Anna Marie Rittmiller
Marketing Strategies
December 12, 2011
Marketing Plan
Situation Analysis
Internal Environment
Common Grounds Café is a small coffee-shop and restaurant in Middleburg, Pennsylvania that
has been in business for the last four years. It is open for breakfast and lunch, and serves a
mixture of specialty drinks as well as healthy wraps and salads. According to owner/manager
Heidi Potter, the firm’s mission is, “Serving people, making friends, and touching the world.”
Common Grounds Café spends very little money on advertising and promotion. Potter finds
that the best method to market the business is by word of mouth. The café is unique to the
area, and word about the restaurant carries fast in a small town. The space is often rented out
for special events, giving the café free publicity. The owner also takes her to-go menus to local
businesses to promote and encourage people to choose the Common Grounds for their lunch
break. However, the money spent on promotion is mainly for “measureable methods,” or ways
that the owner can physically tell how well the advertising is working. One way Common
Grounds promotes its business is by placing coupons in local newspapers, offering a certain
percentage off of an entrée if clipped and brought in. Another is by having promotions on local
radio stations, offering listeners a discount on their meal if they mention they heard the
promotion. However, very few people have clipped the newspaper coupon or commented
about the radio ad even though it has been advertised for over a year.
The café also hosts a Coffeehouse the last Friday of every month where local musicians perform
covers or original works, and the café has food and drinks for sale. The Coffeehouse brings in a
number of consistent attendees, but Common Grounds is having trouble getting them to be
consistent customers the rest of the month. A new addition to the café’s promotion is the
creation of a Facebook page. The business page does not currently provide a menu or prices,
but it is updated daily on the different desserts and specials the restaurant offers. The problem
with the Facebook page is that the view of daily posts is limited to those who “like” the page,
which many people choose not to do. Despite the Common Grounds Café’s constant
improvements in its management and quality, business has been getting slower and less
consistent. The reasons for the decline are still unclear, but a poor marketing strategy and
influences from the external environments are the most probable causes.
The financial resources of Common Grounds are in a break-even state. They are only making
enough to pay the bills and payroll and maintain the rest of the expenses. In the past year,
there was a small increase in gross revenue, but a bigger decrease in the profit margin. This
may be caused by the rise of prices but the decreased consistency of customers from day to
day. Although the café has been open for four years and has improved considerably, it is not
making any progress when it comes to finances. However, the human organizational resources
are in a great position. Each employee has his or her own strengths in the café that help to get
the work done efficiently, creating a good work environment. The workers enjoy doing what
they do, helping to create better relationships with the customers. One thing that Common
Grounds stresses is customer relationships. To them, this aspect is even more important than
making a profit. They are willing to sacrifice time and money to better their relationships and
the environment of the café.
Common Grounds Café is extremely customer oriented, allowing its customers to be the focus
of activities. Everyone working at the café knows that the customers come first and creating
lasting relationships with them is vital to the success of the business. The importance of
customer relations is unlikely to change, no matter what other changes the business brings.
Since the day the café opened, the type of people and the way things are run have stayed
relatively the same, with small alterations happening gradually throughout the years.
Nevertheless, large changes have occurred, such as additions to items on the menu or the
hiring of a new person. The firm’s culture has handled the changes well and little time is needed
for the employees to adjust. Because the business has only been open for four years, there
have been no major changes that change the culture or affect the way the business is run.
Customer Environment
When Potter first opened Common Grounds Café, her target audience was the young adult, 18
to 36-year-old group, assuming they would be the people most excited about a coffee shop.
Taking into consideration the high number of schools and colleges in the area and surrounding
towns, she believed she would have a large target market. What she did not take into
consideration was the fact that there are not many young adults in the area who are available
to go out to eat for breakfast or lunch. Currently, the target market is the demographic and
geographic characteristics of local businesspeople. There are many businesses in the town and
surrounding area, and businesspeople are the café’s most reliable customers who stop in on a
regular basis for their lunch breaks. However, most of the café’s revenue for breakfast comes
from the senior citizens from town and the surrounding areas.
Common Grounds offers a wide variety of specialty drinks, as well as healthier foods such as
sandwiches, wraps, and salads. Nowadays many people are looking for healthy food options
rather than fried and fattening food. The café provides the healthy food that these people are
searching for. The products are primarily purchased in the café itself, but there is a portion of
sales that are call-in and take-out. If there is a large order from a local business, the manager
will occasionally allow an employee to make a delivery. This boosts customer loyalty and
typically results in returning customers.
Recently, the level of customers at Common Grounds has been irregular. There have been
weeks when the café is empty all day long and the next day there are too many people to seat.
There does not seem to be a pattern and Potter currently does not know the reason behind the
instability, although there are many influences that affect the purchase behavior of customers,
both controllable and uncontrollable. Common Grounds Café is only open for breakfast and
lunch, closing before most schools and offices are finished for the day. The café usually draws a
large group of people from a variety of markets when it has special events, such as the
Coffeehouse and anniversary parties. Weather also plays a huge factor in the purchase behavior
of customers. During school season, the café receives more orders from schools. However, the
school season occurs during the colder part of the year. If the weather is too extreme, many
people will not eat out and the café is forced to close early. The cooler weather also ignites an
increase in the purchase of hot coffee drinks and soups.
The Common Grounds Café is a coffee-shop restaurant, holding the competitive advantage in
that it is completely unique to the area. Potter believes the café’s biggest competitive
advantage is that they are “doing what we do better than others. We have better service,
better food, and a better overall experience.” Regardless, there are a number of people who
choose to eat elsewhere. The café has only been open for four years, so people’s loyalty may lie
somewhere else. Common Grounds is not located on the main road that runs through
Middleburg, but rather on a back road hidden from view from the main road. Many people may
not choose the café simply because of the inconvenient location or not even knowing it
existence. In the article “How to Open a Coffee Bar,” Matt Milletto, the vice president of
Portland Ore.’s Bellissimo Coffee InfoGroup, claims “the location needs to be easily accessible
to customers, especially in the morning” (qtd. in J.W.). Some other features and advantages
that the café’s competitors have are fried food, Coke products, and gluten-free products.
External Environment
Although the Common Grounds Café is a coffee-shop, the majority of its revenue comes from
food products, not coffee products. This fact makes the firm’s major competitors all the
restaurants in the town and surrounding area, while the minor competitors are the
convenience stores and gas stations that sell coffee drinks. The competitors have the benefits
of having existed longer and having better locations than the café. Another major advantage of
the competitors is lower prices. The cheaper prices result in a lower quality product, though,
giving an advantage to the café. However, people are trying to be more frugal in today’s
economy and tend to choose saving money over quality. According to an article in the
Pittsburgh Post-Gazette, when the world is in a financial crisis, “dedication to quality and to
reasonable wages are more expendable” (Millman). The café has recently increased the prices
of both their food and drinks due to the high cost of supply. An article in the McClatchy-Tribune
Business News says the price of coffee has dramatically risen, making it more expensive to buy
even a single cup (“Trouble Brewing”). Another article in the Lewiston Morning Tribune
discusses how the CEO of Starbucks believes speculators are to blame for the high coffee bean
prices, even though there is not a shortage (Hall). People are eating out less and saving when
they eat out for dinners with their families due to the current state of the economy. Because
the café is not open for dinner, it is not attracting family-oriented people.
Since its creation, the café has provided free Wi-Fi as well as a laptop station. Although many
people enjoy and take advantage of the free internet, there have been complaints that laptops
change the atmosphere of the coffee shop. An article in Restaurant Business magazine
discusses how an owner of a small coffee shop banned the use of computers so that people
would “just buy and drink coffee” (TH.S.). Another article in the Colorado Daily, Boulder,
discusses that some managers do not update the Wi-Fi servers or electrical outlets in their
coffee shops so that it will “discourage laptop use without directly sending away customers”
(Klickstein).
To keep up with technology, the café has created a Facebook page to promote its business. An
article in the El Paso Times claims that Facebook, along with other social networking cites, is
“the latest and trendiest way to promote yourself and your business” (“Small-Business
Corner”). One major issue that Common Grounds has in regards to technology is the fact that it
does not have a website. Elizabeth Licata, a desk editor for Nation’s Restaurant News, writes,
“A restaurant without a website isn’t just missing out on a chance to reach new customers. It’s
also giving up control over what Internet-savvy potential guests might see first when they go
looking for it.” The internet is a person’s access to information in today’s world, and without a
website, the café is at a major disadvantage compared to its competitors who have websites.
People in today’s society are becoming increasingly concerned about their weight and health
issues. Many people believe that eating out at restaurants is a major cause of obesity. The
article “Restaurants, Regulation, and the Supersizing of America” states that eating at
restaurants causes obesity because “restaurant food is often rich and portion sizes tend to be
large” (Anderson and Matsa). This belief may cause the café’s customers to stay at home for
meals rather than eat out. On the other hand, an article in Buffalo News claims that “scientific
findings are turning coffee, especially in its darkest, most aromatic roasts, into something of a
health food” (Janecka). According to the article, coffee helps to improve alertness, boost
mental performance, inhibit iron absorption, and helps prevent diabetes. Coffee is also “the
number one source of cell-protecting antioxidants in the U.S. diet” (Janecka). The healthy
aspect of coffee may help to bring in customers specifically for the specialty drinks.
Common Grounds Café currently does not have any social responsibility. A research article
from Ohio State University shows that after conducting in-depth research, they found that
“American consumers displayed a high involvement in environmentally and socially responsible
practices,” showing that customers believe it is important for restaurants to engage in CSR
(Schubert). Although ethical and social responsibilities are not yet an issue for the café to
continue its operations, it may quickly be at a disadvantage if the belief increases that social
responsibility is necessary.
SWOT Analysis
Strengths
Uniqueness to area
Superior product quality
Committed employees
Wide product line with many options
available
Outstanding customer service
Health benefits of coffee
Great customer relationships
Weaknesses
Little spending on marketing
Poor location
Limited financial resources
Too new to be well-known
Opportunities
Increased demand for coffee and its
health benefits
Increased demand for healthy food
Increase in use of internet and social
media
Many local businesses
Many schools in town and surrounding
areas
Threats
Increase in the price of coffee
Economic downturn
Increased use of laptops changing
atmosphere
People eating out less due to the belief
that restaurants help cause obesity
Growing customer interest in
corporate social responsibility
Competitive Advantage and Strategic Focus
Common Grounds Café is a small, friendly coffee-shop/restaurant with many delicious food and
drink options available and the best customer service around.
The strategic focus of Common Grounds Café is and will remain customer intimacy.
Goal and Objectives
The goal for Common Grounds Café is to sell more specialty coffee drinks to increase profit by
using promotional tools and a new distribution system to raise awareness of the current
business customers and include the new target market of teenagers and college students.
Objectives:
Drink specials and samples
o Create a “Drink of the Day” special
o Offer free samples of the “Drink of the Day” to entice customers
Website/Social Media
o Create a Twitter account and keep it updated
o Add on to the Facebook page and keep it updated
o Make Facebook advertisements
o Create a business website that includes the café’s social media and promotes the
healthy aspects of coffee and keep it updated
New menus
o Update the drink menus to include pictures and more color
o Create a To-Go menu for coffee drinks and give them to customers and local
businesses
Create a morning delivery service to local businesses and schools
Target Market
The current target market of Common Grounds Café is the local businesspeople who have jobs
in the town. The new goal of the café is to increase the amount of coffee drinks sold, thus
causing the target market to expand from not only locals and businesspeople, but also to the
teenagers and college students in the area.
Demographics – Because the new target market is not only the businesspeople, but also
teenagers and college students, the ages of the people in the market are varied. High school
students are in the teenage years, while college students range from around 18 to 24 years of
age. Businesspeople become more varied in age, but the typical businessperson would be from
25 to 50 years of age. Both genders are being targeted, as well as all ethnicities and races.
Geographic – Middleburg is a small town located in central Pennsylvania. The town is very
conservative, rural, and focused on the community. The café will be targeting locals from the
town and the surrounding area to keep the sense of community.
Behavioral – Common Grounds Café already has the brand loyalty of the businesspeople in the
town, making a high usage rate for its products. The teenagers and college students tend to like
fast-paced environments, so the quick stops to grab a coffee drink will help them in their busy
lives.
Psychographics – Coffee-shops can be viewed by both businesspeople and students as a place
to relax or get work done, and Common Grounds can be that place for them. Also, students are
always looking for the newest and trendiest things, and coffee-shops and coffee drinks have
recently become popular.
Product Strategy
Heidi Potter created the name “Common Grounds Café” because she wanted the café to be a
place where everyone can come and relax and feel at home – on “common grounds.” Common
Grounds Café has a unique logo featuring a fancy design behind a coffee cup, a globe, and the
name of the company. The logo is placed on all of the coffee cups, as well as the menus and
aprons of the employees. Without having ever been there, a person can know a little about
what the café has to offer just by looking at its name and logo design.
Common Grounds has two major products: its coffee drinks and its food. The café is the only
place in the area that offers specialty coffee drinks. The café offers 12 different flavors of
coffee, and it is bought and roasted at a local coffee provider. Common Grounds also has a
separate menu just for specialty coffee drinks such as lattes, cappuccinos, and other espresso
drinks. There are about 25 different flavored syrups available to add, as well as different types
of milk and creamers, allowing the customer to custom make their drink the way they want it. It
is easy to differentiate CGC’s drinks from competitors because the closest products to the
drinks the café offers are the coffee and cappuccino machines sold at gas stations and
convenient stores. The food offered at the café is extremely different as well. The menu lists a
wide variety of sandwiches, wraps, salads, and soups. The quality of the food is significantly
higher than that of its competitors, and the CGC is the only restaurant in the area that offers
healthy food choices. The food is fresh and delicious and can be customized to the customers
wants and needs.
Pricing Strategy
The prices of Common Grounds Café’s specialty drinks differ based on the customer’s order.
Coffee has a set price with unlimited refills, but espresso drinks are more expensive. The price
of the drink increases with every flavor shot or espresso shot added. Because the goal is
increasing the amount of coffee sales to ultimately increase profits, the prices of the drinks are
staying the same. They also need to stay higher due to the increase in the price of coffee beans.
One of the things that will be added is free samples of the new “Drink of the Day” special. This
addition will hopefully lead to a sale of one of the coffee drinks.
Distribution/Supply Chain Strategy
The current distribution at Common Grounds Café is very limited. The only way for consumers
to get food or coffee from the café is to actually go to the café itself. Furthermore, the location
of Common Grounds is on a back road away from the main street that runs through
Middleburg, and so the location is either extremely inconvenient for its customers or
completely unknown to the public.
The new distribution strategy will be based on getting the product into the hands of the
consumers. Coffee is in a high demand, but time and convenience are very important to
customers as well. Because Middleburg is a small town and does not house any large
businesses or companies, it is not an option to open a kiosk in another location. Instead, the
café will be delivering the coffee drinks to the customers in the mornings.
There are many small businesses and schools in the town, and most employees and
businesspeople enjoy coffee in the morning. But, because Common Grounds is out of the way,
it is an inconvenience for them to stop in to buy a drink. Instead potential customers choose
lesser quality, cheaper drinks at more convenient locations, like gas stations. With the new
delivery system, they will be able to have their favorite drink delivered right to their office,
making the more expensive but higher quality drink a better option.
On rare occasions, Common Grounds will make deliveries of food and drinks to local businesses
if they place a large order. A new or existing employee would be made solely into a delivery
person and make all the deliveries of the coffee drinks to the businesses and schools in the
mornings.
Delivering coffee drinks directly to customers will also help improve customer relationships and
loyalty. After a while of the customers taking advantage of the delivery system, the café’s
employees will get to know its customers on a personal level, increasing loyalty and ultimately
increasing sales.
Integrated Marketing Communication (Promotion) Strategy
Improving Common Grounds Café’s promotion is vital to the success of the new goal. Because
very little money goes into promotion or advertising, there is a limited amount of people who
know that the café exists. Word of mouth is an important way to advertise in a small town, but
there needs to be more in order to be successful.
Drink Specials and Samples
In order for the coffee drinks to sell, customers need to know what types of drinks are
available. To increase the sales of the drinks, the café will create a “Drink of the Day” that will
offer a different type of specialty drink each day for a cheaper price than normal and be
advertised throughout the restaurant. The waitresses will also make sure to emphasize which
drinks are their favorites, as well as informing them about the “Drink of the Day” and the
cheaper price. In addition, Common Grounds will offer free samples of the “Drink of the Day”
to customers who are curious about the drink, but do not want to spend money in case they do
not like it. The samples will show customers how delicious the drinks are and will entice them
to order one and come back for more. These small additions will help to raise awareness about
the drinks and will most likely increase the sales from the customers that come in the café.
Website and Social Media
Common Grounds already has a Facebook page, but it needs to have additions and be updated.
The menu and prices are not included on the page, which is an important aspect that customers
care about when making a decision on where to eat. The page is also a great way to advertise
the coffee drinks. The employees could take pictures of the different types of drinks offered
and post them in an album on the page. They could also put posts about the different drinks
offered and daily include the “Drink of the Day” on the wall. As well as the daily posts,
Common Grounds Café can also create advertisements on Facebook to show up on the side of
people’s profiles. These advertisements can be created as either pay-per-view or pay-per-click
and when clicked on can either take them to the café’s Facebook page or website. The
Facebook page will also need to be updated daily to maximize the amount of awareness and
have people coming to view it each day to see what drinks are offered.
In addition to the Facebook page, Common Grounds needs to create a Twitter. People can
follow Common Grounds and be updated on the different types of drinks that are offered. Also,
people can send a tweet to Common Grounds or tag the café in a tweet to let other people on
Twitter, as well as the café, know how they feel about the food, drinks, customer service, and
much more. Whenever the café is tagged in a tweet, it can respond to the tweet personally,
helping to improve customer relationships and brand loyalty.
The biggest step will be the creation of a website. When people first hear about a restaurant,
the first thing they do is look on their website for a menu and prices. The website will contain
the café’s logo, the mission statement, the owner and employees, location, and pictures of the
café, food, and drinks. Most importantly, the website will include the menus for breakfast,
lunch, and specialty drinks, as well as the prices for all. Because the goal is to increase the
specialty drink sales, the home page can include many pictures of the drinks, a link to the
specialty drink page, and an area to include the “Drink of the Day” drink, picture, and price. The
new delivery service will be advertised on the site as well. Also, coffee has many healthy
benefits that many people are not aware of. Included on the website will be a page listing the
healthy aspects of coffee, its benefits, and research proving that that the claims are legitimate.
Without a website, the café will be disregarded as a choice and potential customers will move
onto the next option.
New Menus
Common Grounds has drink menus that are placed on each table, but they are boring colors
and shaped like place settings, so they often get glanced over. The new menus will be more
colorful, include pictures, and given to each customer before their food menu. To raise
awareness and increase its customer base, the café will make new, colorful to-go specialty drink
menus including links to the website, Facebook page, Twitter account, and delivery service and
distribute them throughout all the businesses and schools in the local area. Hand delivering the
menus will show people the café’s excellent customer service and will help start to build
customer relationships from the start.
Implementation Strategy
Month 1
Month 2
Works Cited
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