2015  

By  Ana  Puente,  Jacqueline  Maldonado,  Ian  

and  Stephanie  

 

5/5/2015  

Marketing  Plan  Café  13  

Table  of  Contents  Executive Summary  .....................................................................................................................................  3  

Description of the Company  ........................................................................................................................  4  

Objectives and Goals  ...................................................................................................................................  4  

Situation Analysis  ........................................................................................................................................  4  

Industry Analysis  .....................................................................................................................................  6  

Local Competition  ...............................................................................................................................  7  

1.   The Windy Saddle  ........................................................................................................................  7  

2.   Hire Grounds  ...............................................................................................................................  8  

3.   D’Deli  ..........................................................................................................................................  8  

Customer Profiles  ........................................................................................................................................  8  

Developing Customer profiles  .................................................................................................................  8  

1.   Retired in the Suburbs  ..................................................................................................................  8  

2.   Urban Cliff-Dwellers  ...................................................................................................................  8  

3.   Married in the Suburbs  .................................................................................................................  9  

Building Sales  ..........................................................................................................................................  9  

1.   Continually Add New Customers.  ...............................................................................................  9  

2.   Increase Purchase Frequency  .......................................................................................................  9  

3.   Increase the Size of the Average Sale  ........................................................................................  10  

Head/heart Motivators  .......................................................................................................................  10  

Best Customer Marketing  ......................................................................................................................  11  

Survey  ........................................................................................................................................................  11  

Branding Process  .......................................................................................................................................  13  

1.   Positioning  .....................................................................................................................................  13  

2.   Value Proposition  ..........................................................................................................................  13  

3.   Brand Image  ...................................................................................................................................  14  

4.   Brand Mission Statement  ...............................................................................................................  14  

5.   Brand Identity Elements  ................................................................................................................  14  

a.   Name:  .........................................................................................................................................  14  

b.   Colors:  ........................................................................................................................................  14  

Marketing Mix  ...........................................................................................................................................  15  

Product Strategies  ..................................................................................................................................  15  

Pricing Strategies  ...................................................................................................................................  17  

Price Benefit Charts  ...........................................................................................................................  18  

Place Strategies  ..........................................................................................  Error!  Bookmark  not  defined.  

Promotion Strategies  ..............................................................................................................................  21  

Creative Strategy  ...............................................................................................................................  21  

Three Categories of Media  .....................................................................................................................  21  

1.   Promote to Current Customers  ...................................................................................................  21  

2.   Promoting “Via in-the-Market”  .................................................................................................  21  

 

Marketing Plan: Café 13

Executive Summary

Café 13 offers superior organic coffee and a wide variety of other beverages along with breakfast items and lunch. Café 13’s customers are mainly retired people, tourists and/or young adults above 30 who like the cozy feeling and relaxed atmosphere. Café 13 also offers an excellent and friendly service to its customers on a daily basis and every one of its employees make sure customers are treated with respect and make them feel like they are in their own home environment.

Across Colorado small coffee shops are growing over the years and competition within the industry is slowly increasing. Golden, Colorado is a relatively small town that has a few places that could be considered competition to Café 13. However, our research found that there are three major coffee/sandwich shops that play a role as far as competitors. These are: “The Windy Saddle,” “Hire Grounds,” and finally the sandwich place “D’Deli.”

Even though, Starbucks is a major competitor within the coffee industry we don’t consider it as a direct threat to Café 13 since they are different in atmosphere and type of business offered.

Café 13’s marketing strategy is to emphasize the high quality of products used to make fresh food as well as the organic coffee proudly grown locally. Café 13 is highly interested in emphasizing its warm, cozy feeling and eclectic design of the shop to give its customers an a good environment.

Products offered at Café 13 are provided by staff that has been trained and are experienced in preparing good coffee beverages, as well as, good quality food. Café 13 expects having their staff ready and with the best attitude to provide a quality customer service.

The management of Café 13 consists of being a privately held corporation registered as Colorado C. Corporation to DG Enterprises Inc. The ownership is by Daniel G. Maier and Gary R. Ruhnke. Both partners take hands on management roles and make sure everything is working well with the coffee shop.

Café 13’s projected sales for the year 2015 are $448,725.62 and plan to have a promotional budget of $13,500 set as percentage of these projected sales. Within the recommendations to increase Café 13’ sales are to offer a new brunch menu for the weekends as well as up-selling and cross-selling of products to name some. With the already cozy feeling and quality products offered, Café 13 wants to maintain the inviting feeling and continue to increase loyalty as well as purchase frequency thorough the Golden area.

Description of the Company

Nestled in Golden, Colorado, Café 13 is a perfect place to get a perfect cup of coffee. Golden, Colorado is small town friendliness and amazing landscapes, it is no wonder why everyone is always smiling. Café 13 is located within a historic building, Gulden’s Armory. Architect James H. Gow built the Armory in 1913. Originally designed to be made of brick, cost-cutting measures switch the building to a free and plentiful local resource, cobblestone. This makes the building more distinctive and famous and has been listed in Ripley’s Believe it Or Not as the largest cobblestone building in the United States.

The concept for Café 13 is superior coffee drinking with superior food made in house. They also offer fresh juice, loose-tea blends, Ghirardelli cocoa, gourmet chocolates and gift items. Their employees are highly trained and experience that deliver excellent customer service to all its customers.

Objectives and Goals

Here at Café 13 we want to maintain a solid reliable reputation in Golden and provide continual investment in the community. To be the coffeehouse of choice for the local Golden community, downtown business workers, students, and tourists, by providing a higher quality experience than any competitor. Some of other practical goals and objectives we want to pursue are listed below:

• Consistent branding/logo • More visibility brand in historical building • Increase in sales by 7% • Increase of customers • Increase average sale • Increase purchase frequency

Situation Analysis

Cafe 13 is a locally owned coffee house located in the heart of Golden, Colorado that sells flavorful coffee drinks using organic coffee grown in Boulder, Colorado. They also offer fresh juices, loose leaf tea blends, smoothies, pastries and variety of different items on the breakfast and lunch menu. At Café 13, we want to pay special attention to those factors that affect or could affect our company by doing the SWOT analysis. This will provide us with an opportunity to examine our strengths, weaknesses, opportunities and threats. Strengths are valuable for us, and will help us emerge our opportunities, but it is important to realize our weaknesses as well and be aware of the threats. Below is shown our SWOT matrix:

         Strenghts  -­‐  Low  employee  turnover  -­‐  Friendly  Staff  -­‐  Local  company  partnerships  -­‐  Historical  building  locaPon  -­‐  Good/private  space  for  customers  to  enjoy  their  drinks  -­‐  Loyal  customers/Customer  retenPon  -­‐  Affordable  prices  -­‐  Locally  owned  -­‐  Delivery  service  -­‐  Involvement  in  community        

 Weaknesses  

-­‐  Limited  lunch  menu  items  -­‐  No  restaurant  flow  -­‐  Business  hours  -­‐  Ambience/Decor  -­‐  Products  are  lacking  “gourmet”  taste  -­‐  Cafe  doesn’t  stand  out  

 

       Opportuni9es  -­‐  Bring  in  younger  clientele  -­‐  Get  a  liquor  license    -­‐  Revamp  their  loyalty  program    -­‐  Be  more  acPve  on  social  media,  such  as  offering  a  few  “fans”  of  the  cafe  to  try  new  menu  items  before  they  are  put  on  the  menu.  -­‐  Promote  at  the  University  if  possible  to  bring  in  more  student  customers  -­‐  Add  "coffee  of  the  month"  opPon  on  the  menu.  -­‐  Improvement  of  the  website  

   

   

       

 Threats  

-­‐  High  compePPon  from  Windy  Saddle    -­‐  Higher  Grounds  Cafe  -­‐  If  they  offer  liquor,  it  might  drive  away  exisPng  customers    -­‐  Newer  coffee  shops  entering  the  market  -­‐  The  compePPon  has  a  younger  demographic  than  Cafe  13.  

             

SWOT  

Industry Analysis

Brief History of the Coffee Industry

The coffee was first discovered by Kaldi in Ethiopia according to a legend said in there. Kaldi noticed his goats, upon eating berries from a certain tree, become so spirited that they did not want to sleep at night (ncausa.org, 2015). Kaldi reported his observation to the abbot of the local monastery, which proceeded to make a drink with the berries and soon discovered that it kept him alert for the long hours of the evening prayer. Soon the findings were shared among other monks at the monastery and the knowledge of the energizing effects of the berries began to spread. The news moved east and coffee reached the Arabian Peninsula, where it began a journey in which it would spread its reputation across the globe (ncausa.org, 2015).

The first in cultivate the coffee were the Arabs, as well as the ones to begin trading it (ncausa.org, 2015). Coffee houses emerged and started being popular, people frequented them for all kinds of social activities and gatherings. These coffee houses were often referred to as “Schools of the Wise” because it became an important center for the exchange of information. In the 17th century, coffee made its way to Europe and quickly became popular across the continent. At first, it did not sit well with most Europeans, calling the beverage the “bitter inventions of Satan” (ncausa.org, 2015). By the mid-17th century, there were over 300 coffee houses in London and many businesses grew out of these specialized coffee houses that still in exist today. By the mid-17th century, there were over 300 coffee houses in London and many businesses grew out of these specialized coffee houses that still in exist today.

Industry of Coffee Today

The industry’s demands for premium coffee and snack products are mainly driven by a number of factors including: disposable income, attitudes toward health and demographics. Another crucial factor for analyzing the demand in the industry is the per capita coffee consumption where the increase in coffee consumption increases the revenue of coffee and snack shops. A driver of this increase is the rise of disposable income as the economy improves and consumers start to expand their budget to include luxury items. With these increases, also a change in preferences relating to health and diet are fast growing making coffee shops change their strategy and food options. Per capita coffee consumption is expected to increase in 2015.

The world price of coffee has risen sharply in recent years due to growing demands and the resulting supply shortages. Coffee beans are the primary input in the value chain of the industry participants, and volatile prices of coffee beans determine market costs and profit margins. During the five years to 2018, coffee bean prices are projected to decrease, which will lower the market costs and increase its profits.

The coffee shop locations are distributed according to population as well as the level of household incomes. Since coffee shops are mostly seen as a luxury nowadays, Golden is a good area where people are most likely to spend higher amounts on coffee and food. Competitive Analysis

The specialty coffee retail industry has increased through the years thanks to Starbucks and other retail chains. This industry has moderate to high threats as described below.

Threat of New Entrants: Moderate

There is a moderate threat of new entrants into the industry as the barriers to entry are not high enough to discourage new competitors to enter the market. Small coffee shops can compete with the like of Starbucks because there are no switching costs for the consumers. Even though it’s a competitive industry, the possibility of new entrants to be successful is moderate.

Threat of Substitute: High

There are many substitute beverages to coffee, which are mainly tea, water, sodas, and energy drinks. Bars and Pubs with non-alcoholic beverages could also substitute for the social experience of Café 13.

Consumers could also make their own products at home at a fraction of the cost. There is no switching cost for switching to substitutes, which makes the threat high.

Bargaining Power of Buyers: Moderate Pressure

It offers differentiated products with a diverse consumer base. Even though there are no switching costs with high availability of substitute products, Café 13 prices its product mix in relation to its rival stores with prevailing market prices elasticity and competitive premium pricing. Consumers have a moderate sensitivity in premium coffee retailing as they pay a premium for higher quality products but are watchful of excessive premium in relation product quality.

Bargaining Power of Suppliers: Moderate Pressure

The main inputs into the value chain of Café 13 are coffee beans provided by Conscious Coffee located in Boulder, Colorado. This coffee wholesaler has been recognized for its sustainable business practices, the quality of its coffee and its outreach to customers. This makes the cost of switching between substitute suppliers moderate.

Intensity of Competitive Rivalry: High

The industry is mature and growth rate has been moderately low which causes the intensity in competition among companies to be moderately high due to all of them seeking to increase market share.

Local Competition

1. The Windy Saddle is a family-owned cafe located in Golden, Colorado, established in 2007. They offer fresh food made from scratch for breakfast, lunch, and dinner which is offered on the weekends only. They have fresh pastries due to their In-house bakery and also offer drinks ranging from a wide selection of beers, wines, coffee and coffee bean flavors from around the world. Their menu items mainly consist of soups, salads, and sandwiches as well as gluten and vegan options. A new menu is introduced each weekend. Some of their marketing efforts include, Facebook as well as offering discounts to city employees and students on certain days of the week.

2. Hire Grounds offers coffee, tea, baked goods and food. A large majority of students from the Colorado School of Mines frequent this cafe. They offer Mines graduate students a special discount on Tuesdays which include a medium sized coffee, tea, or small hot chocolate for one dollar. Higher Grounds currently is not involved in social media.

3. D’Deli is a sandwich shop that was established in 1975. It was purchased by Al Neighbors in 2004. They carry over 120 fresh ingredients and support local suppliers. They are very active in the community and are proud sponsors of the Colorado School of Mines, Golden High School, Mitchell Elementary, and Fairmount Fire-Rescue. They have a Facebook account but do not seem to update it very often.

Customer Profiles

Ring 3mile radius from Café 13. Population, Census 2014, 24,244 Households, Census 2014, 9,607 Median Age, Census 2014, 33.8 Average Household Size, Census 2014, 2.24

Developing Customer profiles

According to the Census 2014, Golden’s average age is 33.8. However, best customers for coffee specialty houses are 45-74. While Golden is called home to people in their 30s, it is also a place that retirees call home.

Three profiles have been established for Café 13’s customers:

1. Retired in the Suburbs a. 40-plus demographic who chock-a-block with high-income smarties. This Retired

in the Suburbs segment ranks in with one of the highest level of college-educated residents: Over two-time-the-national-average. Add to this a growing population of seniors drawing retirement income, and it all adds up to a median-income range in the $70,000s and $80,000s. Neighborhoods are inhabited predominantly by married-couples. Those who have children tend to have older kids in the 13-to 17-age range. These well-off, well-rounded, and well-heeled residents enjoy lives of multiple comforts, interests, and participation on many levels. Their cupboards house both coffee beans and champagne. The residents’ favorite media selections include: USAToday.com, airline magazines, newspapers, books, the Golf Channel, and public radio.

2. Urban Cliff-Dwellers b. Largely 30-somethings, but also have an above-average number of residents

over 65-years-old. A comfortable, well-kept home, modest vehicles, and a few traditional leisure activities are the consumption characteristics of Urban Cliff-Dweller’s neighborhoods. These segments have the most above-average rankings in

home care. This speaks volumes, declaring that they value home and hearth, and spend their money wisely. As a testament to their hard-working-with-children lifestyles, their food preferences tend toward grab-and-go with several rankings in fast-food restaurants and above-average grocery convenience purchase, including ready-to-eat muffins, energy bars, and bottled coffee drinks. This group does find the time and money to travel, even internationally. In media choices, they rank highest for a wide selection of radio formats, from all-news, to jazz, to alternative music.

3. Married in the Suburbs a. Living happily in the land that the previous generations created as an escape

from city life, including large rambling homes on an acre or two of land. College educated and well-paying white-collar careers, these people enjoy a never-ending supply of new toys, the latest fashions, and other high-life material possessions. Are also home to a slightly-above-average level of people earning self-employment income. These 30-year olds are overwhelmingly married and raising a slightly-above-average number of children of all ages. From their freshly ground coffee in the morning to their imported wine at night, these residents live lives surrounded by a wide range of creature comforts and filled with activities that comprise the quintessential “good life.” They will buy both whole coffee beans from an upscale coffee shop and ground coffee from a donut shop. They are computer savvy and their computer systems are well equipped. Other media interest includes a variety of magazines, books, and news outlets.

Building Sales

The following three ways are simple, yet powerful way to maximize marketing ROI. Once new customers are acquired (the first and most expensive step), they are systematically developed over time with steps 2 and 3.

1. Continually Add New Customers. a. Advertising

I. “In-the Market Media” that reaches people who are actively looking for Café 13’s product.

b. Publicity in the media (news channel, radio)

2. Increase Purchase Frequency a. Upselling b. Cross-selling c. Loyalty-emotionally bond customers to Café 13 and encourage repeat purchases.

(See Tables 1 & 2) d. Media to promote to Current Customers

I. Mail II. Email

III. Social Media- Facebook IV. Remarketing

3. Increase the Size of the Average Sale a. Menu items that offer “Meals” that bundle products together at a special price. b. Weekend Brunch c. Continue offering “back end” products such as gift items, baskets, coffee

gift/frequency cards, coffee, pastries, chocolate, tea, juice, water and soft drinks. d. Suggest complimentary products e. Simply raise prices.

Head/heart Motivators Research to discover their motivators and perceptions are shown below. While “head” motivators are important, over the long-term the best marketers are good at connecting with the heart. Tables 1 & 2

Heart Head

Status Value

Recognition Performance

Peace of Mind Quality

 

Café 13 has the following sales statistics:

• Current Customers 8,113 (56794 transactions ran/7frequency) • Customers visit an average of 364 times per year • Average sale is $2,912 • Gross revenue of $448,725.62 for 2015

The goal is to increase Café 13’s sales by 30% in the next 12 months by:

• Increase total customers to ____(10%) • Increase average annual visit to _____(10%) • Increase average sale to $____(10%)

The total annual sales can jump to $_______; an increase of over ____%

With the goal to increase sales by 30% in the next 12 months, a promotional budget of $13,500 is placed. According to projected sales annually of $448,725.62 the budget was set as a percentage of these forecasted sales of 3% getting a $13,500 figure.

Heart Head

Social events Mailing and e-mailing to current customers

Great customer service Loyalty Programs

“Best Customer” programs

Cross-selling additional transactions

Best Customer Marketing

Identifying Café 13’s best customers, and provide to them with special treatment and marketing to find customers that match the Best Customer profile. “Best Customer” strategies are based on the 80/20 rule and the fact that companies get the most sale and more efficient use of marketing resources by focusing on their top customers.

1. Define and Segment Current Best Customers-Coffee & Breakfast Full-Service Restaurants

a. Householders aged 45 to 74 b. Married couples without children at home c. Married couples with adult children at home d. Households in the Northeast and West

i. Average household spending 106.37 Customers that spend $106.37 a week/$5,531.24 with us.

2. Provide your Best Customers with Extra Attention/Benefits Extra attention/benefits helps ensure that you retain and further develop your BC’s

a. Special social events b. Loyalty programs

3. Profile BC’s and Find New Customers That Mach That Profile

a. Key accounts: Clients that spend more than $106.37 a week/$5,531.24 a year. b. Target accounts: current or potential clients that have key account potential c. Secondary accounts-all other accounts

Survey

It is important to understand our customers so we can respond to their inquiries and to know what they want and think of us. This will help us find out if our business need to make some changes and improvements, as well as try to adapt to the needs of possible new customers so they will be more confident in coming to our business. Some of the questions we asked to customers are listed below:

1. What do you like about Café 13? 2. What are your favorite items from the menu? 3. Have you been to Cafe 13's competition? (Windy Saddle, Higher Grounds) 4. Are you part of the loyalty program? 5. How many days a week do you come to the cafe? 6. What would you change about Cafe 13? 7. How interested are you on having new items on the menu? 8. How interested will you be on having promotions on social media? (Facebook) 9. How happy are you with the prices of the menu? 10. Would you like to see liquor options be added to the menu? (Mimosas, Irish coffee, etc.)

Attached next is a sample of survey questions done to customers.

Café 13

Survey Current Customers

Thank you for being able to meet with us and answer our questions regarding Café 13. Your opinion is very important to us and we will appreciate your thoughts toward our business, this will help us make of our café a better one.

What do you like about Café 13?

How often do you come to Café 13?

__Twice a month __Once a month __ 1-3 times a week __ 4-6 times a week

What are your favorite items on the menu?

Please select the option that best suits you on the scale from 1-5, 5 being the best and 1 being the worst.

Very Little

Little Indifferent Much Very Much

How happy are you with the prices on the menu?

1 2 3 4 5

How interested are you on having new items on the menu?

1 2 3 4 5

How interested will you be on having promotions on social media? (Facebook)

1 2 3 4 5

Would you like to see liquor options be added to the menu? (Mimosas, Irish coffee, etc.)

1 2 3 4 5

Are you part of the loyalty program?

__ Yes __No

What would you change about Café 13?

Age:_______ Gender: ___________ Occupation:_________________________

Branding Process

1. Positioning

a. Café 13 will stand out by being different relative to their competition. Cafe 13 will offer a living room feel that is warm and inviting to the customers unlike the competition. They will offer an eclectic ambiance/décor where their customers will feel like they want to stay for breakfast, lunch or simply a casual meeting. Cafe 13 will also offer a wide variety of beverages and a more extensive breakfast menu that will be introduce at a monthly basis as specials.

b. They will be the first to introduce a “living room” experience to their customers by providing friendly staff, a comfortable place, and customized specialty drink with homemade food.

2. Value Proposition

a. The primary benefit customers get when doing business with Café 13 will be a home away from home feeling. The secondary benefit is friendly and knowledgeable staff that can customize customer’s drinks and foods.

b. From an operational perspective, Café 13’s Value Chain will be as shown as illustrated on Image 1.

Value Chain -Train staff and hold accountable for exceptional customer service -Have knowledgable staff that can introduce a variety of customized options to customers for drinks or food -A budget of 3% for promition is set aside from sales each year to advocate the different atmoshpere proposed relatiove to their competition

Value Proposition -A home-away-from-home feeling -Friendly and knowledgable staff -Customized drink and food

Target Customers - Retired in the Suburbs - Urban Cliff-Dwellers - Married in the Suburbs

3. Brand Image

a. Locally owned and operated cafe that strives to offer the best customer service in the community that offers an inviting living room inspired atmosphere to all its customers.

4. Brand Mission Statement

a. Cafe 13 caters to a variety of different clientele ranging from working professionals to retirees. We offer a living room atmosphere that is comfortable and welcoming along with gourmet breakfast and lunch options. By partnering with other local companies, we are able to offer various items that are locally produced while instilling a sense of community in the minds of our customers.

5. Brand Identity Elements

a. Name: Café 13 b. Colors: At Café 13, the inspired décor portray an eclectic designs and colors.

Being eclectic gives Café 13 a variety of feelings and styles brought together through the use of color, texture and shapes. The colors recommended to be used for Café 13 are carefully selected to give the space more room, but also to be colorful while being careful on balancing them out.

The colors we will be using are:

Yellow-Green: It produces a warming effect, arouses cheerfulness. It is often associated with food.

Orange (somewhere between salmon and terracotta): It gives brightness and energy. It is associated with joy and sunshine. It also represents enthusiasm, happiness, creativity, it has high visibility and it can be used to catch attention and highlight the most important elements of the design. It is perfect for promoting food products.

White: It suggests neutrality balancing all other colors contained with it. It is the color of perfection and it represents new beginnings as well as the positive and negative aspects of all colors. It is reflecting, awakening openness, growth and creativity.

c. Tagline: “A Local Living Room Place”

Marketing Mix

Product Strategies

Café 13 has a variety of products. The business is open Monday-Friday from 6:30 AM to 3:00 PM and Saturday-Sunday from 7:30 AM to 3:00 PM. During these hours, Café 13 specializes in breakfast and lunch delicacies that can be paired with a customized cup of coffee or tea.

Breakfast menu items include:

• That’ll Do Pig- Choice of bagel, egg, pig (bacon, ham, sausage or veggie sausage), and cheese.

• The Classic-Egg, black forest ham, Tillamook cheddar on a flaky croissant. • Italian Scallion-Egg, sundried tomato aioli, scallions, sweet basil pesto, provolone on an

“everything” bagel. • The Veggie-Nator- Eggs, veggies, cheese on choice of bagel. • Eggs to Order- Two eggs, bacon or sausage, hash browns and wheat toast. • We Found Nemo- Cold smoked salmon, cream cheese, capers, red onion, hard boiled

egg, tomato on choice of bagel. • Burrito, Smothered w/ Pork Green Chili- Egg, pig(bacon, ham, sausage or veggie

sausage), potato, pico de gallo, black bean, and corn relish, cheddar jack cheese in a flour tortilla.

• Toasted bagel, Add Cream Cheese-Choice of plain, sesame, or everything bagel • Scrambles:

o Tex Mex- Three eggs, sausage, black bean, and corn relish, scallions, salsa, cheddar jack cheese over hash browns with toast.

o Greek- Three eggs, red pepper, red onion, spinach, kalamata olives, feta over hash browns with wheat toast.

o Aussie- Three eggs, bacon, avocado, tomato, roaring 40’s blue cheese over hash browns with toast.

• Pancakes: o Buttermilk-Light and fluffy served with maple syrup on the side. o Blueberry, Granola, Chocolate Chip or Banana Walnut. o Add Side of Bacon or Sausage

• Quiche or Frittata • Add Side Salad • Kids’ Corner

o Two Scrambled eggs, bacon or sausage w/ toast o Peanut butter and jelly w/chips o Grilled Cheese w/ chips. o Mac-n-Cheese

The breakfast menu has a variety of items that attracts different customers. Café 13’s goal is to be the coffeehouse of choice for the local Golden community, downtown business workers, tourists who visit the city, and student, by providing a higher quality experience than any

competitor. By providing a variety of menu items, such as the breakfast items listed above, they can achieve their goal.

Lunch menu items include:

• Sandwiches, served with house-made pasta salad, coleslaw, or kettle chips. Substitutes include Cup of soup or side salad and Gluten Free Hoagie.

o Reuben- Certified Angus Corned Beef, 1000 island dressing, Swiss, sauerkraut on grilled marble rye.

o BLT- Applewood Smoked Bacon, sliced sun ripe tomato, romaine lettuce and mayo on toasted whole wheat.

o Pesto Grilled Cheese- Sweet basil pesto, sundried tomato aioli, Tillamook cheddar and provolone on whole wheat.

o Turkey Pesto- All natural oven roasted turkey breast, provolone, sweet basil pesto, mayo, tomato, spring mix greens and red onion on whole wheat.

• Daily Specials on board • Soup, Salads and Wraps, All salads can be made as a wrap, Add chips, slaw, or pasta, add

cup of soup. o Southwest Cobb-Spring mix greens, romaine, black bean and corn relish, pico de

gallo, applewood smoked bacon, cheese, sliced egg and tortilla strips with avocado ranch.

o So Cal- Spring mix greens, romaine, all natural roasted turkey breast, avocado, applewood smoked bacon, sun dried tomato, onion, aged swiss with honey lime vinaigrette.

o Soup- cup, bowl, bowl with side salad. The lunch menu items exceed quality from the typical coffeehouse chains. The superior lunch items listed above far exceed customer expectations when coming in to Café 13 for their customized drink.

Apart from their superior breakfast and lunch items, Café 13 also offers pastries made fresh daily in their kitchen along with Internationally Sourced Organic Coffee, Teas, and Chai. Along with their traditional items, they also offer cold drinks that include:

• Can Sodas • Calypso Lemonades • Zing Ice Teas • Boylan Sodas • Izze Sodas • Odwalla Juices • Zola Cocunut Water • San Peligrino • Aspen Pure Water • Dry Sodas • Bing Energy Drink

Café 13 has the ability to upsell and cross sell to their customers in order to increase the average sale. The ability to add a side salad to any of their breakfast and lunch items is a good cross

selling opportunity. Also, each customer that orders can customize their drink or breakfast/lunch item that can increase their total bill (increase the average sale) and can ultimately increase their loyalty (increase purchase frequency).

Café 13’s employees are also an important part of their product mix. Exceptional customer service is a service that Café 13 provides and their employees are highly trained on providing that service. Utilizing their employees to increase the average sale and purchase frequency is key for Café 13’s success. Employees can suggest additional items that pair well with the item the customer is purchasing or upgrades such as instead of chips, the customer can get a cup of soup or side salad for only $1.75.

Apart from the traditional items, Café 13 also has multiple revenue items that include:

• Gift items, baskets, and coffee gift/frequency cards • Coffee • Pastry • Chocolates • Tea • Juice • Water • Soft drinks

The additional items listed above are classified as complementary products. These products can be used in upselling and/or cross selling strategies to increase the average sale and help increase purchase frequency for Café 13. These products should be priced with high profit margins.

Pricing Strategies

With Café 13, they keep the prices of their main menu items under $10 because they feel if they raise the prices, their current customers will be displeased. The café base their prices more off of cost compared to basing it off competitor prices. They know not to overprice their items and came to the conclusion that their customers are fine with the prices they have set for the various items on the menu. The pricing orientation they utilize is increasing purchase frequency. The café offers a loyalty program with their coffee and by purchasing a certain number of coffees; the customer receives the next one free after purchasing the specified amount.

Below is a price/benefit chart for each cafe. This chart lists various items that Café 13 and their competitor, Windy Saddle Café, offer. The chart displays the different prices at each establishment as well as the benefit of those items. The items listed are the café’s core products and some are under one category, such as coffee. They offer different styles of coffee (latte, mocha, drip etc.) so we just included all the styles under on category.

Price Benefit Charts

Café 13

Item Price Benefit Coffee $1.90 - $2.50 • Locally owned

(Boulder) • Organic • Fair Trade Coffee • Sustainable

practices • Buy by the can

Scrambles (3 options) $8.75 - $9.00 • Quality ingredients

• Gourmet item

Cinnamon Rolls (Will find out price, not listed online)

• Made in-house

Windy Saddle Café

Item Price Benefit Coffee Cup – (Will find out, wasn’t

listed online) Pound Bag - $16.00

• Buy per pound • Wide variety of

beans sourced throughout the world.

Breakfast items (6 options)

$4.50 - $7.00 • Quality ingredients • Inexpensive •

Homemade Bakery Item Varies • Gluten-free option • Vegan option • Made with premium

ingredients.

D’Deli

Item Price Benefit D’Deli Original Sandwiches

$7.50 - $9.50 • Fresh ingredients • Wide variety of

options

Hot Sandwiches $7.50 - $9.50 • Fresh ingredients • Wide variety of

options • Served hot

Premium Sandwiches $10.00-$16.00 • Gourmet ingredients

• Wide variety of options

Soup $2.50 for a cup • Gourmet ingredients Rocky Mountain Soda Not listed online • Support local

• 6 flavors

The consumer price orientations that fit Café 13’s customers are Price-conscious and Value-conscious. Some customers prefer that Café 13 have lower prices than some of the competitors on some of their menu items. Whereas, other customers see that on some items such as the Scrambles that are offered, they are getting a good-sized portion for the price they are paying. The pricing tactics that we see fit would be the loyalty program they already have in place for their coffees, free trials, and bundle pricing.

For the free trials they can cut up sample size portions of their baked goods, preferably their cinnamon rolls which they’re known for, and offer the customer a free sample when they are ordering their meal. This would be a great cross-selling tactic as well, especially if the customer is only ordering a coffee. This would increase the ticket sale as well.

For the loyalty program, we suggest that the customers been more aware of it, especially the new customers who are trying Café 13 for the first time. By displaying a sign saying, “Do you know about our loyalty program” or something along those lines, the customer will be more aware that Café 13 has an established loyalty program. With this tactic in place it will increase purchase frequency.

The last tactic that we would like to see implemented would be bundle pricing. Certain menu items will be bundled together such as many fast food chains do. The main item will be offered such as a Scramble and it will be paired with a coffee or juice and some toast/tortillas or a piece of fruit. For lunch we suggest doing a half sandwich half soup option paired with a piece of fruit and drink of choice. Another option would be a whole sandwich paired with a bag of chips and drink of choice. These bundles will be displayed on the board and each will be associated with a number. By doing bundle pricing, Café 13 will increase their average sale by paring their main

menu item with high profit margin items such as a coffee or fruit. A list of the different bundles is displayed below for both breakfast and lunch items.

Breakfast

1B) Tex Mex Scramble served with a regular coffee (juice, add $0.75) and a piece of fruit (baked-good, add $1.25). (May substitute the toast for tortillas) - $11.50

2B) Greek Scramble served with a regular coffee (juice, add $0.75) and a piece of fruit (baked-good, add $1.25). - $11.00

3B) Aussie Scramble served with a regular coffee (juice, add $0.75) and a piece of fruit (baked-good, add $1.25). - $11.00

Lunch

1L) Reuben Sandwich served with a soda and a bag of chips (Fruit, add $0.50). (May substitute the soda for other drink option at an extra charge) - $10.75

2L) BLT served with a soda and a bag of chips (Fruit, add $0.50). (May substitute the soda for other drink option at extra charge) - $10.25

3L) Pesto Grilled Cheese served with a soda and a bag of chips (Fruit, add $0.50). (May substitute the soda for other drink option at extra charge) - $10.00

4L) Turkey Pesto served with a soda and a bag of chips (Fruit, add $0.50). (May substitute the soda for other drink option at extra charge) - $11.00

*A cup of soup or side salad may be added to any option for an additional $1.75

Place Strategy

Cafe 13 is located in a historical building. This is an advantage for the business to attract tourist to their establishment. A disadvantage is parking, no drive-up capability and visibility for customers. Parking is minimal on the side of the business with available parking on the street. This can deteriorate customers to come in. Also, with today’s fast-pace world, people have been used to drive-up coffee houses that instantly receive their coffee and breakfast. This can also deteriorate the average coffee drinker to stop by the establishment. Although Cafe 13 is located in a historical building, there is not much change they can do to the building to make the business stand out more. Regulations prohibit this change, making the visibility be a factor for customer.

A recommendation is made for Cafe 13 to expand their business via online. Because the building plays a role in the business, expanding the business online can increase customers and their purchase frequency who, therefore increase the average sale. The recommendation is to allow customers to place online orders of coffee, breakfast or pastries, pay online and allocated the tip amount they choose, give an estimate of the time they will be picking up their items, and have friendly staff take the order to them when they arrive. Since Cafe 13 has parking on the side of the building, they can specify some spaces for online orders only to have customers park their while Cafe 13’s friendly staff is taking their order to them. With technology today, applications

are now available that can track where a customer is, allowing Cafe 13 to time their orders and drinks. This can replace a drive-up model business.

Another recommendation is for Cafe 13 to sell their products and coffee in bulk online. They currently sell Conscious Coffee and have the opportunity to allow consumers to place orders online. Café 13 could then order more according to the orders placed online. Although consumers would be purchasing it online and taking the product home, it can create word of mouth buzz by friends of the consumers asking where they purchased their coffee. There should be an option that allows the consumer to place the order not only via phone but also online. Along with that idea, there could possibly be an option that lets the consumer place a time in which they would like to pick up the order if they choose so over delivery.

Promotion Strategies The promotional budget for Café 13 is $13,500. According to projected sales annually of $448,725.62 the budget was set as a percentage of these forecasted sales of 3% getting a $13,500 budget.

Creative Strategy The benefits and selling points of the marketing strategy of Café 13 is that it is a locally owned coffee shop with Colorado based coffee (conscious coffee).

- The shop local trends are increasing. - Getting away from corporations

Three Categories of Media

1. Promote to Current Customers Café 13 is planning to promote to current customers by implementing: a. Database Marketing via email b. Social Media such as Facebook with daily specials and promotions, and c. Remarketing

These will help increase purchase frequency as well as loyalty, trying to send relevant messages having an attention level of active processing.

2. Promoting “Via in-the-Market” One of the "In-the-market" mediums that would be good to use is SEO (Search Engine Optimization). Using SEO increases website visibility, traffic and sales online. Some ways to get increased website visibility would be to rewrite and work on the meta tags and meta descriptions. The keywords used in the descriptions are what impact the search results either positively or negatively. The keywords chosen for the meta tags should be what is also used within the web page content. Otherwise, it will negatively impact the search results. While "Googling" coffee shops in Golden, Co, Café 13 does not appear in the top three results but instead shows up in the sixth one. Page titles are also another factor with search results. Page titles should match key terms found in the website content. Key terms should be used according to what you want users to find your site with, not just what sounds good or looks best.

The social media platform that we recommend they continue using is Facebook. Facebook is an excellent place to reach their current customer base as well as reaching new ones. Facebook does need to be updated and checked regularly. After browsing thru Café 13’s Facebook page, we have noticed that the posts are repetitive. This would be a great way to run promotional efforts, contests and discuss events happening at Café 13 or events that Café 13 is a part of. Facebook has changed over the years and is now a great tool for small businesses to increase their presence. With Cafe 13 already having an established Facebook page, an option is available to boost comments. Facebook allows a business to boost their audience based on the location specified by the business. This is an inexpensive option that can send Cafe 13’s comments, videos or post to people. By doing this, Cafe 13 will need to post relevant message that can attract customers that are actively seeking a place to hang out, drink coffee, eat out with their family for breakfast or lunch, or simply to stop by for a quiet place to relax and drink. A recommendation is made for a short, thirty-second video to be made that shows friendly staff making a specialty drink, delicious food, and the location with the friendly voice from the owners inviting everyone to Golden’s Living Room. This can be posted on their Facebook and boost for $10 to $20 to reach 2,000 to 5,000 people around the area specified. This can increase purchase frequency and attract new customers, which is the hardest part of building a sale.

3.Promoting via Personal Selling

Personal selling is not currently apart of our client’s promotional mix but it should be. There are many items that can be used to upsell and cross sell with the higher profit margin items. The items that can be used to cross sell include gift items, baskets, coffee gift/frequency cards, coffee, pastries, chocolate, tea, juice, water and soft drinks. The menu items that can be used to upsell would include offering products that pair well with what they are ordering or offer an upgrade. Upgrades would include offering a cup of soup or a side salad for $1.75 rather than the complimentary side of chips. Customer service plays a critical role in this process and employees would need to be fully trained on how to provide this service. The performance metric that can be used to evaluate the success of their staff would be to track the items used to upsell and cross sell. They can monitor whether or not those specific items are increasing in sales.

Considering the nature of their business, personal selling is not a popular approach to increase their average sale. Personal selling can be molded to meet Café 13’s business model. The suggestion is made to allow current employees to suggest additional items, cross-sell complimentary items, and upsell to premium items that can help the business grow in sales. The approach should be made first with educating employees on the products that are available for customers. This will allow the employee to be knowledgeable and confident when suggesting products. Second, the employee should be competent to deliver exceptional customer service to each customer while suggesting items without making the customer feel overwhelmed. This can be hard for employees to do, therefore the idea of “selling” should not be imposed on them. If Café 13 decides to add this promotional element, it needs to consider the environment needed for employees to feel happy. Selling can be stressful at time, but having a fun, welcoming environment can increase employee morale therefore increasing productivity. With each successful cross sell/upsell, employees should be rewarded with recognition and or small prizes that can be given away daily, weekly, or monthly. Commission would not go with this selling model but having employees understand that with a higher ticket amount can sometimes (hopefully always) lead to a higher tip amount. This can motivate the employee, helping Café 13 reach a higher sales goal each year.