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Introduction
The business chosen for developing a marketing plan is a small downtown café called L’espace. It is recently opened and does not yet have an established customer base. The café offers an extended selection of eclectic dishes of various cuisines but mainly French and Italian. It was established by a local chef, whose primary objective was to experiment with recipes and create a place where people could enjoy diverse food.
The chosen business is interesting for developing a marketing plan because it does not have a solid mission or vision of how it should be marketed. The owner is a chef and knows food. Also, having the experience of running a restaurant, he knows how to manage his staff. However, he was never really involved in marketing, which is why he needs help with that part. Any business needs thorough marketing strategies and consistent implementation of those strategies because, no matter how good its products or services are (in this case: food, atmosphere, waiting on guests), it is all in vain because no-one will get to appreciate them.
The marketing plan will be focused on several key elements of marketing strategies. These include analysis (of the market, customers, competitors, and company), mission statement, key performance indicators, the three crucial marketing concepts of segmentation, targeting, and positioning (Gavett, 2014), and the seven Ps of marketing mix: product development, price, promotion, place, people, process, and physical environment (Kotler et al., 2016). Particular products and services will be proposed based on the customer analysis through segmentation, targeting, and positioning. The marketing plan will become a guide for L’espace to attract particular groups of customers and thus ensure the café’s development.
Analysis
Market Analysis
Market analysis requires tools such as a marketing information system (MIS) (Kotler et al., 2016). It has three elements: records system, intelligence system for marketing managers to monitor what is going on in the marketing environment, and a research system for them to collect and process the data relevant to the business. Market analysis for L’espace should include processing the café’s customer data and identifying the trends in the market of small cafés. The analysis shows that the market’s major trend is healthy food and nutrition (Poulston and Yiu, 2011). If the selected business wants to succeed, it should adopt healthy food practices, position its food not as an indulgence but as a contribution to the customers’ well-being, and communicate this to the audiences effectively.
Customer Analysis
Customer analysis should consider the three groups of customer behavior factors: cultural, social, and personal (Kotler et al., 2016). The customers of L’espace are highly diverse. Due to the café’s location and its menu, it is capable of attracting young people as well as older ones, people who are looking for a place to work with their laptops during the day and those who want to have a romantic date in the evening.
Competitor Analysis
A business’s competitors are those businesses that pursue providing similar services or otherwise satisfying the same needs of the same customers (Kotler et al., 2016). Competitor analysis is important for a business to ensure that the business does not fall behind in its pursuit of serving the customers. Identifying the competitors of L’espace requires considering the location because a lot of the café’s customers are people whose regular routes lie pass L’espace. Several cafés exist in the neighborhood, but none of them offers eclectic cuisine or the setting like L’espace’s, which is why it is deemed that the selected business is capable of strengthening its competitive advantage and occupying a unique niche.
Company Analysis
According to Kotler et al. (2016), “companies no longer compete – marketing networks do.” It is stressed by researchers that “strong companies develop superior capabilities in managing core business processes such as new market offering realisation, inventory management, and customer acquisition and retention” (Kotler et al., 2016). The company analysis of L’espace shows that the café currently holds strong potential for becoming a successful company because it works closely with farmers, manufacturers, and distributors.
Mission Statement
There is an ongoing debate among marketing management specialists on how beneficial a mission statement is for businesses. One the one hand, mission statements indicate what is important and meaningful about a company’s operation, which is capable of inspiring and motivating its employees for better performance. On the other hand, “some critics claim that mission statements sometimes lack ‘teeth’ and specificity” (Kotler et al., 2016), which means that they rarely provide actual value. However, business missions remain a significant part of communication and public relations. Having a clear mission statement facilitates appealing to certain targets, building customer loyalty, and attracting new customers.
For L’espace, developing a mission statement is challenging because the café does not yet have one and because merely “serving food” is not a strong marketing strategy. In today’s world, those brands are successful that manage to gain customers’ association with them, and it is important to understand that, in the digital world, how customers associate themselves with brands is changing (Edelman, 2010). What is proposed to the café in this marketing plan based on the market’s trends (see Market Analysis) is introducing healthy food principles. This innovation will help define a clear mission. By committing to healthy cooking practices, the café will adopt the philosophy that “healthy can taste good.” Then, it is necessary to effectively communicate to the public through various media that L’espace offers healthy food that is also delicious and diverse. The mission defined based on the philosophy is contributing to the customers’ health and well-being without sacrificing the enjoyability of food.
Key Performance Indicators
Marketing objectives, alternatively referred to as key performance indicators (KPIs), are an integral part of a marketing plan. Normally, marketing plans’ timeframe is one year. Objectives show what needs to be done within this period of time to achieve the business’s goals. Marketing objectives are also important for feedback and evaluation. The list of objectives is used to estimate successes and achievement over the planning period.
The goals set for L’espace include:
- becoming a setting for various categories of guests with various purposes such as having breakfast, lunch, or dinner, working during the day with a laptop, having a romantic date in the evening, or gathering with friends;
- becoming a destination for those seeking healthy, nutritious, tasty, and diverse food.
Simply put, the goal is to become a healthy-yet-tasty-food place and attract many new and different customers. Objectives to do so include:
- hiring or using remote services of a health and nutrition specialist;
- implementing his or her recommendations;
- complying with healthy food guidelines;
- hiring or using remote services of an online marketing / social networking services marketing specialist to act as a marketing technologist (Brinker and McLellan, 2014);
- having the new philosophy of the café’s food becoming healthy but remaining delicious and eclectic communicated to the audiences;
- diversifying the café’s menu to include breakfast, lunch, and dinner meals (currently mostly lunch and dinner);
- diversifying the interior to contain several zones, such as a couch area, several small tables, and several large tables (currently medium tables only);
- adopting a practice where the setting is slightly changed during the day by means of lighting, music, position of curtains, centerpieces (and other decorations) to make the place more romantic in the evening (since the staff’s shifts change at 6 p.m., the employees can make the changes about the interior at the beginning of their shifts).
Segmentation and Targeting
Segmentation is a crucial component of marketing plan. The basic idea of segmentation is that markets consist of groups of people who share needs and requirements for products and services that are different from the needs and requirements of people in other groups (Kotler et al., 2016). These groups are called segments. It has been stressed by researchers that markets do not normally create segments but rather discover them (Gavett, 2014; Kotler et al., 2016). When identifying a segment, i.e. a group of potential customers whose needs and requirements a business will aim to meet, it is necessary to understand that segmentation and demographics are not the same (Gavett, 2014). People of the same age, gender, marital status, and employment status may differ significantly in terms of optimal ways to market products and services to them.
For L’espace, the main criterion for identifying potential guests is the location. The owner says, “We are not a three-Michelin-stars restaurant, we do not expect people to travel miles to taste our food, but we will provide the best service to those who live or work around or just happens to pass by.” This is an indication of where to look for segments: among people who may be close to the café. Four such segments were identified with eight variables (see Table 1).
Table 1. Segmentation for L’espace.
The variables listed in Table 1 include demographic ones (gender, age, employment status, and relationship status) and behavioral ones (healthy food consciousness, taste for good food (being a gourmet), reasons to visit the café, customer loyalty, and benefits recognized in visiting the café). Identified segments include customers who are 16 to 70 years old, both genders, various employment and relationship statuses. In one segment, customers are found to be committed to healthy eating, while in others they are either indifferent or curious. Key identified reasons to visit the café include just having a meal, having a date, meeting with friends, or working during the day. Key benefits in the selected segments are the convenience of the setting and location, suitable atmosphere, and good food.
Targeting means selecting a segment whose needs the business will strive to serve. It is done through identifying the business’s internal capabilities and potential for satisfying a particular segment the best (Kotler at al., 2016). Targeting, therefore, is the next step in the marketing strategy design after segmentation. One of the principal approaches to targeting is that understanding who the customers of a business are is not as important as understanding why they are using the business’s products and services (Gavett, 2014). Although all the four segments described in Table 1 may be reached by L’espace, the segment selected to be targeted within this marketing report is the one represented by Alex, the freelancer.
The key variable for Alex is the reason for him to visit the café: he does so because it is close to where he lives and he can work there during the day with his laptop and a cup of coffee. Besides, he can have breakfast and lunch in L’espace without having to go anywhere. Alex’s segment can feature both men and women of different age and food preferences, but what they share is the interest in a setting convenient for work. Alex does not come to the café every day, but there is an opportunity to increase his loyalty by finding interior and menu solutions. Although Alex is identified as indifferent to healthy food, he is found to be a gourmet. Communicating to him that the café’s food, remaining delicious as it was, now contributes to his health and well-being is capable of increasing his loyalty, too.
Choosing a target segment depends on three factors: size, attractiveness, and overall profitability. The segment represented by Alex is big enough, it is attractive because there are several identified ways to gain new customers from it and contribute to fulfilling the business’s mission, and it is potentially profitable because there are opportunities to build customer loyalty through activities described in the previous paragraph. See Figure 1 for segment targeting information.
Brand Positioning
Brand positioning is the third step in the marketing strategy design. After groups of customers sharing the same needs and requirements are identified (segmentation) and those of them whose needs and requirements a business is capable of meeting the best are selected (targeting), it is necessary to position the business’s products and services for this group. Therefore, positioning is about implementing the strategy based on the analysis. A crucial element of brand positioning is communicating to the audiences that the business by adopting certain practices and standard seeks to satisfy their particular needs.
Positioning for L’espace should start with making the place attractive for freelancers who look for a place to work during the day. Fulfilling the objectives associated with redesigning the internal space (see Key Performance Indicators) will help achieve this goal. It should be communicated to the targets that L’espace is a comfortable place where one can spend several hours working at a laptop and have diverse, delicious, and healthy food for breakfast, lunch, or dinner. Another suggested message to convey to the targeted segment is that L’espace, due to its location in the city’s center, is a great place to spend time during the day if one is planning to go out for clubbing or having a drink in a bar somewhere near the café in the evening.
Also, the café should enhance its presence online to reach the selected segment because it was determined that the segment is active on the Internet and gains much of its information from it (see Figure 1). Since the targets spend a lot of time online, L’espace can use it to build customer loyalty. The café should not only communicate to its followers and subscribers something about L’espace but also various kinds of relevant information. For example, if L’espace’s page on Facebook or its microblog on Twitter becomes for the selected segment the source of information about newest trends in food, the members of the segment are more likely to commit to the café and visit it more often. The reason is that, for the targets, being conveyed something interesting on the Internet makes them like the source of such communication better.
Overall, for the targeted segment, the café should position itself as an active, interesting online source of information and a comfortable, calm place that provides an environment to work during the day and offers good, healthy, eclectic, and nutritious food. An important part of positioning is mapping a business’s competitive position (D’Aveni, 2007). See Figure 2 for where the brand should position itself among competitors in terms or price and quality and Figure 3 for where it should positions itself among competitors in terms of setting and atmosphere.
As seen from the figure, the café should strive to position itself in the top right quarter, i.e. among places with the highest quality and prices. The higher level of pricing compared to other cafés in the neighborhood is justified by the considerably higher quality of food (healthiness, nutrition, diversity, direct collaborating with farmers, producers, and distributors).
It is shown in the figure that L’espace should strive to occupy the highest position by both criteria, i.e. be recognized as both an excellent place for dates in the evening and as a comfortable and calm place for work during the day.
Brand Profile
Brand profiling is another important marketing strategy designing process. The word “brand” should not be used as simply a synonym for “business” because brand is something more. It is the image that represents the connection between a business and its customers (as well as non-customers sometimes) (Kotler et al., 2016). Becoming a successful brand means understanding and addressing specific reasons that make a company’s customers buy from it and not from any of its competitors.
What makes brand profiling important is that a brand profile is the front end in the relations between businesses and their customers, i.e. the way a business is represented to customers, which is exactly the key element of the connection that constitutes a successful brand. Before a business starts to extensively communicate anything to audiences, it should make sure to have a profile, i.e. a coherent and integral image that can be clearly presented.
Once L’espace is on track with fulfilling its marketing objectives (see Key Performance Indicators), the café will be able to put together a strong profile of a place that is devoted to healthiness but cares about good taste and diversity and is suitable both for work and dates, as well as just having a meal or spending time with friends. With such a profile, based on the market analysis and customer analysis, L’espace will be able to communicate more effectively to its targeted segment.
Product Development
A common tool used by market specialists today is the Marketing Mix which encompasses seven aspects of marketing known as the seven Ps: product, price, promotion, place, people, processes, and physical environment (Kotler et al., 2016). The first component of this framework is product which refers to producing something that serves the needs of customers and meets their requirements (Porter and Heppelmann, 2015). It is generally acknowledged among researchers today that successful businesses do not just produce products but rather base their business plans on the needs of particular parts of the market (Kramer, 2011). This concept reflects the necessity for the processes of segmentation, targeting, and positioning described above. It also emphasizes that a product, when marketed to targets, should not be described in terms of its own characteristics but in terms of how it recognizes and serves their needs.
The primarily identified product of L’espace is food. Currently focusing on eclecticism, the café will adopt the principles of healthiness and nutrition and thus create a product that will be marketed much more effectively. The need recognized in the target segment is the need for food that is healthy, tasty, and interesting. What is meant by healthy is that it is cooked under the guidelines of healthiness and nutrition from specialists, i.e. it promotes good digestion and prevents overnutrition and various other issues associated with unhealthy eating. Tasty means that, despite the widely shared idea that healthy food tastes bad, the food served in L’espace remains delicious and is able to impress even gourmets. Interesting means that the chef is committed to experimenting, trying unusual recipes, and combining different cooking techniques and unexpected ingredients. Thus, the level of innovation for the product is determined to be high.
Price
Price Objective
Pricing objective is the concept that encompasses a range of a business’s considerations about selling its products at certain prices. It is part of a marketing plan because it reflects the business strategy and goals, as well as takes into account the customers’ needs and expectations. Considerations for pricing may include increasing short-term benefits for the business, aligning with competitors, or achieving certain financial goals.
For L’espace, the pricing objective is to attract the customers from the targeted segment. It may also be needed to raise prices to a certain level to help the café recover from its renovation. However, the quality should remain the priority to justify the pricing.
Pricing Method
A variety of pricing methods is aimed at choosing the appropriate factors for setting prices. These factors may include demand, costs, competition, value, target return, and others. Since L’espace has a selected target segment, cost-based pricing is not adequate for it because this method ignores customers. The methods that are aimed at attracting customers and gaining their loyalty are value based pricing and demand pricing.
Determine Demand
Demand is a key aspect of marketing because it affects virtually every element of marketing planning. In the selected target segment, the demand was identified in customers for a work-appropriate setting and for good food. The services provided by L’espace are not unique for many customers. Despite the café’s commitment to interesting (experimental, eclectic, and diverse) food, only a small number of customers are ready to give up other cafés and restaurants to remain loyal to L’espace in case it raises its prices. It signifies a high price elasticity of demand (Rassenfosse and Potterie, 2012). It should be taken into consideration in order not to raise the prices to the point where the demand may drop dramatically.
Estimating Costs
L’espace’s costs are unstable due to the café’s constant experimenting with the menu. Besides, the renovation of the menu and the interior will require funds that can be planned but cannot be calculated precisely at this stage. However, although cost-based pricing was not recommended (see Pricing Method), costs inevitably remain a major consideration for pricing. The café will need to establish a certain menu without changing it for the planning period in order to deal with predictable costs after its renovation.
Analyzing Competitors Prices
In the selected target segment, the competitors of L’espace are other cafés in the neighborhood. However, the higher quality of food in L’espace is expected to attract targets identified as gourmets. Therefore, the difference of L’espace’s prices from those of its competitors is justified by higher quality of food and aiming for the segment that appreciates the quality.
Selling Price
- Breakfast for one: 10-15 USD
- Lunch for one: 12-20 USD
- Dinner for two: 40-80 USD
Promotion
Communication Objective
What communication pursues is more than having customers visit the café and eat the food it serves. Communication objectives include building a favorable image, advertising, connecting through new media such as social networking services, and gaining trust and loyalty. For L’espace, the main communication objectives are reaching the target segment (through online communication), winning the interest of its members (through being present in social media and creating messages not only about the café but also about relevant topics of healthy and delicious food), and demonstrating to them that the setting is suitable for working during the day.
Promotion Budget
The budget for promoting the café’s product to the target segment will include costs of renewing and maintaining the website, conducting email communication, conducting Search Engine Optimization (SEO), running accounts in social media, creating print materials such as brochures, producing promotional items, advertising online, and “miscellaneous” for other marketing costs that may occur in the process of implementation. See Figure 4 for the distribution of funds within the budget.
Decide Online and Offline Spend
As seen from the pie chart above, the online marketing activities constitute 63 percent of the budget. It effectively reflects the café’s strategy to reach its target segment via the Internet and maintain the connection with it. Since targets spend a lot of time online and receive the most of the information there, they tend to be more efficiently influenced by online communication than more traditional channels of messaging. The offline spend, however, is also recognized as necessary as it is required for producing physical marketing items such as print materials and promotional products such as cups, cutlery, utensils and so forth with the logo on them.
Place
Distribution Strategies
The café’s location is recognized as its major strength: it should become a suitable setting (for working, romantic dates, having a meal, or just spending time with friends) for people who live or work not far away. Also, the café is a good place for those who want to work during the day and plan to go out in the downtown afterwards. The interior is crucial because it is the setting where the product (food) is distributed. That is why it is suggested in the marketing plan to rethink the interior and modify it every day during the shift change at 6 p.m. to create an adequate atmosphere for work (calm and comfortable) during the day and for dates (romantic) in the evening.
Logistics Management Decision
However, the management should also think about alternative ways to deliver the product to the customers. For example, L’espace may consider food delivery, which is not currently an option. Since the target segment consists of people who are looking for a place to work during the day, launching a delivery service is not recommended in this framework, but the idea may be revisited for further targeting.
People and Process
Service Process Design
“Processes” as one of the seven Ps refer to the way a product is delivered to customers according to a business’s internal procedures. For L’espace, the service process is the work of waiters and waitresses. In order to design a successful service process, it is necessary to provide motivation to the staff and give them regular training on the ethics and standards of serving the café’s guests.
Website Service Process Design
Website service process is crucial because, as it was previously established, online communication is the primary tool for reaching the target segment. The employee running the café’s online marketing should commit to the principles of responsiveness, interaction, and engaging.
Employee Promise
The key components of the employee promise are job responsibilities, financial incentives, and the business’s culture. In order to ensure successful management of its employees to achieve marketing objectives, L’espace should conduct internal communication to convey its redesigned mission and segmentation to the staff.
Physical Environment
The physical environment of providing the service or product is particularly important for L’espace because the physical environment is exactly what makes the atmosphere, and creating an adequate atmosphere is one of the goals of implementing the marketing plan.
- Sound. The music played in the café during the day should be calm not to distract the people who came in to work. The music in the evening should be romantic.
- Smell. The appetizing smells coming from the kitchen should be lightly present in the air but not too strong or distracting.
- Sight. The café currently has an attracting coloring: a lot of white color and soft light shades. It is adequate for both working and having a romantic date. However, lighting should be adjusted to facilitate the atmosphere shift at 6 o’clock.
- Touch. Introducing a new couch area will provide the target customers with more comfortable seating.
Conclusion
The marketing plan is aimed at adjusting the selected business, which is the L’espace café in the downtown, for a selected segment. The market analysis showed that there is potential to attract new customers by designing a new healthy food menu but emphasizing in communications with customers that the healthiness will not take away from the good taste. The target segment is freelancers who look for a place to work with their laptops during the day. To attract them, it is recommended to modify the café’s interior and communicate with them extensively online.
Reference List
11 things all new freelancers need to know, n.d., image, Web.
Brinker, S. and McLellan, L. (2014). The Rise of the Chief Marketing Technologist. Harvard Business Review, 92(7), pp. 82-85.
D’Aveni, R. (2007). Mapping Your Competitive Position. Harvard Business Review, 85(11), pp. 110-120.
Edelman, D. (2010). Branding in the Digital Age. Harvard Business Review, 88(12), pp. 62-69.
Gavett, G. (2014). What You Need to Know about Segmentation. Harvard Business Review, 70(1), pp. 5019-5028.
Kotler, P., Keller, K., Brady, M., Goodman, M. and Hansen, T. (2016). Marketing management. New York: Pearson.
Kramer, M. (2011). Creating Shared Value. Harvard Business Review, 89(1), pp. 62-77.
Porter, M. and Heppelmann, J. (2015). How Smart, Connected Products Are Transforming Companies. Harvard Business Review, 93(10), pp. 53-71.
Poulston, J. and Yiu A. (2011). Profit or Principles: Why Do Restaurants Serve Organic Food? International Journal of Hospitality Management, 30(1), pp. 184-191.
Rassenfosse, G. and Potterie, B. (2012). On the Price Elasticity of Demand for Patents. Oxford Bulletin of Economics and Statistics, 74(1), pp. 58-77.
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