GreenLife cafe aims to promote organic and fair trade concepts through its food and beverage offerings in Tsim Sha Tsui East. It will target business professionals and younger customers. Marketing strategies will include competitive pricing using a break-even approach, promoting high quality coffee, food and wine options, and emphasizing excellent customer service. The cafe faces strong competition from Starbucks and McCafe locations in the area but aims to differentiate through its mission and range of products and services.
1. HTM 2121
TOURISM AND HOSPITALITY MARKETING
Â
GROUP PROEJCT
Project Title :F & B Operation in Tsui Sha Tsui East
Names: LAM KA YEE, Iris, 11225906D
LEE CHO YIN, Kristy, 11025186D
LEE KA YU, Jason, 11370913D
KWOK WING TUNG, Kylie, 11205003D
1
3. Name and Logo
GreenLife:
Environment and life cannot be separated
Logo:
Orange - cooperate with Fair Trade
Brown (words) - coffee
Green (leaf) - organic products
3
4. Mission
ďŹHigh quality of Food & beverages &
customer services
ďŹPromote organic and fair tradeâs concepts
and products
ďŹBreak-even
4
8. Ecological trends
Opportunities:
ďFair Trade products
ď¨ promote equity, sustainable development and
organic farming etc.
ďźGaining environmentalist support
ďźPromoting some values
8
9. TECHNOLOGICAL TRENDS
⢠Opportunities
ď˘ Marketing planning and mixes more focused on Internet
ď Nowadays, global internet users >20 billion
ď Global use of mobile devices to access internet â
ď accounted for total internet users : 4.3% in January 2011
8.5% in January 2012
ď˘ Customers : obtain products and services information
online, shopping online
ď˘ â Distribution channel
ď˘ â Promotion channel 9
10. ď˘ Suppliers and distributors :
(1) provide online service
(e.g. homepage which contains product and servicesâ categories with
order and delivery services)
(2) â focused on Internet promotion
(e.g. Facebook page and Apps )
ď˘ F&B operation
computerized system :
( e.g. POS system and Management systemď¨ run the operation and keep
records such as inventory.)
ď˘ âsystematic , âeffective ,âefficiency 10
11. POLITICAL-LEGAL
ď˘ According to the Public Health and Municipal Services
Ordinance (Cap. 132) and other relevant legislation
ď˘ F&B operation : apply corresponding licenses
match numbers of requirements
ď˘ Two licenses for our operation
1)Restaurant licence (from FEHD)
ď˘ sell any kind of food for consumption on the premises
2) Liquor licence (from Liquor Licensing Board)
ď˘ Sell any kinds of Liquor on the premises
11
12. POLITICAL-LEGAL
ď˘Requirements
ď˘fire-fighting equipment (from HK Fire Services Department)
ď˘ensure the health and hygiene conditions (form FEHD)
ď˘ensure buildings safety (from Buildings Department)
ď˘Certified no unauthorized building
+ compliance with Government lease conditions
(from The Land Registry)
ď˘Statutory Plan Restrictions (from Town Planning Board)
12
13. THREATS
ď˘ Costs â
ď˘ Application fee and annual fee of the licenses :
ď˘ Our store : 100-150 sq.m ď¨$3140 (annual fee )
ď˘ maintenance costs ď¨ match the reqirements
ď˘ Time costs :
ď˘ obtain the licences from FEHD
ď˘ provisional food business licence
ď˘ maintain these standards for 6 months ď¨ full licence
13
14. Social cultural trends
⢠Opportunities
ďź E-commerce
ďź Use of smartphone &WIFI-serviceâ
(According to PayPal, more than 8,000 mobile payments were processed on average
per day in Hong Kong in 2011 & 106 million active PayPal users in 190 markets
worldwide buy products from thousands of Hong Kong-based PayPal merchants)
14
15. Social cultural trends
⢠Opportunities
Coffee and tea culture
ďź strong in Asia
(According to the Synovate survey, among the 501 respondents, about one third of residents now
purchase ready-to-drink coffee from outside)
(coffee is imported from 50 different countries world while in China)
ďź Tea culture ď customs of China
15
16. Social cultural factor
ďOpportunities
Healthy eating
ďźSales â in the past few decades
ďźThe choice ď expands to over 2000 items
(Park Nâ Shop and Wellcome & CitySuper, and Jusco, have set up separate organic food sections
or allocated retail space to organic products)
16
18. COMPETITORS ANALYSIS
ď˘ Current Competitors :Coffee shops and cafĂŠ in
TST East
ď˘ 46 coffee shops : 13 large chain stores
33 non-chain stores
ď˘ 13 large chain stores : 9 Starbucks
3 Pacific Coffee
1 Mc Cafe
18
19. MAJOR COMPETITOR
ď˘Starbucks
ď˘ Products :
ď˘ beverages (various kinds with hot and iced)
ď˘ Fresh food & Snacks (e.g. breakfast, lunch, tea, salads
and cakes)
ď˘ Services:
ď˘ Computer with web cam
ď˘ Free Wi-fi services
ď˘ Sofas and chairs with magazines and newspapers 19
20. SERVICE
ď˘ Relaxing environment with soft music
ď˘ Official website and facebook page ď¨ interact with
customers
(obtain the latest information ,history of starbucks )
ď˘ Online registration system ď¨ member ď¨receive special
promotion
ď˘ Delivery services (a minimum of HK$300 per order
,except 12 noon -2pm) 20
21. COMPETITORâS PRICE RANGE
ď˘ Price range ( different categories)
ď Breakfast $8-22
ď Lunch $19-38
ď Snacks and Salad $8-38
ď˘ Beverages (3 different sizes in order)
ď Tall $22
ď Grande $34
ď Venti $42
ď˘ Overall price range :$8-42
21
22. A STARBUCKSâ STORE IN TST EAST
ď˘ Location
Located at : Avenue of Stars ,Tsim Sha Tsui Promenade
âfacing victoria habour
âhaving trees and flowers nearby
âfootpaths in front of the shop ď¨ no cars
âsunlight and sea breeze
ď˘ Environment : relaxing , peaceful and comfortableâ
â fresh air
22
23. STARBUCKâS PROMOTION
ď˘ Promotion
â Press releases
â Internet : Official website ,Facebook,Email
ď˘ Close to the market trends and nowadaysâ technology
23
24. SWOT ANALYSIS
ď˘ Starbucks
ď˘ Strengthens & Opportunities
ď Worldâs brand name company
ď Highest percentage of share of mind
ď High percentage of market share
ď Positive Image : social responsibilitiesâ
ď Enormous amount of capital ď¨ âproducts and servicesâ
quality
ď High bargaining powers among suppliers and customers
ď ď¨ â selling price ď¨ ârevenue
24
25. SWOT ANALYSIS
ď˘Weaknesses & threats
(1) Certain extent of over-expansion
(9 stores in Tst East ď¨ may weaken its own turnovers)
(2)Only focus on western food (lack of variety)
People donât like western food cultureď¨ consumeâ
E.g. many elder in HK ď¨ will go tea restaurant rather
than Starbucks
25
26. MAJOR COMPETITOR
26
MC Cafe
ď˘Products
ďBeverage (Espresso, hot and iced drinks)
ďFrappes and extras
ď˘Services
ďFree WiFi service
ďSofa and chairs
ďOfficial website and facebook pageď interact with customers
27. MAJOR COMPETITOR
27
MC Cafe
ď˘Price ranges
ďThe overall price ranges are between $8 and $26.
ďLocation
ďMost of the stores are located at the ground floor ď convenient
ď˘Promotion
ďCoupons or punch cards
ďSlogans
ďAdvertisements
ďApps
ďNewspaper
30. Supplier
ďOpportunities
Cooperation with Fair Trade
ďźprovide organic food
(According to a recent statistics accounts for 1 to 2% of total food sales worldwide)
Abundant suppliers of certain foods
ďźâ chance to find out the lowest possible food cost
(420manufacturers supplying sauce and seasoning)
30
31. ďThreats
Some food ď fewer food supplies
ďźMeat ď dominated by big supplier
(Spaghettiď only22and15 manufacturers in Hong Kong)
ďźbargaining power â relatively
Supplier
31
32. Marketing intermediaries
Opportunities:
ďNewspaper and magazines
e.g. Daily Economics, Times and Asia Finance
ďDirect mail house
ďMail an advertisement to business firms in Tsim Sha
Tsui East (by cafĂŠâs staff)
ď(match with the target group of customers)
Threats:
â˘Increase costs 32
33. Publics
ďOpportunities
Support from citizen-action publics
ďźEnvironmental groups ď may be attracted by our fair trade
products
(For example, the Environmental Working Group which recommending consumers should look for
organically produced products so as to lead a healthy life ď be attracted to our business)
Support from media groups
ďźEnvironmental groups ď may be attracted by our concept of
healthy eating habits 33
35. Target customers
ďś Business people
ď Tsim Sha Tsui is one of the Central Business District
ďś Younger age groups
ď Majority of buyers in Hong Kong of Western foods tend to be females, who do
more food shopping than males, with younger age groups
ďś Middle class income group
ď Demand for high-value food and beverage is mainly among the 2.3 million
middle class consumers
ďś Behavior: Business customers are willing to pay in purchasing
ď price is not the main factor to decide purchasing
35
41. PRODUCTS- FOOD
ď˘ (1)Spaghetti and rice (main dishes)
(Salmon, meat sauce, bacon & mushroom and
vegetable)
ď˘ (2)Snacks
ď chicken wings
ď Sandwiches (egg, cheese, tuna, tomato for mix and match)
ď fruit salad (fresh organic vegetables and fruit)
ď˘ (3)Cakes (blueberry cheesecake, chocolate cheese cake
and cup cakes) 41
42. EXPLANATION OF FOOD
PRODUCTS
ď˘ âFrom light ď¨ main dishes
Not only for tea time
ď˘ âbreakfast , lunch ,dinner (normal meal)
ď˘ âhealthy and fresh ( use organic products)
ď¨good refreshment for business people
ď˘ Tailor-made for business people
42
43. PRODUCTS- BEVERAGES
ď˘(1)Coffee
Cappuccino, Mocha, Latte and Espresso
(most of the coffee beans ď¨ organic and fair trade products)
ď˘(2)Alcoholic drinks
Red wine
(e.g. Chateau des Leotins 2008 )
White wine
(e.g. Trebbiano d'Abruzzo Badia Frasca,D.O.C. 1998 )
Champagne
(e.g. (A.O.C.) Brut, Pascal Fleury )
ď˘(3) Non-alcoholic drinks
Milk, chocolate, milk tea and lemon tea in terms of hot and iced.
ď˘Special drinks :
Tea (both British tea and Chinese tea)
Fresh fruit juice (apple ,orange & pineapple)
Fruit punch
43
44. EXPLANATION OF
BEVERAGES PRODUCTS
ď˘ â variety of beverages ď¨ different peopleâs taste
ď˘ Refresh ď¨ help to think & brainstorm ideas â
ď˘ Unique beverages among coffee shop and cafĂŠ
ď˘ â Alcoholic drinks
ď˘ Various kinds (red, white wine and champagne)
ď˘ Red wine for meetings
ď˘ champagne for celebrations
44
45. SERVICES
ď˘ Customer service:
provision of service to customer before, during and after
a purchase
ď˘ (1) First stage (before purchasing)
Customer ď¨ can make reservation ( through reservation
system online or by phone call)
Research information (through companyâs homepage
,Facebook page ,email , phone call & Fax)
45
46. SERVICE
ď˘(2) Consumption phase
Core product : Food and beverages
ď˘Facilitating products :
ď˘customer services- taking order of food , handling guestsâ
requires
ď˘Augmented products : (atmosphere) (target customerâs needs)
ď˘quiet and relaxing environment
ď˘Tables, computers, projector, stationery, free wi-fi
ď˘VIP room (private area)
ď˘â conference table ď¨ designated for meetings 46
47. SERVICE
ď˘(3) Detachment phase
ask for feedback ď¨satisfied or not
ď˘â service recovery chance ď¨ create satisfaction to
unsatisfied guests
ď˘create a guests profile (visited 5 times)â§
ď˘Recordsď¨ find out preference and spending patterns
ď˘Keep paid bottle wine ď¨ for next visit
ď˘Quality of service â
47
50. Reasons for choosing break-even pricing
1. Predicting the change of sales when price changes
2. Preventing losses
3. When the business starts generating a positive return
50
55. Pricing strategy-Market skimming
Reasons for choosing:
1. Target customers are price insensitive towards our products
(According to Journal of Business Research, business customers are willing to spend large amounts
of money in their purchase of goods and services, while keeping loyal business customers can
give greater revenue for a supplier or a service provider)
55
56. Pricing strategy-Market skimming
Reasons for choosing:
2. a high quality image of GreenLife can be created
by charging a higher initial price
ďźfirst cafe selling organic products in TST Easr
ďźhigh chanceď grabbing the early adopters
56
58. Place
ďShop 44B, G/F, Harbour Crystal Center, 100 Granville
Road, Tsim Sha Tsui East in Kowloon
ďNear to the Hung Hom and Tsim Sha Tsui MTR Station
ďGround floor ď¨High accessibility and convenient
58
59. Distribution channel : Internet
ďCreate website and facebook
ďUpload Coupon
ď76.4% of all households in Hong Kong have PC at home
and able to access the Internet (according to Thematic Household Survey Report -
Report No. 48)
ďFacebook is the most influential social networking site
in Hong Kong
ďHong Kong users have has grown to 3,700,320 users3,700,320 users
59
61. Promotion
ďśPromotion policy and advertising
⢠Promotion cards on tables
⢠Large poster on the window of cafÊ
ďśPublic relations and sales promotion
⢠Products tasting event
⢠Membership scheme
⢠Different festivals promotions
⢠Issue online coupon
⢠Design an app
⢠Giving sample
61
62. Products tasting event
ďKnowing which products can be main or are most
popular products
ďHeld periodically
ď3 to 5 new products or improved products to be tested
62
63. A membership scheme
ďśEstablish good relationship with customers
ď¨ gain support and loyalty
ďśInvite them to join events
ď¨giving them discount and sample, and using special equipment in
cafĂŠ without extra charge
ďśA-one-year membership
spending $400 or above at once or spending $800 within 2 months
ďśPermanent member
meet other standards to get the membership card
i.e. purchase the coupons or to spend more
63
65. Issuing online coupon
⢠Cooperate with online restaurant guide websites
Open rice Facebook
Customers ⢠Rate GreenLife
⢠Download the coupons
of GreenLife issued
⢠always catch up with
GreenLife
GreenLife ⢠Easy to know the
comments of GreenLife
⢠Improve our products
and services
⢠Promote GreenLife
65
66. Design an app
ďTrend of using smart phones
ďDesign app for download
ďźmake reservations
ďźbook the facilities (Projector)
ďźdownload the code of coupon and use it in GreenLife,
members can have a special chat room or corner
66
67. Giving sample
ďLet others know GreenLife will be launched
soon
ďHow good our products are or our products
do match with their taste
67
69. Marketing budget- projected sales
69
ď The time period of the sales projection is one year and the figures are
presented in a monthly basis.
ď We need to have three hundred and thirty-nine thousand dollars in order to
open a cafe in our chosen destination
ď After half year of operation, we can cover our cost.
Months Expected revenue Expected cost
January 309,210 339,230
February 315,394 342,622
March 321,702 346,048
April 328,136 346,013
May 341,391 342,553
June 348,218 339,128
July 351,700 335,737
August 355,217 332,380
September 358,769 329,057
October 362,357 325,767
November 365,980 322,510
December 373,300 328,960
69
70. Marketing budget- marketing expense
ď Including fixed costs, variable costs which include the promotional expense and
food costs
ď Fixed costsď¨$96,093 per month, Variable costsď¨$7,225 per month which
includes $9,000/12 = $900 average monthly promotional fees. Here is the list
about the details of our promotional fees.
ď All food costs are $235,887 in the first month. As we have eight types of
products and thus the food costs for each type product is $982 every day.
Name of promotional programs Date Budget
Pre-promotion Mid May â June $2500
Opening ceremony 1st
June $3000
Member recruiting - $200
Product tasting event Mid Nov. $800
Printing cost - $500
Decoration fee Christmas, New Year and
Valentineâs date
$2000
Total - $9000
70
72. Program
name
Person
responsible
Date Budget Explanation Budget
1.Sales
evaluation
Accountant
and
Managers
Monthly N/A 1) Find out whether
the actual sales=the
expected sales
target
2) Adjusting the
strategies to âthe
sales revenue
Expected revenue:
Jan-June: â2% monthly
Jul-Nov: â1% per month
Dec: â2%.
Expected cost:
Jan-Mar ď¨ controlling cost:
â 1% Apr-Nov ď¨ cutting
cost by1%
Dec ď¨ controlling cost: â2%
Marketing control
72
73. Marketing control
Program
name
Person
responsible
Date Budget Explanation Budget
2.Progress
check
All Quarterl
y
N/A To evaluate how the
business goes ď meet
the objectives
i.e. break even and
customer retention
ď the price-adjustment
strategies
Expected Revenue:
1) First quarter : evaluate whether the
revenue and cost of these 3
months=monthly target.
2) Second quarter: three monthsď
revenueď¨7%, costď¨-2%
3) Third quarter: ď three months,
revenueď¨4%, costď¨-2%
Fourth quarter: three monthsď
revenueď¨3%, costď¨6%
73
74. Program
name
Person
responsible
Date Budget Explanation Budget
3.Annual
evaluation
All 31st
May
N/A To evaluate how the
business goes
ď meet the
objectives
i.e. break even and
customer retention
ď the price-
adjustment strategies
Expected revenue: $4,131,374
Expected Cost: $4,030,005
ď¨ Earn $101,369 at the
end of a year
Marketing control
74