Honolulu Coffee started in 1992 as a small kiosk in Honolulu and has since grown to an international brand specializing in Hawaiian Kona Coffee. The company owns its own coffee farm and processes coffee from "farm to cup". The marketing plan proposes expanding into Vancouver, Canada, targeting executives and students with incomes over $100,000 CAD. Financial projections estimate capturing 0.45% market share within 5 years through promotional activities and an omni-channel retail strategy focusing on the premium coffee experience.

1. 2016
SUBMITTED BY:
Matharu Manpreet
Gual Rafael
Iyer Aditiya
Khan Mozzam
Prieto Andres
Zamora Daniel
4/12/2016
MARKETING PLAN

2. EXECUTIVE SUMMARY
Honolulu Coffee started in 1992 as a small kiosk in Honolulu with the constant dedication
and development it becomes an international brand. They specialize in Hawaiian Kona
Coffee and gourmet foods. Their core competency is “Farm to cup – 100% Kona Coffee”.
According to the 2016 report on Canada’s Coffee market, it states that coffee shows a
moderate volume growth of 4% which is offset by its value growth of 16%. The coffee
market is dominated by 2 brands namely Keurig Canada Inc. and Kraft Canada having
market shares of 33% and 25% respectively. Examining the foodservice sector Starbucks
& Tim Hortons remained the top players.
Strengths
 Sustainable
 Traceable
 Farm to cup
 Unique in store experience
Weakness
 Fairly known
 Small range
 Limited resources
Opportunities
 Popularity of speciality coffee
 Open minded attitude
 Attractiveness to foreign culture
Threats
 Competition
 Already established market
 Tea and coffee pods
Political
 Coffee is free of duty and GST
 No permits or licenses
Economical
 Fifth largest Coffee Market
 Market size growth rate of 11.9%
Socio-cultural
 Coffee pods
 Health conscious awareness
Technological
 Keep up to technological
advancement
 APPs
The target market for Honolulu is the executive officials in downtown Vancouver, whose
annual income is above $100000. As the 100% Kona coffee is the premium coffee
provided to the customers and the company is following the premium pricing strategy
which results in the elastic demand for the product. The company will use various
promotional tools like digital media, out of home, etc.
After market analysis, we can conclude that it is favourable for Honolulu Coffee to enter
Canada through Vancouver as they provide a unique service experience of great appeal
to its growing target market.

3. OVERVIEW OF COMPANY
HONOLULU COFFEE
ARTISAN KONA ROASTER
here are about 650 farms cultivating
coffee in the Kona district. The typical
size of a Kona coffee farm is 3 acres.
Kona coffee represents approximately
95% of the coffees produced on the island.
There are about 3,500 acres of land utilized
in Kona coffee farming, producing about 3.8
million pounds a year, valued at about $14
million.
There are working coffee farms and mills
along the Kona coffee belt that open their
farms to visitors. Plan a visit and you’ll meet
farmers who have a story to tell, millers and
roasters and Kona coffee pickers who pick
each ripe cherry by hand.
Honolulu coffee had a humble beginning in
1992 by starting off as a small Kiosk in
downtown Honolulu. Over the years of
constant development, dedication,
experience and perfection they have now
grown to being an internationally known
brand. The company has already been
established in Asia, in countries such as
Japan and China. Honolulu coffee is based
on Hawaiian style and specializes in serving
Kona coffee. The key aspect that sets
Honolulu coffee apart is that the company
has its own farm (80 acres) where they grow
their own coffee hence allowing them to get
the flavour profile in accordance to their
satisfaction.
Summary of Activities
Honolulu Coffee Company is a coffee retail chain that specializes in Kona coffee and other related
beverages. The company produces, roasts and sells whole bean Kona coffees, tea beverages
and a variety of fresh food items, through its company-operated stores.
T

4. SWOT ANALYSIS
Strengths
 Cost reduction in processing and production as we own the farm
 No supply fluctuation
 Consistency in the product quality
 Sustainable and traceable
 Unique Hawaiian in-store experience and branding
 High end location
 The only farm to cup 100% Kona coffee experience
Weaknesses
 Fairly known brand in Canada
 Limited resources of raw materials for mass market
 Exclusive but not a proprietary product
 Limited participation in retail selling
 Limited coffee product range
Opportunities
 The demand for speciality coffee is a growing trend in Canada
 Vancouverites have an open-mind towards products from other cultures.
 The attractiveness associated with the rituals and service provided by speciality coffee
retailers.
Threats
 There are independent gourmet coffee brands that provide high quality coffee at a cheaper
price
 Difficulty in penetrating an already established market dominated by a
couple of brands
 Increasing popularity in tea consumption
 Popularity of Coffee Pod Machines
 Consumers don’t usually relate Hawaii with a coffee production country
PEST ANALYSIS
Political / Legal
Simple and affordable to import due to the reasons listed below:
 Coffee is free of duty and GST (Goods and Services Tax)-(Most raw food and beverages
are tax-free under Canada’s Excise Tax Act)
 Coffee beans require no permits or licenses, although they are subject to the approval of
the CFIA.(Canadian Food Inspection Agency)
Economic
 The per capita income of Canadians in 2015 was approximately 49,034 CAD
 The per capita spending on coffee is $74.6 CAD monthly. (2015)

5.  Canada is the fifth largest Coffee Market in the world with a size of: $2.7 billion CAD ($2.1
billion USD) (2015)
 The biggest chunk of coffee drinkers had an Income of over $100,000 CAD per year.
(10,195 coffee cups drank in 6 months)
 Canada, with a market size growth rate of 11.9%, is ranked # 2 in the world
Sociocultural Analysis
 According to market surveys, the trend towards consumption of coffee pods is increasing
in Canada. (in 2015 52.8% of coffee drinkers used coffee pods)
 Consumers in Canada are getting more health conscious thus they are switching to
healthy options of coffee or tea.
 Organic is becoming an important claim in coffee, along with fair trade and ethical
sourcing. Reduced-caffeine formats were also still in demand in 2015 but have not been
growing as fast as the wider coffee category
 Consumer demand for a wider product variety and speciality coffees drives growth of the
wider category
 There is a trend that shows a growing interest for taking care of the environment such as
the use of reusable cups.
Technology and Infrastructure
 Honolulu coffee needs keep up to technological advancement for a better customer reach
and for distribution.
 Honolulu coffee is in the position to develop cellphone applications so that they can enjoy
benefits of the emerging mobile wave.
MARKET OVERVIEW
Trends
According to the 2016 report on Canada’s Coffee market, it states that coffee shows a moderate
volume growth of 4% which is offset by its value growth of 16%. The 2 main reasons for the higher
volume growth in recent years is due to:
1. The shift in demand from regular products to speciality offerings
2. Fresh grown coffee beans being replaced by coffee pods which are priced higher but are more
convenient, easier, and quicker and availability of a range of flavours.
As far as the coffee prices are concerned, there has been a significant increase in average unit
price, mainly due to the rise in coffee bean prices coupled with the shift in consumers buying
speciality coffees and coffee pods, which carry a higher price tag. Major sales of coffee comes
from the grocery retailers, and mixed retailers such as Costco and Dollarama are growing. The
overall volume of sales of coffee in the retail channel is twice that of the foodservice channel.
Lastly organic coffee has started seeing a rise in consumer demand due to the rising health
consciousness in Canada, even though it is restricted to a small, niche market.

7. Competition
The coffee market is dominated by 2 brands namely Keurig Canada Inc. with its Van Houtte and
Kraft Canada having market shares of 33% and 25% respectively. Keurig, Tassimo and
Nespresso were the 3 leading single serve coffee brewing systems in Canada and Kicking Horse
Coffee Co Ltd is the leading provider in organic coffee. Examining the foodservice sector
Starbucks & Tim Hortons remained the top players.
Prospects
Fresh ground coffee pods which are being supported by speciality coffees will be the most sort
after category as it has seen a positive trend in consumer demand.
MARKETING OBJECTIVE AND STRATEGY
Mission Statement
“To be recognized and respected as one of the leading specialty coffee companies by providing
the ultimate Kona Coffee experience for our customers in a gracious island setting that reflects
Hawaii’s Aloha Spirit.”1
Marketing Objectives
 To penetrate the market by 2020 and gaining market share of 0.45% approximately
 Managing the brand imagery in order to be seen as premium Hawaiian coffee brand by
2020
 Create awareness so that by 2020 the Vancouverites population will be aware of our
brand
 Increase the sales in Vancouver by at-least 6% every year so as to exceed breakeven
point by the 3rd year
1
(Honolulu, n.d.)

8. Marketing Strategy
Segmentation
 Business People who prefer luxurious products.
 University students or College students who are part of the high per capita household
income group
 Knowledgeable coffee consumers interested in premium and speciality coffees
Target:
 Income
The target market for Honolulu coffee should be business people having an income
bracket of CAD 100,000 or more (12% of Canadian population, 2013). The reason being
the coffee being served at Honolulu coffee is priced higher than the average. (A small
coffee cup would cost approximately CAD $5). This particular income group is favorable
to target as it is the highest spender on coffee products compared to other income
brackets.
 Age & Gender
As the coffee is priced high the age bracket we are looking to target is 35 plus, male or
female. Generation X which is 41% (2015) of the Canadian population.
Positioning:
The only company that provides a unique coffee drinking experience by offering “farm to cup”
100% Hawaiian Kona Coffee.

9. MARKETING MIX
PRODUCT: The product range for the target market is coffee based drinks, speciality coffee
beans, and 100% Kona coffee, freshly baked goods with local ingredients and gourmet food and
merchandise. Product range offered by Honolulu coffee is:
 PEABERRY - Rarest Kona Coffee, intense notes of milk chocolates, sweet spice, raw
honey, and roasted hazelnuts.
 100% Kona - Mild acidity and medium body with notes of honey, milk chocolate and
almonds.
 100% Maui - A complex coffee with a green apple - like acidity, medium silky body with
notes of ripe papaya, sweet guava.
 Honolulu Blend - 10% Kona Blend well balanced with notes of chocolate covered
berries, caramel and roasted almonds.
 Kona Blend - A heavy bodied coffee with complex notes of sweet ripe fruits, raw honey,
milk chocolate and raw almonds. 25% Kona.
 Lava Roast - Darkest roast blend, heavy cream like body and notes of dark chocolate
and cocoa nibs.
 Kona Extra fancy - Notes of wild honey, sweet flowers ripe melon, and milk chocolate.
 Bakery - Pastries, cakes, desserts and savory items.
 Gourmet Food - Artisan chocolate Bar, Tropical Maui Jam, Chocolate covered Kona
coffee beans, Tea, Kona Coffee BBQ rubs, Big Island Bees Honey.
• Premium
Pricing
Strategy
• Downtown,
Vancouver
•Coffee based drinks
•Speciality coffee
beans
•Freshly baked goods
with local ingredients
•Gourmet food and
merchandise
•Promotion through
PR
•Word of mouth
•In-store promotion
and branding
•Media - digital,
radio, out of home PROMOTION PRODUCT
PRICEPLACE

10. PLACE: Downtown, Vancouver, right next to Nelson Square which houses executive’s offices
suggesting it's a high end area.
Vancouver, being a coffee loving city, people are always open and willing to experiment new
beverages from other cultures that is the reason why other coffee companies also selected
Vancouver for starting their business in Canada(*Starbucks)
PRICE: Price being one of the most important factors in the marketing mix has to be well thought
off. It has to reflect the brand image and what it stands for. Honolulu coffee being a brand that
sells exclusive coffee namely 100% pure Kona coffee it has adopted a premium pricing strategy.
The reason being it is the only coffee outlet that sells 100% pure Kona coffee (not blended) that
they farm and most importantly roast themselves. They would like to cater to a niche market and
keep an exclusive image hence going with this particular pricing strategy. Furthermore, the
demand for our product will be elastic demand in nature.
PROMOTION: Honolulu coffee is already making their presence among customers through the
use of social media like Instagram, Twitter and Facebook. They are very popular from these
media. In Canada, they will promote their brand in following ways:
 Promotion through PR
 Word of mouth
 In-store promotion
 Media -radio, out of home
 Digital
Prom
otion
• Souveniers
• Free Shipping for
Special occasions
• Free gifts for certain
purchase
• In - store
promotions
Socia
l
Media
• Facebook
• Instagram
• Twitter
Averti
sing
• Out of Home
• Radio
PR • Special events

11. COMMUNICATION MIX
CHANNEL STRATEGY
 Honolulu coffee has a direct channel strategy as they own the entire channel that starts
from growing the beans to selling them in stores as beans or as a beverage.
 One can also order Honolulu Coffee. 100% Kona beans from any corner of the world and
get it delivered to your doorstep. Domestic shipments are sent via either the United States
Postal Service (USPS) or United Parcel Service (UPS). Shipping costs are calculated at
check-out at Honolulu Coffee Company’s commercial shipping rate. International
shipments are sent via U.S. Postal Service Express Mail or UPS.
 When they arrive in Vancouver we would propose the use of an Omni-channel strategy
on their existing strategy. Omni-channel strategy needs a high digital presence especially
in Vancouver. The Omni-channel customer experience begins with generating awareness
through advertising. Interested consumers will then look up the product online. The
customer can research all of the product attributes on the website and other digital fronts.
They can find the store location for an experience or order coffee beans online and getting
it delivered through domestic logistics and supply chain. The purchase package will
prompt the customer to share the in-store Hawaiian experience on social media and create
personal profiles. Special coupons, offers and new products ranges can be sent as emails
to these new customers who created their profiles. This way, products are supplied with
ease and a good customer base is built.
FINANCIAL ANALYSIS
Market analysis Summary
The Canadian coffee market during 2015 saw a moderate growth in terms of volume (4%) but a
comparatively stronger value growth (16%) reaching sales of 83,590 tonnes and C$2.7 billion.
The current coffee drinker trend shows that there is an increase in popularity of fresh ground
coffee pods and a wider demand for product variety and speciality coffees. The two coffee market
leaders currently are Keurig Canada and Kraft Canada Inc. with shares of 33% and 25%. Honolulu
coffee company will enter the North American market by establishing its first ever outlet in
Vancouver. Vancouver being a market which is very receptive to experimenting and trying out
new beverages from different cultures proves to be a fertile market to enter from. Honolulu coffee
will try and establish a strong loyal, unique customer base.

12. Sales forecast
Honolulu coffee will try and establish a strong customer base by pulling in customers who have
already expressed a demand for the product and new customers who enjoy speciality coffee. The
company will try and capture 0.45% of market share in Vancouver in the first five years. As the
Market is growing by a value of 16% we are assuming that Honolulu coffee will grow by a
maximum of 6% per annum.
Pro Forma Cash flow
Pro Forma Cash flow 2016 2017 2018 2019 2020
Cash Sales CAD
500,000
CAD
580,000
CAD
672,800
CAD
780,448
CAD
905,320
Expenditures
Cash spending CAD
150,000
CAD
174,000
CAD
201,840
CAD
234,134
CAD
271,596
Bill payments CAD
250,000
CAD
290,000
CAD
336,400
CAD
390,224
CAD
452,660
Subtotal spent on
operations
CAD
400,000
CAD
464,000
CAD
538,240
CAD
624,358
CAD
724,256
Repayment of
borrowing
CAD
3,500
CAD
3,500
CAD
3,500
CAD
3,500
CAD
3,500
Long term liabilities CAD - CAD
3,585
CAD
3,961
CAD
3,961
CAD
3,961
Purchase long term
assets
CAD - CAD
3,000
CAD
3,000
CAD
3,000
CAD
3,000
Subtotal cash spent CAD
403,500
CAD
474,085
CAD
548,701
CAD
634,819
CAD
734,717
Net Cash Flow CAD
96,500
CAD
105,915
CAD
124,099
CAD
145,629
CAD
170,603
Cash carry forward CAD - CAD
96,500
CAD
202,415
CAD
326,514
CAD
472,143
Cash balance CAD
96,500
CAD
202,415
CAD
326,514
CAD
472,143
CAD
642,746

13. Market share forecast
Market Share % 2015 2016 2017 2018 2019 2020
Honolulu Coffee 0% 0.25% 0.30% 0.35% 0.40% 0.45%
Kraft Canada Inc. 32.50% 33% 33.50% 33.70% 34.75% 34.80%
Keurig Canada Inc. 25.40% 25.30% 25.30% 26% 24.70% 25.00%
Starbucks coffee Canada
Inc.
4.90% 4.60% 4.30% 3.90% 3.90% 3.85%
Nestle Canada Inc. 4.40% 4.20% 4.20% 4.00% 4.00% 4.00%
JM Smucker Canada Inc. 4.20% 4.20% 4.05% 3.90% 3.90% 3.90%
Kicking Horse coffee
Co Ltd
3.60% 3.60% 3.40% 3.50% 3.40% 3.42%
Tim Hortons Inc. 2.80% 2.70% 2.50% 2.90% 3.20% 3.21%
Others 22.00% 22.00% 22.30% 21.00% 21.00% 21.37%
Breakeven analysis
Honolulu coffee might have average monthly fixed costs of CAD30,000 per month and with a
contribution margin of 65% (as they have high prices and several articles suggest that they have
one of the highest profit margin), then the company will have to have a sales volume of around
CAD 46,152 per month to break even.
CONTINGENCY PLAN
A contingency plan comes into play when the primary marketing plan fails. In this case, Honolulu
coffee’s success in the Canadian market is heavily focussed on the communication mix that the
company will use.
In case the primary communication is not effective,
1. There will be heavy focus on experiential marketing around the brand. 100% Kona is the
brand’s USP.
2. The unchanged quality, exclusivity and luxurious attributes of the Kona beans would be
heavily focussed on Sampling in the name of the taste and aroma.
3. Increased communication strategy would be added to the already existing mix in order to
increase brand awareness. Targeting a niche customer base won’t be easy thus the
communication and marketing mix needs to evolve every time it fails.

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