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Tuesday, July 31, 2012

Marketing Plan Coffee Stand

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I. Executive Summary � Mountain Mudd is an exclusive purveyor of coffee in South Dakota. With a franchise location located at Ellsworth Air Force Base in the Base Exchange parking lot. We serve a wide variety of coffee and frozen coffee beverages. Mountain Mudd has been in operation since December 001. Its average sales are $00-$400 per day. This marketing plan covers how to increase and maintain a constant sales rate of $400 per day. Mountain Mudd currently operates Monday-Saturday 6am-5pm. Plans include, increasing hours of operation to serve customers that visit the Education Center until 11pm Monday-Thursday. Mountain Mudd does not entertain any comparable competition within 10 miles. We plan to have all equipment in good standing operation and employ a part-time handyman to service any malfunctioning equipment to serve all of our customers needs. We do not plan on increasing prices, as current prices are in-line with the market. We currently have three employees and plan to hire one more to cover evening shifts. All supplies will be stocked on a weekly basis, as compared to the bi-weekly basis currently. We plan to utilize the services of UPS to replenish low stock on a weekly basis as compared to the monthly stock we receive now. We will not turn any customer away because we are out of a certain supply. The only major modifications being made to our current marketing plan is how stock and supplies are replenished. Minor modifications are being made to operating hours and training procedures.


II. Environmental Analysis


a. The marketing environment


1. Competitive Forces-Our major competitor is AAFES Shoppette. They offer more services at one site than Mountain Mudd. They do not offer quality coffee at their site, rather convenience coffee from a drip pot. Their strengths include; longer operating hours, lower prices, and more products offered in one stop. Their weaknesses include; a low quality coffee product, little choice as to various flavors of coffee, and they do not offer Granita. We expect AAFES to do nothing to measure to our standards since they are not purveyors of coffee. The industry is structured in a unique way that the more competition the better. This is so due to being a convenience impulse item. If a customer has to wait in line a drive-thru they will be more inclined to stop at the next coffee stand on the way to their destination. As Ellsworth AFB will not allow anymore drive-thru coffee stands, we do not foresee any new competitive forces.


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. Economic Forces-The local economy is generally stable and steadily growing. Our customers are spending more, as recent trends show, due to high number of deployed service members. More customers are relying on convenience and comfort food and beverages. In general, our customers are optimistic about the economy. Consumers in the local area are spending more as families of deployed service members are generating more revenue. Recent trends show consumers buying more of our product since we serve as a comfort product with habitual buying behavior developing in the local area.


. Political Forces-No current elections have changed the political landscape. Mountain Mudd has not been faced with any new controls or gatekeepers. More consumers are purchasing our product. War activities have been beneficial to profits and sales. The only bureaucracy we face is that of maintaining our hut on AAFES property. We currently are under a five-year contact that states all utilities will be paid and we will pay rent in the sum of five percent of gross sales.


4. Legal and Regulatory Forces-No new regulations have affected our business.


5. Technological Forces-As Mountain Mudd is seen as a service business as well as a product business; we are not influenced by any new technology at this time. The machines we have in operation are still top of the line and will continue to serve our purpose for years to come. At which time our equipment becomes obsolete we will replace it.


6. Sociocultural Forces-It is en vogue to drink espresso-type coffee drinks. As our area and customers are concerned with status we will continue to thrive capitalizing on the psychological aspect of our trendy products. One challenge we face is developing a strong pricing strategy. Consumers might feel they are paying more for less since our product is costly. To stay in line with demand we will continue to monitor our pricing and value-added services.


b. Target Markets


1. Identification-Our average customer is between the ages of 18-5. The average wage is $0,000-$4,000 per year. Our customers range in educational levels from high school graduate through postgraduate. The current Mountain Mudd location is less than ideal for maximum profit but suitable. It is located on a major road with a daily car count of 1,700. Ideal car count is 10,000 or more. South Dakota climate is ideal for our business. With the majority of months during the year producing cold weather, consumers demand rarely falls at any given time. In respect to our usage rate, the majority, approximately 80 percent, are heavy users. During the hours of six a.m. and nine a.m., we serve the majority of our customers. The benefits sought from our products are taste, value, and status.


. Needs Analysis-Our customer’s needs are being met by producing a quality product and offering superior service. Our local competition has put to use an espresso machine, which has not returned any profit, as it is not the quality product consumer’s desire. The Ellsworth location will continue to support a population of approximately 10,000 people. Forecasting does not expect any major increases or decreases due to population change.


c. Current Marketing Objectives


1. Review of current marketing objectives-We inform our target market of new products and flavors we carry. The hut window informs customers about special price promotions. We persuade our current customers by building brand preference since we carry a high quality product. Finally, we remind our customers of our operating hours to encourage returning at other convenient times. Our current marketing needs to change to increase flow of traffic. A new Education Center has been built in our parking lot and we need more of those consumers to know our hours and our products.


. Performance Analysis-We currently serve an average of 00 customers a day. A single cup of coffee costs us .5 cents to produce. The average customer is paying $.00 per cup of coffee. Our current performance is much lower than those in the industry. This is a result of serving such an isolated population. Maintaining three percent of the traffic flow is the current goal to remain profitable. The industry as a whole is thriving due to status, trends, and convenience. To increase profits and sales, we need to direct some financial effort to advertising to our target market. Currently we do not do any advertising.


III. Strengths and Weaknesses


a. Strengths


1. We have no competition within 10 miles. Being a convenience and impulse buy item, we rely heavily upon not having any direct competition in the same geographic area.


. We serve a top quality product, which is not offered at the AAFES Shoppette. Customer’s seeking quality coffee have one choice.


b. Weaknesses


1. Mountain Mudd defines one weakness as the consumer awareness. The general population in our geographic area does not know what products we serve. We need to organize a small advertising effort of increase consumer awareness that we can meet their coffee needs.


. One of our frozen drink mixers is broken and has been for over a year. We need to invest the money to fix our Granita machine as one-third of our customers from May-October request frozen drinks and we have to turn them away.


IV. Opportunities and Threats


a. Opportunities


1. The opening of the new Education Center on Ellsworth last September has increased flow in our parking lot by 40% during the hours of 4pm-11pm. We need to extend our hours to serve this increased traffic.


. Ellsworth has a local publication (The Black Hills Bandit) that charges a minimal cost ($0 for weeks) for advertising rates. This publication is free to readers and is placed in all shopping establishments surrounding our location.


b. Threats


1. Mountain Mudd is threatened by a declining customer service by not repairing the Granita machine. Turning customers away is bad business and we stand to lose more customers by word of mouth advertising by not offering the entire assortment of products we should.


. Operating on limited hours has threatened our livelihood. We need to extend our hours from 6 a.m. to 5 p.m. to 5 a.m. to 11 p.m. to keep our potential customers from going to AAFES Shoppette for coffee and frozen drinks.


c. Matching Strengths and Opportunities


1. Mountain Mudd can match its strengths and opportunities by building stronger brand recognition within our geographic location. In addition, if we advertise in The Black Hills Bandit newspaper we will allow our target market to know our business hours and some of our products.


. Mountain Mudd can convert its weaknesses into strengths by servicing the Granita machine and publicizing our operating hours.


. Mountain Mudd can convert its threats into opportunity by repairing non-operable equipment and making he target market aware of products and hours of operation.


V. Marketing


a. Marketing Objective 1 - Our objective is to sell 00 cups off coffee per day. Having no competition within ten miles gives us competitive advantage. To achieve and sustain this sales rate we will have to fix the Granita machine to service those customers who go to AAFES for an Icee when we turn them away. This is consistent with Mountain Mudd’s mission in providing superior service and top quality coffee products.


b. Marketing Objective - Our objective is to provide excellent customer service as a value-added incentive. The number of repeat customers measure this. We want to follow consumer-oriented marketing practices so we continue to serve the consumers needs. This objective converts the weakness of consumers not knowing we exist by encouraging word-of-mouth advertising and strong repeat sales.


VI. Marketing Strategies


a. Target market


1. Our target market is; aged 0-4, family size 1-, young, single and married with young children, income range of $0,000-$4,000, most are working-class military members, most are in Generation X and Echo Boomers, varied nationalities. This is a trend-oriented market and espresso is not only tasty but also trendy. Our only competitor is AAFES Shoppette who serves a watery low quality version of our product.


. Our target market is also a mix of differentiated and concentrated marketing. Many of our consumers share commonalities such as occupation, income, and education levels. But, we serve a vast number of visitors traveling through the area and temporary employees of the Base.


b. Marketing Mix


1. We use value pricing to serve our customers. Part of the cost is our operating cost plus buyers’ perception of the value. Primarily we rely upon perceptions of the consumer to determine what the market will bear. Mountain Mudd offers the right combination of quality and great service at a fair price.


. Attempting to use intermarket segmentation, we have a new base to segment which is the population visiting the Base Education Center in the evening Monday through Thursday. Advertising within the walls of the Education Center and bulletin boards will target this market.


VII. Marketing Implementation


a. Market Organization - The marketing unit will be organized by market management. This system is most advantageous so front line employees can determine what products our specific market is demanding. Decision-making authority over $100 lay ultimately with the owner of Mountain Mudd. Marketing decisions as to what the windows of the hut will advertise is up to the employees manning the hut. Front line employees will be empowered to make decisions regarding changing the flavor of the day coffee, determining if a customer is entitled to a free cup of coffee for a previous mistake, and for planning discounted or promotional pricing days throughout the week. We will ensure our employees make the right decision by spending 8 hours of training with a seasoned employee before going on their own and during that training go over scenarios that will define Mountain Mudd’s customer philosophy and help the new employee understand how to make decisions.


b. Activities, responsibilities, and timetable for completion


1. Product Activity


a. Maintain variety of 4 Torino flavors to add to coffee and other drinks.


i. Area manager responsible


ii. Weekly


b. Uphold quality milk standards for daily stock (Low-fat, no-fat, and soy)


i. Area manager responsible


ii. Daily


. Pricing Activity


a. Product line pricing


i. Owner responsible


ii. Quarterly


b. Pay all invoices within discount period


i. Owner responsible


ii. Weekly


. Distribution Activities


a. Distribute restocking supplies from Billings, Montana (Main Warehouse) via UPS


i. Owner responsible


ii. Bi-Monthly


b. Restock milk supply


i. Area Manager responsible


ii. Monday, Wednesday, and Friday


4. Promotion Activities


a. Place ad in the Black Hills Bandit


i. Area Manager responsible


ii. Monthly


b. Inform customers of daily specials by handing out menus and updating windows signs


i. Front Line Employees


ii. Daily


VIII. Evaluation and Control


a. Performance standards and financial controls


1. Product Activity


a. $01.60 � Monthly Budget


i. No customer complaints about being out of a flavor


ii. Allocating more profits for expanding Torino flavors


b. $0.40 � Monthly Budget


i. No outdated milk product in-stock


ii. Inspecting milk daily for spoilage


. Pricing Activity


a. Maintain pricing standards


i. Keep prices in check with national average


ii. No corrective action


b. Pay all invoices within discount period


i. All discounts are applied for paying within allotted discount period


ii. Reroute incoming mail to Area Manager to itemize payables to submit to Owner.


. Distribution Activities


a. Distribute restocking supplies from Billings, Montana (Main Warehouse) via UPS


i. The hut will never be without adequate stock


ii. Area manager will drive to Billings, MT twice per month to pick-up stock and supplies


b. Restock milk supply


i. No spoiled milk


ii. Receive milk from a more reliable supplier if milk stock is continually spoiled


4. Promotion Activities


a. Place ad in the Black Hills Bandit-$5 Monthly


i. Number of customers referring to newspaper ad


ii. Include coupons in newspaper to increase sales


b. Inform customers of daily specials by handing out menus and updating windows signs


i. That geographic awareness increases by increased sales


ii. Include money-saving coupons with menu


B. Monitoring Procedures


1. Marketing activities will be monitored at all levels from the owner down to the Area Manager and front-line employees who are serving customers to standard.


. An independent firm on a bi-annual basis will conduct a formal marketing audit. This audit will ensure Mountain Mudd is implementing a marketing mix that is profitable. The scope of the audit will be limited to marketing strategy, the marketing organization, marketing productivity, and marketing functions.


. No other audits will be performed.








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