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MNG00314 Grant Cairncross For Business Plan Of Read And Drink Cafe

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MNG00314 Grant Cairncross For Business Plan Of Read And Drink Cafe

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Course Code: MNG00314
University: Southern Cross University

MyAssignmentHelp.com is not sponsored or endorsed by this college or university

Country: Australia

Question:
Describe the Grant Cairncross For Business Plan of Read and Drink Cafe.
 

Answer:
Introduction
The purpose of the report is to give a business plan for Read and Drink Café. The recently opened café is new in the food and beverage industry. The café has come up with a unique idea of giving the customers opportunity to read books over a cup of coffee, which is hardly seen in any other café in the town. Most of the cafes in the town generally serve coffees and snacks but there is barely any café that gives the opportunity to the customer to read books along with coffee and snacks. Thus the paper giving a business plan for Read & Drink Cafe discusses how the café can successfully position it in the Australian coffee industry which is already dominated by coffee houses like Starbucks.
Venture Description
Background to the venture 
Since people lead a fast-paced life these days, they remain stressed either with workloads or with the stress of personal life. Often they seek a place where they can relax and get rid of the stress of everyday life. Most of the people prefer cafés for that, where they will be able to reduce the stress over a cup of coffee and can spend some quality time. Thus, addressing the need located near University of DU the Read & Drink café is a place for coffee lovers. The café’s interior decoration has been designed keeping in mind that the visitors can get a feel of relaxation from the hustle and bustle of the city life. As the name signifies, visitors of the café are provided with opportunity to read books while meeting with friends. Thus in order to ensure successful business of the cafe, the study aims to give an appropriate business plan of Read & Drink café.  
Description of the venture
Read & Drink café is located near the University of DU which is one of the prime locations of the city of Melbourne. The unique feature that distinguishes the café from all other cafes in the city is that it gives the opportunity of reading books to the visitors or customers of the café. The visitors are given access of books of reputed authors. The most unique feature is that the Read & Drink café does not charge extra from the customers for accessing the books. On the other hand, the interior decoration of the café is done with low light lights which have given a cozy atmosphere to the café. Instead of normal chair-table set, bean bags with wooden side table are there which further enhances the atmosphere of the café. On the other hand, the wooden heritage furniture such as armchairs made the café different from other cafes in the city. The other feature is its greenery. The entire café is decorated with potted plants so that a green environment can give a feeling of relaxation to the customers. However, it needs to be mentioned that the café offers a wide range of flavours of coffee to the customers. Beside of national flavours, international flavours of coffee are also offered by the café. Hence, Read & Drink Café is the first café in the city in which a coffee-lover will be able to taste national and international flavours of coffee under a single roof. The café is very new in the coffee industry which is already predominated by large coffee houses like Starbucks, Café Coffee Day, Costa Coffee and many others. Thus, the competition with the large coffee houses seems tough for Read & Drink Café.
Management
Clear rationale along with a particular type of legal structure. 
In order to offer international flavours of coffee, Read & Drink Café needs to import coffee beans from different countries. Thus, it is required the café to adhere to the trade rules and regulations of government in order avoid any legal obligations which can adversely impact on the business process of the company. The café mainly needs to fulfil the directives of Food and Drug Administration (FDA) in relation of adding preservatives and other components. Hence, an expert of legal aspects will be appointed to look after the legal procedures such as fulfilling the terms of income tax, sales tax, trade laws and so on. Apart from that, the owner of the café must take the follow up of the legal activities in order to assure the legal procedures are done accurately.
Strategic planning
The café is required to focus on the business strategy in order to position it in the industry and set objectives for a further success. The main purpose of the marketing objective would be increasing the sales margin by 11% within the next two years. Meanwhile, the other objective is the achievement of brand recognition through the process of strategic marketing. Thus, followings are the below mentioned objectives based on which the strategic planning will be set.

To gain brand recognition in the coming 8 months.
To increase profit margin by 11 %.
An effecting marketing strategy.

Segmentation and targeting:
Demographic
The café will target the customers of all ages. Therefore, the campaigning requires needs be age-oriented. Separate marketing strategy will be required for customers of each group of age. For example, marketing strategy in order target the teenagers will be conducting promotional campaigns near the university campus or the café can sponsor any program of the university. During the program, the students of the university will be offered free sachets of coffees or instant coffees of international flavors in order to increase the brand recognition of the café. Similarly, campaigns will be conducted in corporate offices in order to target the professionals and in old age homes or social programs to attract the elderly people.
Geographic
On the other hand, the people residing in the city will be the main target customer of the café and the secondary target customer will be the people who visit the country for tourism purpose. The domestic customers will be attracted to the café since it offers a place where customers can relax after a hectic day of daily work life. Meanwhile, the tourist customer base will be attracted by the wide range of coffee flavors as the café offers international flavors of coffees.
Psychographic
The book lovers are the major customer base of the company since the café gives a unique opportunity to the customers of accessing good writing pieces of reputed authors which hardly any other café offers.
Marketing Plan
Target audience is clearly identified
According to the above analysis the major target customers of the café are book lovers. Besides, the other customer base includes customers of all ages including teenagers, corporate officials and elderly people. On the other hand, the tourists also occupy a major customer hold.
Brief description of communication strategy
The entire marketing and promotional campaign will continue for a time span of 12 months. The marketing campaign will over multiple media following traditional way of marketing and social media marketing. Hence, the main purpose of the campaign will be inspiring the customers of all ages so that the number of customer visit can be maximized.
The promotional campaign will be done into two parts. Initially, it will be carried for 8 months. After that, the second phase of the marketing will be continued for 4 months and then it can be extended depending on the funds and after taking several follow ups. As part of the social media marketing plan, promotional contents including videos, photos and written contents will be shared over the social media networking sites like Facebook, Twitter and Instagram. Under the traditional mode of marketing advertisements will be aired over television and billboards. On the other hand, promotional campaigns like public events will be conducted in order reach out to maximum number of customers while increasing the brand recognition.
Competitor Analysis
The major competitors of the café are Starbucks, Costa Coffee and Café Coffee Day. These giant coffee houses hold a large customer bases already in the coffee industry in Australia with a strong brand image. On the other hand, the small coffee houses in the city are the secondary competitors for the café.
Brief analysis of the particular market
Café industry of Australia has seen a considerable growth over the last five year as the number of outlets in Australia has been high. While there have been many new cafes over the last five years, giant coffee houses like Costa Coffee and other coffee houses opened multiple branches in all over the country making up the annual growth of café industry by 5.1%.
Rationale clearly demonstrating how the venture concept can be distinguished from competitors
The café has come up with a unique idea of a café which is hardly seen in any other cafés in the town. Most of the cafes in the town generally serve coffees and snacks but there is hardly any café that gives the opportunity to the customers to read books of reputed authors without any charge. Even coffee houses like Starbucks and Costa Coffee do not offer access of wide range of books along with internal flavours of coffee.
Financial Analysis
The particular ‘type’ of funding
Since the cafe is in its initial stage, it has a limited budget. Hence, apart from the owners several other individuals will be investing in business. Apart from the existing investor, Mr Jack, one or more investors will be welcomed so that in order to avoid financial issues as obstacles in the business process. Hence, 60% of the investment will be generated from the cafe owner and investors. Meanwhile, the cafe will generate 30% of the total funds by taking loans from several banks of the country for more financial support since the marketing strategy will require a large amount of financial involvement.

Sources of Capital

 

 

Owners’ Investment (name & % ownership)

 

Read & Drink Café

 $         50,000

Other Investor

               5,000

Other Investor

               5,000

Other Investor

               2,500

Total Investment

 $         62,500

 

 

Bank Loans

 

Bank 1

 $         25,000

Bank 2

            15,000

Bank 3

                        –

Bank 4

                        –

Total Bank Loans

 $         40,000

 

 

Other Loans

 

Source 1

 $         25,000

Source 2

            25,000

Total Other Loans

 $         50,000

 

 

 

 

Summary Statement

 

 

Sources of Capital

 

Owners’ and Other Investments

 $         62,500

Bank Loans

            40,000

Other Loans

            50,000

Total Source of Funds

 $       152,500

 

 

Startup Expenses

 

Bldgs / Real Estate

 $         43,320

Leasehold Improvements

            48,000

Capital Equipment

          120,000

Location / Admin Expenses

            14,500

Opening Inventory

                        –

Advertising / Promo Expenses

               6,000

Other Expenses

            50,000

Total Startup Expenses

 $       586,820

 

 

Statements are provided which help to communicate key financial data associated with the venture 

Café Expenses

 

 

Buildings / Real Estate

 

Purchase

 $                       25,000

Construction

                          15,820

Remodeling

                             2,500

Other

                                      –

Total Buildings and R / E

 $                       43,320

 

 

Leasehold Improvements

 

Item 1

 $                         1,500

Item 2

 $                         6,500

Item 3

 $                       15,000

Item 4

 $                       25,000

Total L / H Improvements

 $                       48,000

 

 

Capital Equipment List

 

Furniture

 $                       35,000

Equipment

 $                       40,000

Fixtures

 $                       15,000

Machinery

 $                       25,000

Other

 $                         5,000

Total Capital Equipment

 $                     120,000

 

 

Location and Admin Expenses

 

Rental

 $                                  –

Utility Deposits

                             2,500

Legal and Accounting Fees

                             5,000

Prepaid Insurance

                             5,000

Pre-opening Salaries

                             1,500

Other

                                500

Total Location and Admin Expenses

 $                       14,500

 

 

Opening Inventory

 

Category 1

 $                         1,500

Category 2

 $                         6,500

Category 3

 $                         2,560

Category 4

 $                         1,500

Category 5

 $                         1,500

Total Inventory

 $                       13,560

 

 

Advertising and Promotional Expenses

 

Advertising

 $                         1,500

Signage

 $                         1,500

Printing

 $                         1,500

Travel & Entertainment

 $                         1,500

Other / Additional categories

                                      –

Total Adv and Promo expenses

 $                         6,000

 

 

Payroll and payroll taxes

 

Expense 1

 $                       25,000

Expense 2

                          25,000

Total Payroll and payroll taxes

 $                       50,000

Risks and challenges 
It can be said that that the major issues that Read & Drink coffee shop might be suffering from need to be addressed immediately. The coffee shop might be face short fall of funding. In order to implement effective marketing, the café will need funds. Another major issue might be regarding with the importation of coffee beans which can be affected in case of breach of any legal directives. Other issues that might seek attention for the success of the café are competition in the industry, legal matters including tax laws and other directives, and an effective market plan.
The above mentioned plan including the marketing strategy and positioning strategy will help the café to mitigate the challenges. In order meet the challenges of legal aspects; the legal management team will be developed.
Bibliography
Aleti, T., Harrigan, P., Cheong, M. and Turner, W., 2016. An investigation of how the Australian brewing industry influence consumers on Twitter. Australasian Journal of Information Systems, 20.
Ashley, C. and Tuten, T., 2015. Creative strategies in social media marketing: An exploratory study of branded social content and consumer engagement. Psychology & Marketing, 32(1), pp.15-27.
Belch, G.E., Belch, M.A., Kerr, G.F. and Powell, I., 2014. Advertising: An integrated marketing communication perspective. McGraw-Hill Education.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan International Higher Education.
Lee, C., Sardeshmukh, S.R. and Hallak, R., 2015. Innovation as a driver of performance in the Australian restaurant industry. CAUTHE 2015: Rising Tides and Sea Changes: Adaptation and Innovation in Tourism and Hospitality, p.224.
McKeever, M., 2016. How to write a business plan. Nolo.
Mulhern, F., 2013. Integrated marketing communications: From media channels to digital connectivity. In The Evolution of Integrated Marketing Communications (pp. 19-36). Routledge.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management. Pearson.
Scott, D.M., 2015. The new rules of marketing and PR: How to use social media, online video, mobile applications, blogs, news releases, and viral marketing to reach buyers directly. John Wiley & Sons.
Sehrawala, S. and Karaduman, ?., 2015. BRAND POSITIONING STRATEGIES OF COFFEE SHOPS IN TURKEY: A COMPARATIVE STUDY OF STARBUCKS & COSTA COFFEE. International Journal of Economics, Commerce and Management, United Kingdom, 3(5).
Tanner, J. and Raymond, M., 2015. Principles of marketing. University of Minnesota Libraries Publishing.
Tuten, T.L. and Solomon, M.R., 2017. Social media marketing. Sage.
van der Eijk, Y., 2013. Tobacco: prohibition, coffee shops, or discouragement?. The American Journal of Bioethics, 13(7), pp.51-53.
Watne, T.A. and Hakala, H., 2013. Inventor, founder or developer? An enquiry into the passion that drives craft breweries in Victoria, Australia. Journal of Marketing Development and Competitiveness, 7(3), pp.54-67.
Zarantonello, L. and Schmitt, B.H., 2013. The impact of event marketing on brand equity: The mediating roles of brand experience and brand attitude. International Journal of Advertising, 32(2), pp.255-280.

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