Marketing planning at just us cafe


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Marketing planning at just us cafe

  1. 1. Just Us Final Assignment Prepared By Fred M’mbololo Page 1 Term Paper on Marketing Planning at Just Us Café which is based in Canada Prepared by Fred M’mbololo (Kenya) updated version- specifically for Slide Share viewers and members Dated: 08/05/2013
  2. 2. Just Us Final Assignment Prepared By Fred M’mbololo Page 2 Executive Summary In Section 1.0, this report starts with analysis the current and future market situation at Just Us cafes using the 5C analysis framework. It also highlights ethical trading issues that have faced the company and it postulates some of the remedies that the Industry should adopt to eliminate unethical practices and ensure that all the companies in the Industry are operating on the same playing ground. In section 2.0, the report also uses the BCG matrix to classify and analysis the competitiveness of Just Us café products and at the same time alluding some of the strengths and limitations of the matrix. Problems of product deletions are also meticulously considered in the light of concentrating on selling only the products which currently have higher margin of profits in comparison to the other products. In section 3.0, it also addresses the challenges that the company struggles with in terms of improving its customer services and trying to increase its customer loyal base. In Section 4.0 the report culminates by making recommendations on how the company can improve its outdated marketing plan by using the 4P’s of marketing, using social media such as face book and twitter, usage of free samples of their new products and creating brand value among other measures.
  3. 3. Just Us Final Assignment Prepared By Fred M’mbololo Page 3 In Section 5.0 the report indicates all the appendices used for the purposes of illustration and elaborating some of the key issues opined here. Financial diagrams are also used repeatedly to try and emphasize on some of the fundamentals of marketing and accounting principles. In Section 6.0, lastly but certainly not least the report shows all the materials that were used for the purposes of compiling it. Among the documents that were used were books, journals and conference papers.
  4. 4. Just Us Final Assignment Prepared By Fred M’mbololo Page 4 Table of Contents: 1.0a 5C Analysis framework for Internal and External Environment……………………………………………………P5 1.1a Customer Analysis……………………………………...P5 to P7 1.2a Competitor Analysis…………………………………….P7 to P9 1.3a Climate (Context)………………………………………..P9 to P11 1.4a Company……………………………………………….P11 to P12 1.5a Collaborators…………………………………………….P13 1.0b Ethical trading………………………………………….. P14 2.0a BCG Matrix……………………………………………...P15 to P18 2.0b Problems of Product deletions…………………… P19 to P19 3.0a Improve Customer Service………………………….P19 to P21 3.0b Ways to increase customer loyal base……………P21 to P25 4.0a Outdated Marketing………………………………….P26 to P31 4.0b Social Media…………………………………………..P31 to P33 5.0a Appendices…………………………………………….P34 to P41 6.0a Bibliography………………………………………….. P42 to P44
  5. 5. Just Us Final Assignment Prepared By Fred M’mbololo Page 5 1.0(a) 5C Analysis framework for Internal and External Environment. Introduction: The 5C analysis is an environmental scan on five key areas; it covers the micro- environmental and the macro-environmental situation. John Wiley and Sons, Inc., An overview © 2005, identify the 4 Cs as Customer Analysis, Competitor Analysis, Climate(Context) Analysis, Company Analysis and some marketers added the 5th C of Collaborators. 1.1(a) Customer Analysis. Type of Customer Served by Location of Customers Preferences Community based Small independent cafes Canada Consumer coffee and Premium quality Loblaws Supermarket and Sobey Kicking Horse and Just Us Café Canada New fair trade and Mainstreams brands E-commerce based Kicking Horse and Starbucks Canada, Europe and United States Numerous tastes Universities Just Us Cafes Canada Organic food and Certified trade products Existing customers Just Us Cafes Canada Certified fair trade products College Students Kraft Food Services United States Social Conscious (Busacca, Costabile, Ancarani, 2008) insists that the analysis of value for the customer is critical in the management of cross-industry competition from both a defensive and offensive position. From a defensive position that’s prevention of entrance into one’s area of activity) to adopt mobile defense strategies that build on the early coverage of value gaps is fundamental. This implies a systematic monitoring of the consonance between the perceived performance of existing products and customer’s expectation.
  6. 6. Just Us Final Assignment Prepared By Fred M’mbololo Page 6 From the above analyzed table, we see that the University market sector is lucrative and prefers what Just us Café has to offer. Therefore they should defend their position so as not to lose some customers to small independent customers are mainly in the community and that could easier extend to include the Universities. And from an offensive position (exploitation of various forms of synergy in order to gain entrance into new markets), to establish critical interactions between different areas of activity by seeking a comprehensive answer to purchase and consumption requirements is very important. Again, a constant focus on the customer is critical to strengthen and supplement the value proposition. Just Us Café could joint venture with Proctor and Gamble as they are an International company, giving instant access to the U.S.A market and they would share the same ideology. Just Us Café could also consider having a strategic alliance with Kicking Horse as they are likely to have the qualified personnel to assist Just Us café to tap the e-based clients and more clients across the globe. But on a closer look Kicking Horse already has a shop in Halifax and is in direct competition with Just Us Café. Moreover they don’t promote the idea of certified fair products and they could be a conflict of management in future.
  7. 7. Just Us Final Assignment Prepared By Fred M’mbololo Page 7 (Kotler and Armstrong, 2010) opine that “A useful tool for assessing competitor strengths and weaknesses is customer value analysis. The aim of customer value analysis is to determine the benefits that target customers value and how customers rate the relative value of various competitors’ offers. In conducting a customer value analysis, the company first identifies the major attributes that customers value and the importance customers place on these attributes. Next, it assesses the company’s and competitor’s performance on the valued attributes”. “The key to gain competitive advantage is to take each customer segment and examine how the company’s offer compares to that of its major competitors. As shown in Figure 18.2, the company wants to find the “strategic sweet spot”- the place where it meets customers needs in a way that rivals can’t. If the company’s offer delivers greater value by exceeding the competitor’s offer on important attributes, the company can charge a higher price and earn higher profits, or it can charge the same price and gain more market share. But if the company is seen as performing at a lower level than its major competitor on some important attributes, it must invest in strengthening those attributes or finding other important attributes where it can build a lead on the competitor.” Therefore when Just Us Café is selecting competitors, it should find the “sweet spot” where it meets customers’ needs in a way that rivals can’t.
  8. 8. Just Us Final Assignment Prepared By Fred M’mbololo Page 8 1.2(a) Competitor Analysis Competitor Products Sold Customer Base Locations & No of Stores Fair Trade certified or not? Second Cup Coffee Retailer 6 in Nova Scotia (360 in total) No Tim Horton Fresh coffee, pastries, lunches Restaurant 2 in Wolf Ville and 21 in Halifax (170 in total) No Starbucks Brewed coffee, hot chocolates, espresso, teas and other specialties Coffee Shop 5 in Halifax and Nova Scotia. (Various across the Globe) No Trident Bookseller and Cafe Organic Coffee Bookshop and Coffee Shop 1 in Halifax. (1 in total) No Java factory Organic Coffee and fair-trade Certified Coffee Coffee shops 1 each in Halifax, Dartmouth and Upper Tantallon (3 in total) Yes Just Us Cafes Coffee and tea Cafes and University outlets and grocery chains 4 cafes in Nova Scotia and 2 in Halifax and 3 university outlets (9 in total) Yes Kicking Horse Coffee and food Shops, food stores, grocery chain and restaurants Various shops in Quebec, Ontario, 1 in Halifax. (Various across the globe) No Proctor & Gamble Coffee Direct Sales United States and Canada Yes Kraft food Coffee Stores and University United States and Canada No Nestle Coffee Direct Sales United States and Canada Yes Coburg Coffee Coffee house Canada Yes Small Independent Cafes Specialty and Premium Coffees Cafes Canada No
  9. 9. Just Us Final Assignment Prepared By Fred M’mbololo Page 9 From the above analyzed table, it is clear cut evident that Just Café has several competitors and some of them are International companies with shops across the globe like Proctor Gamble, Starbucks and Kicking Horse among others. (Bergen and Peteraf, 2002), favor a two-step approach to consider competitor analysis. The first step is listing all the competitors, the products they sell and their location. Just Us Café can identify all the direct and potential threats. It can strategize to cope with the new entrants. I would suggest that Just Us Café go into Joint Venture with Proctor gamble as they are in United States and Canada and better still they promote the same ideology of certified fair trade products like Just Us Café. The second step is evaluation of the competitor’s resources and predicting their next course of action. By looking at how big the competitors are, their financial base and their global trading. Just Us Café can be able strategize, for instance Starbucks has 5 stores in Halifax compared to Just Us Café only 2 stores in Halifax, therefore Starbuck pose a significant threat to Just Us Café, as they have the financial muscle as well.
  10. 10. Just Us Final Assignment Prepared By Fred M’mbololo Page 10 The second stage of the framework model is concerned with the evaluation of the competition’s resources and the prediction of rivalry. They discuss how by understanding your competitor’s resources you can predict the scale of future threats. Therefore for Just Us cafe they need to understand who they are competing with within the local market and big players entering that market, i.e. Trident only have one shop so Just Us Cafe could in turn be a threat to them, Java factory has one café in Halifax has not a threat to Just Us Cafes but they need to watch them closely. Just Us Cafes should also watch out on Second Cup which has 6 cafes in Nova Scotia compared to its 4 cafes, it should likewise be worried by the competition posed by Kicking Horse which has cafes across the Globe. Moreover, Second Cup, Kicking Horse and Starbucks have the financial muscle which Just Us Café should strategies itself and deal with the situation. 1.3(a). Climate (Context) Climate has all to do with the external environment influences and how Just Us Café has to adapt to them. I have used the Pestel framework that was designed by M.E Porter and they stand for: P-Political issues, E-Economical issues, S- Social issues, T-Technological issues, E-Environmental issues, L-legal issues. (a) Political issues: At the moment Just Us Café operates only in Canada which is politically stable and has minimum trade restrictions to foreign competitors like Starbucks and Kicking Horse. Another factor is that the government recognizes certified fair trade products and the importance of equality and fairness in the community. (b) Economic issues: Canada is experiencing recession and some consumers have budgeted incomes, they could consider Just us products as mere substitutes despite their premium quality so that they can save some pennies. However, in the long-term there seem to be a good chance of the economy stabilizing and providing Just us with an opportunity to grow and serve more customers and market.
  11. 11. Just Us Final Assignment Prepared By Fred M’mbololo Page 11 (c) Social issues: Just Us mission to inspire and nurture the human spirits and souls by promoting the community to participate and interact with the company while telling their stories. Just Us goals are continuous improvement in services and premium quality of their products. They thrive to ensure that customers are offered high levels of customer experience. Just Us wants to raise living standards of third world farmers and ensure direct ethical sourcing from them by eliminating middlemen who exploit the farmers. To develop relationships among co-operative members, employees, business associates and the broader community based on honesty and respect and to maintain an ongoing commitment to education, innovation and collaboration. (d) Technological issues: Just Us Café should try to improve their distribution network. The retail outlets are not reliable. They should seek to get a transport and logistics partner to deal with that issue. They should invest in modern high-end brewing machines and other product lines to increase their customer base. They should introduce membership cards and loyalty reward card by partnering with a credit card provide like Visa or Master. They should also invest in social media and have a person to monitor and maintain it. They should hire a Computer expert to install the software and hardware’s required. (e) Environmental issues: Just Us Café uses green sources of energy like solar panels and water. However, they should introduce key performance indicators in this area and reduce energy consumption further by at least 20%. They should invest in water saving technology in their equipment specifications so as to reduce water consumption. At Just Us Café they should reduce recycle their waste products like paper etc., use reusable cups and composting more of the coffee and tea grounds. On the brighter side they are beginning to build new company owned stores and will be able to promote further their ideas of certified fair trade which retail outlets often ignore.
  12. 12. Just Us Final Assignment Prepared By Fred M’mbololo Page 12 (f) Legal Issues: Employees at Just Us should be paid according to Canadian working laws and adhere to the required working hours, minimum age allowed to work, minimum wage guidelines so as to avoid fines and penalties for non-compliance. Just Us Café should also have health and safety regulations which all employees should be educated and trained on. 1.4(a) Company: A useful framework to analyze the company is the SWOT analysis, which stands for S-Strength, W-Weakness, O-Opportunity, T-Threats. Ideally, the company wants to align its strength with the opportunities in the market, whilst making sure that its weaknesses are not exposed to any potential threat. Strengths: Just Us Cafes has a strong brand which is a certified as fair trade and a loyal customer base The atmosphere in the cafes provides customers with a feeling of knowledge and belonging. This has turned into a Just Us culture. They have attracted employees who are eager to communicate the message of their products and promote equality in society. Weaknesses: Many customers believe that coffee is a substitute product meaning that people will buy substitutes depending on price and availability. Although Just Us thrives to provide excellent customer experience, they do this at a cost. They pay their producers fairly and incur costs of certifying fair trade products. This results in high production costs. Low of sufficient marketing budget. Lack of multi channels of distribution network.
  13. 13. Just Us Final Assignment Prepared By Fred M’mbololo Page 13 Opportunities: Emerging domestic and International Markets. Use of social media to attract more customers. Threats: The Canadian economy is in recession meaning customer have less disposable incomes. There emergence of both International and domestic competitors. A number of coffee distributors had developed their own fair trade offerings. 1.5(a) Collaborators. They include distributors, suppliers and alliances. Baden-Fuller and Stopford (ibid, p16) have pointed out that strategic inertia is in-fact far riskier, since it systematically leads to the decline of the company. Just Us café is in a mature market and can’t afford to remain in status Quo. They have to get a transport and logistics partner to deliver their goods as they can’t just rely on retail outlets who don’t promote their products and ethical training. They can team with Proctor and Gamble to gather more customers. On the other hand their suppliers are reliable and supply environmental friendly raw materials for production.
  14. 14. Just Us Final Assignment Prepared By Fred M’mbololo Page 14 1.0(b). Ethical Trading: (Adams, 2002,147) postulates that it’s no longer sufficient for leading retailers to provide consumers with superior product value and customer service, they must also demonstrate their role as citizens. In the above diagrams only few producers pay minimum guaranteed price directly to the producer co-operative as a marketing manager, I would push for legislation for all producers to pay. The Canadian government should also compel all producers to be fair trade certified. Members and obtain licenses to prove the same. The government should also enforce a compulsory code of ethics on all companies and penalties and interest introduced for non-compliance of the rules.
  15. 15. Just Us Final Assignment Prepared By Fred M’mbololo Page 15 2.0(a) BCG MATRIX: JUST US CAFE BCG MATRIX ANALYSIS: Products Market growth rate 2007 Market Share (2007) Relative Market Share(2007) Coffee 55% 80% 1.00 Cocoa 0% 9% 0.11 Sugar 63% 8% 0.10 Tea 342% 3% 0.03750
  16. 16. Just Us Final Assignment Prepared By Fred M’mbololo Page 16 (Proctor and Hazard, 1990a) suggest that, it is a basic assumption of the BCG model that there will be close association between sales volume and profitability/cash flow. A product’s market share and growth rate of the market are the two dimensions of the BCG matrix. According to the current Just Us prevailing portfolio as collected above, the 80% market share was used to calculate the relative market share by dividing all values of the market share of 2007 by 80%. And plotting them on the BCG Matrix, we will get the following results. Cash cows-coffee, has low market growth but high relative market share Problem child- tea, has high market growth but low relative market share. Dogs will be Cocoa and Sugar, have both low market growth and relative market share Stars-none., have high market growth and high relative market share Coffee is the cash cow and it will therefore, under BCG matrix it will create positive cash flow and it will not be developed to grow. The management of Just Us would therefore relax and could miss out on the new opportunities of serving more university students by opening more cafes or attracting the new environmental conscious customers to buy their coffee. The cash flow that’s created in the cash cow (coffee in this case) would be invested in the problem child (tea) to increase market share and reach a strong competitive position. This would then bring the unit of the tea into the star square and when the market reached saturation point the star would become a cash cow to provide cash flow for other units. The two products cocoa and sugar have a low relative market share and a low market growth rate hence is in the dog unit. Under the BCG matrix one would harvest the money before the product died. These products would be financially starved off instead of being invested more into therefore Just Us would lose potential growing market. Richard Hammer mesh, who made a study of the disadvantages of the BCG matrix, considered that the portfolio planning was earlier on useful when making decisions such as disposing off business units, but was much less useful in connection with growth and business development therefore Just Us might not launch the new products like Pumpkins and Cinnamon. The BCG matrix confuses resource allocation with strategy. Planning is not a substitute for visionary leadership, careful attention must be paid by Just Us to
  17. 17. Just Us Final Assignment Prepared By Fred M’mbololo Page 17 the strategy of each business unit and not the strategy of the whole portfolio, which is of course the aim of BCG matrix. Usually products under star have major share in the growth market and relative high market share. Such products may enjoy rapidly growing sales and profits and are likely to generate large cash flows. Just Us has reached the maturity stage and none of their products have such attributes. (Proctor and Hazard,1990b), posit that the limitations of the BCG model are its reliance on market share and market growth as the only two dimensions to be used in assessing product portfolio health. It’s difficult to classify a product as having high or low market share. Also, the current market share held by a product tells us little about the possibility of increasing or maintaining that market share. Some high growth markets are not necessarily attractive. They may well lack size (current or potential) and stability. In the ACCA study pack for P5 Advanced Performance Management by Get through guides,pp.463 for exams for 2012 the main characters give additional limitations of the BCG matrix on the next page.
  18. 18. Just Us Final Assignment Prepared By Fred M’mbololo Page 18
  19. 19. Just Us Final Assignment Prepared By Fred M’mbololo Page 19 2.0(b) Problems of Product deletions: According to George J. Avlonitis, the problems of product elimination are: (a) Market reaction, using the BCG matrix Just us would eliminate coffee and sugar and this would have an impact on the company image and could make it lose customers to their rivals. (b) Financial implications, involving the determination of the product’s contribution to profit centre and the impact of its elimination upon the company’s total sales volume. Eliminating coffee and sugar which have low growth rate could affect the overall profitability of Just Us. (c) Range policy considerations involving an analysis of the impact of product elimination upon the company’s “full-line” policy. By eliminating products like pastries, pumpkins and Cinnamon will prevent existing purchasers of the coffee brand from purchasing more products in addition to the core line. (d) Eliminating products would give the management of Just Us a headache on the possibility of exploration of the executive and selling abilities freed by the product in particular to decide which ventures to invest in that give better returns. (e) Product elimination may prevent management to identify potential new products for instance the introduction of tea and coffee which are not certified fair trade products. 3.0(a) Improve customer service (Macaulay and Cook, 1995) give ten ways to become closer to the customer. They say that in serving the customer, teams must learn better ways and sharpen their skills if they are not to be overtaken by smarter competitions who practice continuous improvement here are some ideas to improve customer experience. (1) Just Us cafes should educate everyone to know their customers and their needs. They carry out systematic customer surveys to gain first hand
  20. 20. Just Us Final Assignment Prepared By Fred M’mbololo Page 20 understanding of their needs the staff should then be empowered to put into action improvements like playing soft music in the background and having sleek, comfortable and decent furniture. (2) Just us café should keep staff informed through regular communications meeting. They should be short and might be results of customer surveys, letters received from customers on the quality of service costs for the month output from the department. A service notice board should be placed in a visible place with regular performance and formation updates (3) Set clear service standards and objectives and monitor and jointly review individual and group performance against them. Just as café should involve staff setting standards such as how long it takes to process customers order letters to customers conforming to company style, use of telephone greeting and handling customer complains. Just Us should also draw up a checklist for the teams to use for monitoring performance. (4) Just us café should give regular feedback to each person on how they are performing. This should include managers as well as staff. This would make the managers more focused on the needs of the team. (5) Encourage suggestions and ideas of procedures day by day. Just us café could also consider buying high end brewing and expresso machines that will allow baristas to act more easily with customers. (6) Occasionally organize out of work events to cement team spirit. A six- monthly team weekend should be initiated based on outdoor activities which could promote a much stronger sense of team identify and belonging (7) In recruiting new staff Just us café should be sensitive to how that person will fit into the team as well as the technical or professional knowledge they bring particular care should be taken to introduce new members by setting clear standards offering appropriate training and coaching them in culture of sharing stories of all stakeholders in the business.
  21. 21. Just Us Final Assignment Prepared By Fred M’mbololo Page 21 (8) Just us café should encourage a cooperative supportive approach towards one another. A positive climate will be readily picked up by the customer create a first name open environment with the chief executive demonstrating by example. (9) Encourage knowledge and understanding of one another’s job to give the team flexibility. Some job rotation could be introduced. Just us café should hold a “get to know your customer” event by inviting members of staff to be customers for the day. Staff will learn to appreciate different roles their colleagues undertake and expertise could be shared in improving customer experience. (10) Just us cafe should also keep a close watch on team morale which is prone to dip in pressured service environments and lead to bad temper with colleagues and customers or poor performance. Customer outstanding issues should be solved quickly and amicably. (11) Furthermore Just us café should introduce a Facebook page and a twitter account to be able to process customer order quickly and get instant feedback on certain services and products offered. (12) Occasionally send out some gifts like calendars, coffee mugs and cards which have a company logo and as that will make the customers feel appreciated and important. 3(b) Ways to increase customer loyal base Just us café should (1) Build a loyalty ladder to create “Raving fans”, loyal customers are ideal customers, they are loyalists who refer other customers to the business and are even more valuable because they are active advocates. The most valuable because they are active advocates. The most prized clients and customers of all become so energized about the level of service they receive and cannot stop telling others about it. These raving fans are a golden asset and a tremendous source of new customers.
  22. 22. Just Us Final Assignment Prepared By Fred M’mbololo Page 22 Just us café should make concerted effort to identify loyal customers and then offer them such a high level of services that they become cheerleaders for the business, the investment will pay off many times owner by expanding the customer base with many premium customers acquired. (2) Identify a target market for direct mail. Direct mail campaigns work best for reaching a consumer demographic that is defined and identified as a focus group. It arrives at the doorstep of those consumers who are already known to be great candidates for products and services The least expensive and often most effective way to generate an appropriate mailing list is to hold a given way contest. Those who submit their mailing address on an entry form are obviously interested in winning that product or service so this helps to pre- screen them as potential customers. (3) Create a referral program. Just us café should design a referral program that rewards customers for bringing others into the customers base. Referral rewards could be in the form of discounts gifts, invitations to special events or closed door sales events where only certain customers are invited to participate and take advantage of savings, exclusive products or other preferred customers perks. Referral is a natural process of growing the customer base by using existing customers as a resource for community outreach. (4) Weed out bad clients and cater to the best Contrary to popular belief it is sometimes advantageous to lose customers, if the business owner deliberately orchestrates the loss such customers allows a company to focus on attracting those desirable
  23. 23. Just Us Final Assignment Prepared By Fred M’mbololo Page 23 customers who represent the bulk of the business and contribute most to the profit. Identify who the best customers are by applying rule the “80-20” rule which states that 80% of a company’s business comes from 20% of its customers. They from the core of the customer base and by cultivating them, it is possible to create more customers who are similarly extraordinary, loyal and lucrative. (5) Create strategic business alliances Just us café should partner with kicking horse as it has shops in Europe USA and Canada there is a common customer demographic but no actual direct competition Just us café can expand its customer base across the USA and Europe. Those customers who trust kicking horse and have proven their loyalty to them will be inclined to follow their recommendations or perceived endorsements of an alliance partner. By choosing good alliances it is possible to build all sorts of creative campaigns to increase the customer base. They could advertise jointly throw a party or event together team up to support local charities. The alliances are a form of networking that shares the common goal of growing each other’s customers’ base because two heads are often better than one. (6) Use Radio TV and Newspaper advertising, Just us café through mass media can vastly increase the number of customers but many business devalue this kind of effort because they are not willing to pay for advertising. As Just us café is on a tight budget, classified ads in local newspapers are an easy way to enter the local and market. There are many neighborhood papers, professional newsletter trade journals and other publications that offer strategically targeted ad opportunities.
  24. 24. Just Us Final Assignment Prepared By Fred M’mbololo Page 24 Just us café could also use press release in case they change their menu and offer more products like cinnamon and pumpkin. (7) Train and support employee to improve their skills. Valued employees are the ones that Just us café should invest in to help them further their careers and skills by developing a sense of ownership and responsibility that can boost a business customer’s base dramatically. These employees might profit through attending sales or marketing workshops but these investments all payoffs when the employees are able to attract more customers from outside the business and perhaps even charge them a higher rate for more specialized service. (8) Improve the conversion rate for leads and Contacts. Keeping tabs on leads or sending contacts costly mailing can be a drain not an asset. Just us should know their customers personally understand their wants and needs, once a new contract enters the leads database they are automatically cultivated and nurtured to become paying clients without doing any extra marketing or advertising. (9) Covert a single customer into multiple customers. One of the easiest ways to increase the numbers of customers is to concentrate on those already in database Just Us café can introduce new products lines and convince the existing customers to purchase them which is also good as landing a new customer. (10) Introduce new media social media and improve the website. Social media like a Facebook page and a twitter account will act as a customer magnet that never sleeps and a business presence that extends around the entire world almost overhead free. Make the website interested and easy to navigate make incentives irresistible and continue to emphasize a call to action, otherwise internet surveys will never convert into useful leads and real customers.
  25. 25. Just Us Final Assignment Prepared By Fred M’mbololo Page 25 Just us rather than asking for extensive information, for instance, they should only get mailed email address so that follow –up can be done through other methods and means. By Just us café attracting only one percent of them and 1,000 new customers will show up within the first four weeks an astonishing results that is entirely plausible and achievable. (11) Increase visible exposure Brand recognition is powerful Just Us café should capitalize on visible exposure at every possible opportunity and it will increase the customer base while strengthening the brand Just us café should not use generic shopping bags but put business logos and tagline on them. They should give away key chains, coffee mugs that double as promotional items looking for every chance to come out from the shadows. Put up signs; buy uniforms with logos on them and plain delivery vehicles with advertising messages. To be seen by potential clients, the greater is the chance for that business to increase its customer base in a short period of time.
  26. 26. Just Us Final Assignment Prepared By Fred M’mbololo Page 26 4.0(a) Outdated Marketing: 3. Should Just Us! Integrate new media to promote its brand. Introduction: Presently at Just Us Café, print media and the cafes themselves are used for local advertising from Exhibit 8; the current marketing program could be improved through increasing the advertising budget and using student magazines and discount coupons on a monthly or quarterly basis to tap the student market. Also Public Relations events and sponsorship should be increased to at least 3 or 4 times a year. Electronic newsletters could be issued monthly to existing customers and prospective new customers at very low cost and could reach a new market segment and target market. (Bridges, 1992, p92-123), say that brand equity is of interest to managers because of brand loyalty and brand extensions. Brand equity has a positive relationship with brand loyalty. Brand extensions are areas that are affected by the original brand’s equity. At Just Us the brand is well recognized at its locations and could be improved, extended to the Major Universities and all the stores and distribution outlets in Canada to start with by offering more products. (West, Ford & Ibrahim, 2006) describes brand personality as the embodiment of personality traits of the consumer in the brand itself. Just Us Café could leverage its brand through multiple channels of distribution besides the grocery stores. Just Us could set up cafes and carts in hospitals, banks, office, buildings, supermarket and shopping centres.
  27. 27. Just Us Final Assignment Prepared By Fred M’mbololo Page 27 Office coffee suppliers, hotels and airlines are large segment markets which an established brand could tap through licensing agreements. (McGuiness, Brennan, Gendall, 1995) define product sampling as a sales promotion technique by marketers to encourage “consumer trial”. ‘Free Samples’ could be issued to introduce new products into the market and they normally have long term effects which could potentially increase the current market share. Just Us Café should introduce loyalty card scheme and member’s scheme and award loyal customers after attaining certain spends. (Holmes and Lett, 1977) free samples are generally considered to be delicate to new products. They are effective in generating world of mouth for new products. Just us café should use free samples to increase new products segment penetration and expand its customers through this. At Grand Pre location, the visitors should be given coupons and promotion ads on the products and cafes of Just Us so as to tap a new market segment. (Ries and Ries, 1998a) emphasize the importance of being the owner of a word in the customer’s mind and that impression of quality is more important than actual quality. Just Us café should reiterate their story of humble beginning and the fact that they are certified fair trade pioneers. Brands connected to quality in the customers mind are more successful in respect of both market share and profitability. Hence by Just Us introducing new variants through brand extensions, purchasers of the old brands would have something new to try in addition to the core line. (Kotler and Keller, 2012) allude that brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the way marketing activities create brand value. (See Figure 9.6). It’s based on several premises. First, brand value creation begins when the firm targets actual or potential customers by investing in marketing program to develop the brand, including product research, development, and design; trade or intermediary support; and marketing communications. Just Us Café should increase its marketing program budget to cater for the fore-mentioned activities. Next, they assume customers’ mind-sets, buying behavior, and response to price will change as a result of the marketing program; the question is how. Finally,
  28. 28. Just Us Final Assignment Prepared By Fred M’mbololo Page 28 the investment community will consider market performance, replacement cost and purchase price in acquisitions (among other factors) to assess shareholder value in general and the value of a brand in particular. The model also assumes that three multipliers moderate the transfer between the marketing program and the subsequent three value stages. The program multiplier determines the marketing program’s ability to affect the customer mind-set and is a function of the quality of the program investment. The customer multiplier determines the extent to which value created in the minds of customers affects market performance. This result depends on competitive superiority (how effective the quantity and quality of the marketing investment of other competing brands are), channel and other intermediary support (how much brand reinforcement and selling effort various marketing partners are putting forth), and customer size and profile (how many and what types of customers, profitable or not, are attracted to the brand). The market multiplier determines the extent to which the value shown by the market performance of a brand is manifested in shareholder value. It depends, in part, on the actions of financial analysts and investors. Just Us café should embrace the concept of the Brand Value chain by narrating their early humble beginnings and their high ethical standards of their products. Perhaps Just Us café could consider partnering with major competitors to increase their customer’s size and profile and at the same time minimize competition rivalry.
  29. 29. Just Us Final Assignment Prepared By Fred M’mbololo Page 29 Brand Value Chain
  30. 30. Just Us Final Assignment Prepared By Fred M’mbololo Page 30 (Doyle and Stern, 2006), suggest the below drawn framework for improving brand performance. Just Us Café should improve the brand performance by not including too much information on it and focus on its core value of being a certified fair trade producer and build around it. It will improve productivity and raise sales volume. Improving Brand Performance Raise Volume Improve Productivity Brand Revitalization Brand Repositioning Raise Prices Cut Costs
  31. 31. Just Us Final Assignment Prepared By Fred M’mbololo Page 31 (Ries and Ries, 1998b) also further emphasize that first publicity then advertising. At Just Us to be successful in launching new brands it has to concentrate more on publicity (as opposed to advertising) in the media. The best way for Just Us to do this is to be the first brand in a new category. When the novelty value has subsided there has to be investment to maintain the brand’s position. This should be treated as an investment, not a cost. The increased advertising budget could be used to increase public relations channel so as to improve the brand awareness and should also be used to promote TV advertising and Radio Interviews as this reaches a large number of local people. 4(b) Social Media: (Birgelen, Wetzels, Ruyter, 1997) submits that the benefits of customer loyalty to an organization are numerous, loyal customers are less price sensitive. Just Us Café should introduce loyalty card program and they should offer member-only deals, rebates at some threshold level of spending, redeemable points, and/or eligibility for drawings and contests. Sales promotion can be used to boost the loyal customer base especially during the slack periods like January although its effects are usually short term. (Erdem and Swait, 2004) when a brand fails to deliver what has been promised, consumers are likely to doubt the sincerity of a brand’s intention. The Internet website could be improved by having online questionnaires of what new products the customers want. Also to use cookies to monitor customers trends and explain why certain customers were not being converted into buying their products on visiting their websites. Just Us should cease from acquiring old cinemas which are costly to renovate and probably will not yield appropriate profits in return but instead open more coffee shops in Nova Scotia and Halifax to try and consolidate the local market. To expand the customer loyal base, just us cafe not only have promoted credible brand products but also to advertise the same. Ideally just us cafe should as
  32. 32. Just Us Final Assignment Prepared By Fred M’mbololo Page 32 social media to expand the loyal customer base via face book, twitter and a reliable updated website. In the Strategic Direction Journal, Vol 28 issue 6), pp24-27, it states that “Electronic marketing is free. There are no printing paper, postage or mailing costs. By dedicating one person to social media marketing, you will reach thousands of consumers who are waiting to hear more about your brand. It’s not the size of the business but the speed that matters”. Therefore Just Us café should embrace social media like face book and twitter. The benefits associated with social media are that the business would tap into this data stream and connect on a personal level, it would catch trends and market shifts as they happen. Just Us café would less likely to be caught with a warehouse full of outdated inventory or unfilled back orders as they would be listening to customers in real time. They could re-innovate their product lines and improve service. For multi-location business like Just Us they would hear about customers experience with the company via social media before a disgruntled customer calls in and complain. Social media marketing would give the company an opportunity to personally monitor the quality of the company’s customer service.
  33. 33. Just Us Final Assignment Prepared By Fred M’mbololo Page 33 Just Us Café should also use the 4P marketing program for all their products as illustrated below. Source: Adopted from Marketing Management book by Philip Kotler and Gray Armstrong, 13th Edition, 2008, pp76
  34. 34. Just Us Final Assignment Prepared By Fred M’mbololo Page 34 5.0 Appendices Appendix: The 5C analysis framework: Please refer to the detailed 5C analysis as outlined above.
  35. 35. Just Us Final Assignment Prepared By Fred M’mbololo Page 35 Appendix : Pestel Analysis Framework: Please refer to the detailed Pestel analysis as outlined above.
  36. 36. Just Us Final Assignment Prepared By Fred M’mbololo Page 36 Appendix: Swot: Weaknesses -Availability of substitutes. -High Production costs -Lack of sufficient marketing budget. -Lack of multi channels of distribution. Strengths -A Strong Brand & Certified Fair Products. -Loyal Customer Base. -Unique Culture. -Promote equality Opportunities -Emergence of International and domestic markets. -Social Media. Threats -Emergence of International and domestic competitors. -Economic Recession.
  37. 37. Just Us Final Assignment Prepared By Fred M’mbololo Page 37 Appendix: 7 steps of franchising 1
  38. 38. Just Us Final Assignment Prepared By Fred M’mbololo Page 38 Appendix: Financial Diagrams JUST US CAFE VARIANCES ANALYSIS ANALYSIS OF THE ACTUAL REVENUE VS BUDGETED REVENUES BY CAFÉ AND PRODUCT CATEGORY Grand Pre Variance Barrington Variance Wolfville Variance Spring Garden Total Variance Average Variance Coffee $ (12,022.00) $ (13,713.00) $ (14,650.00) $ (8,152.00) $ (48,537.00) $ (12,134.25) Drinks $ 12,263.00 $ (32,706.00) $ (80,553.00) $ (44,045.00) $ (145,041.00) $ (36,260.25) Just Us! Products $ (19,893.00) $ 88,729.00 $ 125,507.00 $ 124,022.00 $ 318,365.00 $ 79,591.25 Merchandise $ (41,349.00) $ 3,039.00 $ (10,777.00) $ (10,273.00) $ (59,360.00) $ (14,840.00) Bodum $ 4,850.00 $ (767.00) $ (2,453.00) $ 97.00 $ 1,727.00 $ 431.75 Lunches $ 9,772.00 $ 16,332.00 $ (12,808.00) $ 26,931.00 $ 40,227.00 $ 10,056.75 Bakery $ 2,184.00 $ (22,563.00) $ (21,186.00) $ (29,519.00) $ (71,084.00) $ (17,771.00) Other $ 5,600.00 $ (216.00) $ 9,683.00 $ 119.00 $ 15,186.00 $ 3,796.50 Total Revenues (38,595.00)$ 38,135.00$ (7,237.00)$ 59,180.00$ 51,483.00$ 12,870.75$ Grand Pre café needs to be advertised more through the Radio, TV and word of mouth Wolfville could be advertised through posters, brochures, leaflets distributed in the hotels and shopping malls JUST US CAFE REVENUES QUARTERLY SALES ANALYSIS BY CAFÉ AND PRODUCT CATEGORY Grand Pre' Wolfville Barrington Spring Garden Total for Quarters Average for Quarters Quarter 1 Sales 134,625.00$ 123,912.00$ 90,562.00$ 123,709.00$ 472,808.00$ 118,202.00$ Quarter 2 Sales 175,217.00$ 138,898.00$ 104,877.00$ 148,356.00$ 567,348.00$ 141,837.00$ Quarter 3 Sales 215,909.00$ 142,984.00$ 112,504.00$ 152,758.00$ 624,155.00$ 156,038.75$ Quarter 4 Sales 213,673.00$ 134,205.00$ 111,142.00$ 180,625.00$ 639,645.00$ 159,911.25$ Sales for the Quarter 1 is less than the other quarters therefore sales promotion and personal selling will be appropriate for this period as its effect is short term and that’s what Just Us Café requires.
  39. 39. Just Us Final Assignment Prepared By Fred M’mbololo Page 39 JUST US CAFES REVENUES MONTHLY SALES ANALYSIS BY CAFÉ AND PRODUCT CATEGORY Grand Pre' Wolfville Barrington Spring Garden Total Sales Average Sales Jan 42,342.00$ 39,907.00$ 31,831.00$ 40,849.00$ 154,929.00$ 12,910.75$ Feb 47,541.00$ 41,493.00$ 30,182.00$ 41,064.00$ 160,280.00$ 13,356.67$ Mar 44,742.00$ 42,512.00$ 28,549.00$ 41,796.00$ 157,599.00$ 13,133.25$ Apr 51,744.00$ 47,461.00$ 32,537.00$ 49,115.00$ 180,857.00$ 15,071.42$ May 61,623.00$ 46,301.00$ 36,503.00$ 50,382.00$ 194,809.00$ 16,234.08$ Jun 61,850.00$ 45,136.00$ 35,837.00$ 48,859.00$ 191,682.00$ 15,973.50$ Jul 67,890.00$ 45,132.00$ 36,737.00$ 46,677.00$ 196,436.00$ 16,369.67$ Aug 79,159.00$ 47,902.00$ 36,015.00$ 46,679.00$ 209,755.00$ 17,479.58$ Sep 68,860.00$ 49,950.00$ 39,752.00$ 59,402.00$ 217,964.00$ 18,163.67$ Oct 75,790.00$ 44,780.00$ 40,229.00$ 61,334.00$ 222,133.00$ 18,511.08$ Nov 57,545.00$ 43,571.00$ 34,476.00$ 56,973.00$ 192,565.00$ 16,047.08$ Dec 80,338.00$ 45,854.00$ 36,437.00$ 62,318.00$ 224,947.00$ 18,745.58$ Total 739,424.00$ 539,999.00$ 419,085.00$ 605,448.00$ 2,303,956.00$ 191,996.33$ Monthly Average 61,618.67$ 44,999.92$ 34,923.75$ 50,454.00$ 191,996.33$ The first three months that’s from January to March loyal customers could be given, allowances & small gifts to boost sales
  40. 40. Just Us Final Assignment Prepared By Fred M’mbololo Page 40 FAIRVIEW TRADE OVERVIEW Annual Growth in Volume of Fair Trade Certified Products Sold in Canada (%) 2004 2005 2006 2007 Average Growth Coffee 41% 52% 66% 55% 54% Cocoa 115% 96% 91% 0% 76% Sugar 139% 158% 97% 63% 114% Tea 54% 74% 68% 342% 135% Volume of Fair Trade Certified Products Sold in Canada Average Market Share % Average Growth % Relative Market Share Growth rate (2007) Market Share (2007) Relative Market Share Coffee 83% 54% 1.00 55% 80% 1.00 Cocoa 11% 76% 0.13 0% 9% 0.11 Sugar 5% 114% 0.06 63% 8% 0.10 Tea 1% 135% 0.01 342% 3% 0.03750 Growth rates(2007) for Coffee is 55%, Cocoa is 0%, Sugar is 63% and Tea is 342% Market Share(2007) for Coffee is 80%, Cocoa is 9%, Sugar is 8% and Tea is 3% To get relative market share all the market shareof the four products was divided by 80%
  41. 41. Just Us Final Assignment Prepared By Fred M’mbololo Page 41 FAIRVIEW TRADE OVERVIEW JUST US MARKET GROWTH RATE VS RELATIVE MARKET SHARE FOR 2007 Products Market growth rate 2007 Market Share (2007) Relative Market Share(2007) Coffee 55% 80% 1.00 Cocoa 0% 9% 0.11 Sugar 63% 8% 0.10 Tea 342% 3% 0.03750 Growth rates(2007) for Coffee is 55%, Cocoa is 0%, Sugar is 63% and Tea is 342% Market Share(2007) for Coffee is 80%, Cocoa is 9%, Sugar is 8% and Tea is 3% To get relative market share all the market shareof the four products was divided by 80%
  42. 42. Just Us Final Assignment Prepared By Fred M’mbololo Page 42 6.0 Bibliography: References: Books 1. ACCA study pack for P5 Advanced Performance Management by Get through guides, pp. 463 for exams for 2012. 2. Al Ries and Laura Ries,1998a, The 22 Immutable Laws of Branding. 3. Al Ries and Laura Ries,1998b, The 22 Immutable Laws of Branding. 4. Baden Fuller C; and Stopford J.M (1992)-Rejuvenating the mature business, London, Routledge (pp16) 5. Doyle and Stern (2006), ‘Marketing Management and Strategy, 4th edition, Prentice Hall. 6. Marketing Management by Philip Kotler and Gary Armstrong, 2008,13th Edition, pp76 7. Marketing Management by Philip Kotler and Gary Armstrong, 2010,13th Edition, pp76 8. Marketing Management by Philip Kotler and Kevin Lane Keller (2012), pp.277-278, 14th Edition ©Pearson Education Limited. 9. Strategic Brand Management by Kevin Lane Keller, 2008, 3rd Edition (Upper Saddle River, NJ), Prentice Hall. 10. Strategic Marketing Management by John Wiley and Sons, Inc, An overview © 2005. 11. West, Ford and Ibrahim (2006), Strategic Marketing’ Oxford Publishing pp.259
  43. 43. Just Us Final Assignment Prepared By Fred M’mbololo Page 43 Harvard Business Review 1. David J. Collins and Michael G. Rukstad, Can you say what your strategy is?, April 2008, pp.89 Journals 1. Adams R.J 2002, “Retail profitability and sweatshops a global dilemma” A journal of Retailing & Consumer Services (pp147-153) 2. Bergen, M and Peteraf, M, 2002, Competitor Analysis: A Broad-Based Managerial Approach, Managerial and Decision Economics, Vol23. No 4/5, (pp1255-1271) 3. Customer Value Metrics by Bruno Busacca, Michele Costabile, Fabio Ancarani, 2008, Journal in Advances in Business Marketing and Purchasing. 4. Erdem, T and Swait. J (2004) “Brand credibility, brand consideration and choice, Journal of Consumer Research, Vol. 31, No. 3,(pp. 191-8) 5. Holmes, J.H and Lett, J.D (Jr (1977), “Product Sampling and word of mouth”, Journal of Advertising Research, Vol. 17 No.5, (pp35-40) 6. International e-marketing: opportunities and issues by Jagdish N Sheth, Arun Sharma, an International Marketing Review Journal. 7. Maximising productivity and capability: issue of professional development for franchisees, an International journal of productivity and performance management, Vol 53 Issue 4 (pp. 345-352) by Paul Davis. 8. McGuiness, D, Brennan, M and Gendall, P (1995), “The effect of product sampling and couponing on purchase behavior. Some empirical evidence” International Journal of Advertising, Vol 14 (pp. 219-30). 9. Product elimination and the Product Life Cycle concept by George J. Avlonitis. A European journal of marketing (Vol 24, Issue 9 (pp. 55-67).
  44. 44. Just Us Final Assignment Prepared By Fred M’mbololo Page 44 10.Strategic Direction, Vol 28 Issue 6), pp24-27, A journal on new media needs marketing. 11.Towards a New Model for Product Portfolio Analysis by R.A Proctor, J.S Hazard (1990), Management Decision, Vol 28, Issue 3. Papers 1. Birgelen, M; Wetzels, M and de Ruyter, K (1997), “Commitment in service relationships: an empirical test of its ancedents and consequences” EMAC conference Proceedings. University of Warwick, (pp1255-71). 2. Bridges S(1992), A schema Unification model of Brand Extensions, Report Number (pp92-123), Marketing Science Institute, Cambridge, M.A