters of the world coffee bean production which announced the plans to control the prices. And the possible effect is yet to be known which will drive small-scale manufacturers out of the market for if the prices go too high.

Natural environment

Since the coffee producers use the natural environment it is also important for the macro environment of the Australian coffee industry. The consumers are boycotting the products which are manufactured to damage to the environment. This puts the pressure on the manufacturers to make sure of all the procedures which are environment-friendly. Issues which involve coffee producers using pesticides and pollution from the plants, water wastage and land erosion and depletion of minerals.

Technological environment

Ever since coffee was discovered in 1000AD the techniques to harvest, grow manufacture or process the coffee products has changed. The fertilizers, machinery and the irrigation systems are automated now which has increased efficiency and also improved product quality. The recent factors are the advances in processing and development of coffee machines to be used at home.

The technologies have made it possible to produce a very wide range of coffee variety with a high quality. Like Nescafe has introduced a café latte range for instant espresso. And the freeze-dried technology for increasing the shelf life of the product which is such an advantage. In the past few years, the inexpensive coffee plungers have improved the attractiveness of coffee products which are pure. Most importantly the internet shopping is allowing the customers to get it from the suppliers straight away as well.

Political environment

The Australian market is subject to a lot of laws to regulate the business of the café including the food and health norms, pollution promotions and labeling. Although it doesn’t affect that much on the Australian market.

Cultural environment

Many changes in the Australian culture and the emergence of new cultures have had a large effect on the café business in Australia. Anybody who is very serious about contemporary Australians will understand their behavior. The recent trends show that the Australians are very concerned about the health issues, diet, stress, and fitness. They prefer decaffeinated products more now. The era of coffee the real coffee culture might be growing. People who don’t drink coffee are becoming connoisseurs of coffee. It is not just a product anymore but a self-expression. There also has been the culture of subcultures which is a group of people who share values based systems like situations and common experiences of life.

Marketing mix 

The marketing mix is defined as the set of actions, tactics that the company make use to promote the brand or product in the market (Schmidt, Spann & Zeithammer, 2014). The marketing mix strategies of the coffee square cafe are discussed below that the company is willing to open.

Product 

The product is one of the important elements of the marketing mix which is an item that is produced to satisfy the requirement of the people (Kotler, 2015). The main product of the café will be coffee along with some snacks such as bakery items, toast, and dietary products. In Australia, the people are diet conscious due to which the company decided to offer coffee with some healthy products. This reflects that the company will make use of the differentiation strategy in the products (Boehe and Cruz, 2010).

Price 

The price is the amount that the customer pays to enjoy the service (Kotler, 2015). The price on which the café will offer the coffee is $ 3.00. This price is the lowest price because Café square is known for the offering the product at the low prices with the best quality. Along with this for the snacks, it varies to the different types of the dishes and the same goes for the bakery products. The price for the toast that will range from $40-45 and that will base on the ingredients of toast.

Place 

The place is the position where the café will offer its service. The café has decided to open their stores in the Woolworths department stores which are one of the ways through which the company can extend the range of the target customer. Moreover, café will be able to earn the profit in the market. Along with this, the café will make use of the intensive distribution strategy in which they will decide the ways through which they can offer the products at different outlets of the Woolworths (Rushton, Croucher and Baker, 2014).

Promotion

Promotion is one of the essential components of the market which helps the company in improving the sales and the brand recognition. Coffee square café will make use of the different tools for promoting the product in the market.

• Direct marketing: - In direct marketing, the cafeteria coffee square will make the people aware about the outlets in the Woolworths stores through online media which is Facebook, e-mail marketing, and Linked In. The company will create a page through which they can generate the awareness (Toffler, 2016).
• Advertisement: - This tool of advertisement is considered as one of the important tools through which they can make the numerous people aware about the services at the single go. The company will make use of the TV commercial and the newspaper media to promote the new outlets in the departmental stores (Grant, 2016).
• Sales promotion: - Company will offer the discount coupons and gift coupons to their customers at the initial stage as this is the way through which the people like to come again and again.  

Positioning strategy will be developed by the business entity for establishing the products distinct entity in the market regions. The price quality approach and the use or application approach can be used by the business entity for advancing the approach in the organizational structure.

Budget 

The budget is the estimation of the amount that the company will spend on promoting the products in the market (McDonald & Wilson, 2016). This budget is the promotion which includes the estimated amount of different tools that is used by the company to promote the product.

Promotional Budget
Method	Amount
1. Direct Marketing
Online media
Facebook	$200.00
LinkedIn	$800.00
E-mail Marketing	$100.00
2. Advertisement
Print Media
Newspaper	$500.00
TV commercial	$600.00
3. Sales promotion
Discount Coupons	$500.00
Gift coupons	$800.00
Total amount	$3,500.00